nVidia investigated by SEC!
- Thread starter martrox
- Start date
From what I've heard I don't think it will amount to much though. It sounds as though the SEC are just scrutinising accounting practices in a little more detail after ENRON's collapse.
You can't expect a company that bucks the curve and has a track record like theirs to not get investigated. Remember that nvidia employee who was prosecuted for insider trading? I'm sure there are folks trying to make a buck in there... but I doubt nvidia will have crossed the line.
Exactly. And it was when nVidia forwarded some informations to SEC in regard to this investigation, that SEC came across some questions.
From the nVidia Press Release:
NVidia claimed yesterday that the figures in question wasn't really anything big. (I don't recall the exact phrase though). This sound as an account abnormality to me, nothing more.
Regards, LeStoffer
Doomtrooper
Veteran
There is more to this story unfolding, I was checking stock prices when I came across this Dated Feb.20.02...
Doomtrooper
Veteran
I'm no legal expert but doesn't a class action suit have to filed by majority shareholders... ??
Doomtrooper
Veteran
Obviously somebody thinks something fishy is going on to file a class action suit.
The lawyers are attempting to cash in on the entire Enron fiasco.
A whole lot of laws were put in place in the late 80s/early 90s to make shareholder lawsuits easier to discard after law firms filed several hundred (thousand) shareholder lawsuits on questionable evidence.
Since Enron's collapse, those law firms have been trying to get as many shareholder lawsuits into the system as possible, under the pretense that if Enron was lying about finances, then other companies could be, as well. Milberg-Weiss has filed at least a dozen class action lawsuits since Enron's accounting fiasco became public knowledge.
These claims are best described by the wonderful adage, "98% of lawyers give the other 2% a bad name."
A whole lot of laws were put in place in the late 80s/early 90s to make shareholder lawsuits easier to discard after law firms filed several hundred (thousand) shareholder lawsuits on questionable evidence.
Since Enron's collapse, those law firms have been trying to get as many shareholder lawsuits into the system as possible, under the pretense that if Enron was lying about finances, then other companies could be, as well. Milberg-Weiss has filed at least a dozen class action lawsuits since Enron's accounting fiasco became public knowledge.
These claims are best described by the wonderful adage, "98% of lawyers give the other 2% a bad name."
Doomtrooper
Veteran
Why ?? Does that affect this thread ? :rollseyes:
On 2002-02-24 19:09, Galilee wrote:
Maybe to show that these things happen all the time
Well Nvidia could be in a pile of sh it. If they have in the past generated false earnings these lawsuits could have a devastating effect. Consider a company takes a large short position against nvidia before earnings because they thought that they would miss their numbers and the stock would drop in value. But if nvidia pulled a fast one via channel stuffing or other means then posted positive numbers the short sellers could have been put out millions because the stock price increased as opposed to decreasing. I would think that these people were very interested in being paid back their loses. Also nvidia is selling a billion dollars worth of stock @ or around 50$ a share so this is another good reason why nvidia would like to have a good track record. There is good reason for suspecting nvidia of wrong doing here. ATi lawsuits are not founded nearly the same, in fact they may very well be unjustified. ATi was sailing along until nvidia launched the GF1 and made numerous design wins in a rather short period of time. e.g. In the run of one quarter. Literally eating ATi's lunch so ATi's earning short fall was not a matter of deceiving share holders but was a matter of crushing competition from nvidia.
Sabastian
Doomtrooper:
That shows that BS lawsuits happen all the time.
Sebastian:
Of course suits against Nvidia have more merit then ones against ATi. After all, Nvidia is the dark all-consuming cloud of hellfire while ATi is the pillar of good and kindness.
This is what I posted in 3dgpu:
"The funny (or rather, sad) thing is, if you read the complain you'll see that it very little connection to the SEC inquiry:
One of the allegations:
"In order to overstate revenues and assets in its 4Q 00, 1Q 01, 2Q 01 and 3Q 01, as alleged in the complaint, NVIDIA violated Generally Accepted Accounting Principles and SEC rules by engaging in an illegal accounting scheme. This scheme had the effect of dramatically overstating revenues and assets."
SEC:
"Based on its review of these materials, the SEC informed Nvidia in January of specific questions relating to the recording of reserves in the fourth quarter of fiscal 2000 and the first quarter of fiscal 2001. The agency also raised the possibility that certain product costs of up to $3.6 million should have been recorded in the first quarter of fiscal 2001, but were recorded in the second and third quarters in that same year."
Obviously the law firms have a standard form that they don't even adjust to the circumstances of the particular case."
That shows that BS lawsuits happen all the time.
