Roberto Cohen v. Nvidia Corp.

This case involves allegations of securities fraud. Defendant NVIDIA Corporation is a publicly traded semiconductor company. In the spring of 2008, it disclosed to investors information about defects in two of its products. A little over one month later, it further disclosed that it would be taking a $150-$200 million charge to cover costs arising from those product defects. As a result, NVIDIA’s share price dropped 31% and its market capitalization contracted by $3 billion. According to Plaintiffs, who had purchased NVIDIA’s stock in the preceding eight months, the company knew it would be liable for the defective products long before its 2008 disclosures. They claim that NVIDIA should have informed investors about the defects as early as November 2007. They further contend that, absent a disclosure about the product defects, NVIDIA’s intervening statements regarding its financial condition were misleading to investors, and consequently in violation of Section 10(b) of the Securities Exchange Act of 1934 and corresponding Securities Exchange Commission (“SEC”) Rule 10b-5.

The district court below dismissed Plaintiffs’ amended complaint without further leave to amend,…