Nvidia legal battle vs disgruntled investors takes odd turn

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The shareholders suing computer chip giant Nvidia on charges of allegedly misreporting the size of its block reward mining-related revenue have complained the company is trying to block crucial evidence from a former employee that bolsters their claim.

The Santa Clara, California-based firm makes graphic processing units (GPUs) used for games, AI, digital currency mining, and data-center computing.

As first reported by online news publication CoinDesk, attorneys representing the group of shareholders claim that Nvidia’s lawyers convinced the former employee, dubbed “FE 5,” to “disavow” several critical statements. They are now pushing for the whole testimony to be thrown out of the court.

“FE 5” is reported by Coindesk to be the former head of Nvidia’s consumer marketing in South Asia, having held the role for five years until 2019.

The disgruntled investors first brought charges against Nvidia in December 2018. Their lawsuit alleges that Nvidia downplayed the number of graphic cards it was selling to block reward mining operations to buoy the share price. It further asserts that Nvidia knew it could not sustain the sales spike over the long term for the uncertain nature of the block reward mining industry.

Of course, Nvidia’s management refuted the accusations, claiming the plaintiffs “cherry-picked” company statements and critical data from sales of GeForce GPUs cards to support their charges.

The whistleblower employee “FE 5” later provided evidence for an amended complaint in mid-May that seemed to show Nvidia’s executive team, including its founder and CEO Jensen Huang, was routinely updated regarding figures of the GeForce GPUs purchased by digital currency miners.

In June, Nvidia’s legal counsel informed the plaintiffs they had identified and contacted “FE 5,” who responded saying he/she had spoken under the misunderstanding that it was for research into the semiconductor sector and not as evidence for a trial against their former employer.

The shareholder’s attorneys said its’ Lead Counsel had clearly identified themselves from the beginning and contend “FE 5” is now giving these purportedly false statements out of worry Nvidia may retaliate against her/him. Their filing goes on to say that “FE 5” later contacted them expressing concern that they could be identified by NVIDIA and significant backlash from the company, which negatively affects their “future prospects”.

The shareholder’s attorneys call on the court to strike down Nvidia’s motion to dismiss evidence because federal courts have rejected attempts by defendants to discredit the testimony from former employees in the past.