Sebastian:
Of course suits against Nvidia have more merit then ones against ATi. After all, Nvidia is the dark all-consuming cloud of hellfire while ATi is the pillar of good and kindness.
This is what I posted in 3dgpu:
"The funny (or rather, sad) thing is, if you read the complain you'll see that it very little connection to the SEC inquiry:
One of the allegations:
"In order to overstate revenues and assets in its 4Q 00, 1Q 01, 2Q 01 and 3Q 01, as alleged in the complaint, NVIDIA violated Generally Accepted Accounting Principles and SEC rules by engaging in an illegal accounting scheme. This scheme had the effect of dramatically overstating revenues and assets."
SEC:
"Based on its review of these materials, the SEC informed Nvidia in January of specific questions relating to the recording of reserves in the fourth quarter of fiscal 2000 and the first quarter of fiscal 2001. The agency also raised the possibility that certain product costs of up to $3.6 million should have been recorded in the first quarter of fiscal 2001, but were recorded in the second and third quarters in that same year."
Obviously the law firms have a standard form that they don't even adjust to the circumstances of the particular case."
You know what's funny Doomtrooper, I did a background check on Millberg Weiss to confirm the names of other companies they had filed class action lawsuits against....and look what I found
http://www.milberg.com/ati/
Milberg Weiss Announces Class Action Suit
Against ATI Technologies, Inc.
New York - - May 24, 2001 - - The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on May 23, 2001, on behalf of purchasers of the securities of ATI Technologies, Inc. ("ATI" or the "Company") (NASDAQ: ATYT) between January 13, 2000 and May 24, 2000, inclusive. A copy of the complaint filed in this action is available from the Court.
The action, numbered 01-CV-2541, is pending in the United States District Court, Eastern District of Pennsylvania, located at 601 Market Street, Philadelphia, PA 19106, against defendants ATI, Kwok Yuen Ho, James Chwartacky and James Fleck. The Honorable Stewart Dalzell is the Judge presiding over the case.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between January 13, 2000 and May 24, 2000, thereby artificially inflating the price of ATI securities.
The Complaint alleges that throughout the Class Period, defendants repeatedly issued press releases highlighting the Company's strong revenue growth and industry-high gross margins. These statements were materially false and misleading because they failed to disclose that (i) the Company was experiencing declining demand for its graphics chipset products and was decreasing its prices in order to stimulate demand; (ii) two of the Company's primary competitors, S3 Inc. and Neomagic, were flooding the market with cheaper and better products, which was rendering ATI's product offerings increasingly unattractive; (iii) the Company was failing to writedown a material portion of its inventory, which was impaired given the current conditions in the graphics chipset market. Accordingly, the Company's reported operating results were materially overstated; and (iv) that defendants' opinions, estimates and projections concerning the Company, its business and earnings were knowingly lacking in a reasonable basis at all times. Finally, on May 24, 2000, defendants issued a press release which shocked investors by announcing that ATI would be reporting lower than expected revenues. Defendants also disclosed that ATI’s gross margins had declined to 21% and that the Company would be writing down $56 million worth of inventory. In response to this announcement, the price of ATI common stock declined precipitously – falling from $16.75 per share, on May 23, 2000, to $8.4375 per share on May 25, 2000.
If you bought the securities of ATI between January 13, 2000 and May 24, 2000, you may, no later than July 23, 2001, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad Hynes & Lerach LLP, or other counsel of your choice, to serve as your counsel in this action.
If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:
Steven G. Schulman or Samuel H. Rudman
One Pennsylvania Plaza, 49th fl.
New York, NY, 10119-0165
Phone number: (800) 320-5081
Email: ATIcase@milbergNY.com
Website: http://www.milberg.com
Goto to Millberg's main site http://www.milberg.com and read the number of class action lawsuites they have filed, it is almost ridiculous. They have even filed a class action lawsuit against K-mart for failing to cover prescription contraceptives. ("The complaint, filed in the Northern District of Georgia by Milberg Weiss, Heller Horowitz & Feit, P.C., the Law Offices of George Stein and the National Women’s Law Center, alleges that it is an unlawful employment practice to exclude prescription contraceptive coverage while including coverage for other prescription drugs. ")
:rollseyes:
<font size=-1>[ This Message was edited by: Exposed on 2002-02-25 04:08 ]</font>
("The complaint, filed in the Northern District of Georgia by Milberg Weiss, Heller Horowitz & Feit, P.C., the Law Offices of George Stein and the National Women’s Law Center, alleges that it is an unlawful employment practice to exclude prescription contraceptive coverage while including coverage for other prescription drugs. "):rollseyes:
<font size=-1>[ This Message was edited by: Exposed on 2002-02-25 04:08 ]</font>
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