nVidia investigated by SEC!

[John Reynolds]

Well, "Obviously somebody thinks something fishy is going on to file a class action suit".

Sorry, couldn't resist.

 

[Doomtrooper]

On 2002-02-25 04:02, Exposed wrote:

Obviously somebody thinks something fishy is going on to file a class action suit.

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

When did this turn into a ATI debate, give it a rest <bleep>. :rollseyes:

 

[Althornin]

You know, all you damn guys assuming DoomTrooper is here just to bash nVidia (in this thread) and who keep bringing up ATI need to get a damn life. WTF?
Your comments have no place here, except to show what shitty people you are. I know, you will say "your comment is no better". Its the standard lamer response to soemone pointing out the fact that you were ASSUMING something about someone, and being a dick about it, while hijacking a thread FOR NO GOOD DAMN REASON.

Please folks, can we just grow up a little and stop labeling people so that when they post, we assign some specific motive to them without taking in the context of things? This is a thread about nVidia's lawsuits. You want to make one about ATI's? fine...you even want to let this thread drift to "video companies lawsuits"...fine!
But to use this forum in the way that you did pisses me off.

 

[dksuiko]

Althornin...

Are you trying to rant? There's a real obvious difference between one who actually rants and one who tries to rant. I've been getting the impression that you've been trying to rant - but failing. Though I can't put my finger on exactly why I feel that way...

-dksuiko

 

[DemoCoder]

I think the point of bringing ATI into the picture was to show that these lawsuits are very common. Some people were trying to argue that these lawsuits were legitimate and serious simply because they were "class action lawsuits" as if, that means that they are rare and aren't frivilous. Showing how the law firm sued other companies in the same industry for equally silly reasons is a good reason for citing them.



These are the same fools who get ahold of a SEC quarterly report and see all of this negative sounding language in the Risk section, e.g. we could lose all our customers and self-destruct at any time, and come to the message boards proclaiming that the company is in big trouble, because they haven't did their homework and are totally new to the world of wall street business.

I remember a time when people on the news.3dfx.com server where claiming NVidia stole (plagarized) 3dfx's 10-Q report because several paragraphs were identical, not realizing that these reports (and most legal documents) are simple modifications to existing boilerplate.

The whole Enron fiasco is overstated IMHO. I've been in 3 companies in the last 4 years that went bankrupt, and most of the people I know in Silicon Valley were in a couple of bust .coms. Moreover, these .coms lied to investors, board of directors, etc big time, and engaged in revenue tricks that make Enron look like angels.


For example, at a previous company I was at, a bunch of people from Softbank (a VC investor) were coming in to check out the office. The company only had 6 employees at the time, but a temp agency was hired and an additional 15 people were brought in. These people were taught to play-act, take customer "orders", and generally sit at their computer looking busy, all to put on a good show for the investors.

This same company threw a democratic fundraising party at the CEO's house, and hosted Clinton, trying to get Clinton and the democrats to push down some privacy laws that were going to hurt their spam/junkmail/advertising/datacollection business. (Clinton got boozed up and tried his best to give a speech around the "New Economy" fumbling up internet concepts and generally looking like an idiot)


During the internet bubble, everyone lost their rationality. That made it much easier to trick even seasoned investors into coming onboard companies that were total BS. It made it easy to trick employees into taking crap pay and working hours in exchange for worthless stock. Hopefully, with the Enron fiasco, people will see that this behavior is endemic, and demand much more detailed accounting practices.

And, hopefully people will totally downplay the crap that comes out of the mouths of CEOs and Wall Street Analysts who hype stocks up.

All that matters is the bottom line. Let's make sure that is audited properly. Ignore CEO and analyst pep talks about the stock and judge for yourself.




<font size=-1>[ This Message was edited by: DemoCoder on 2002-02-25 10:51 ]</font>

 

[Althornin]

"I think the point of bringing ATI into the picture was to show that these lawsuits are very common"

Then why were all the ATI comments targetted at DT? Thats my beef with it...

and as for dksuiko, whatever, dude. I dont really care, as your opinion=meaningless to me.

<font size=-1>[ This Message was edited by: Althornin on 2002-02-25 16:44 ]</font>

 

[Sabastian]

On 2002-02-24 22:36, Geeforcer wrote:
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."

Hmm not sure what you are trying to say Geeforcer, the law firms are conducting lawsuits out of the scope of the investigation? How so let’s take a slight closer look at these statements. They really aren’t different.

SEC="the fourth quarter of fiscal 2000 and the first quarter of fiscal 2001."

Lawsuit allegations time period= "In order to overstate revenues and assets in its 4Q 00, 1Q 01"

This is the same time period in question.

SEC statement="product costs of up to $3.6 million should have been recorded in the first quarter of fiscal 2001[/b], but were recorded in the second and third quarters in that same year"

Lawsuit allegations time period="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"

In fact it seems the SEC seems to be concerned with a larger range then do these allegations. I understand that they are written differently but possibly you would consider taking a route in analysis comprehension so that this sort of thing does not evade your attention yet an additional instance in the future.

Not to bring this discussion to any sort of a quarrel, it is just that I don't fully seize just what it is that you are saying here. The time periods in question are precisely alike. Your argument here seems fairly ineffectual.


Sabastian