Nvidia CEO Jensen Huang hit with lawsuit over affair with alleged China spy

Nvidia and its embattled CEO Jensen Huang have been hit with a shareholder lawsuit alleging that the company misled investors by failing to reveal the full extent and risks associated with the tech boss’s affair.

The company’s share price has cratered after reports emerged that U.S. intelligence agencies had been probing a relationship between the CEO and Alice Huang, a Chinese citizen of no relation. Huang admitted to affair and the company itself has now opened an investigation into her potential ties to the Chinese state.

And in a class action lawsuit filed on Monday in federal court in ​California, Huang and Nvidia have been accused of causing shareholders “significant losses and damages.”

By failing to disclose the affair, shareholders led by Mark Kistenmacher argue the company artificially inflated its share price in potential violation of federal securities law.

The filing also notes that the potential national security implications present “a material risk to the Company’s reputation and business prospects.”

Nvidia, currently the world’s second largest company with a market capitalization of over $4.3 trillion as of Tuesday pre-market, has seen 14 percent wiped off its share price over the past few days as the scandal came to a head.

“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” the lawsuit reads.

President Donald Trump was asked about the situation on Monday, telling reporters he had spoken with Huang and that the CEO “had absolutely no idea that the person in question was a spy.” Trump went on to say that the Federal Bureau of Investigation was involved in the probe.

This is a developing story; more to follow.