Not Unusual: What the Lawsuit Against Nvidia and Jensen Huang Says, and What It Leaves Out
As of November 10, 2026. A complaint sets out a plaintiff’s allegations, not the findings of a court. Neither Jensen Huang nor Alice Huang has been charged with any crime; China calls the espionage reports a smear, and Megaspeed denies smuggling chips.
On Monday, November 9, 2026, a retail investor named Mark Kistenmacher sued Nvidia and its chief executive, Jensen Huang, in federal court in San Jose (No. 5:26-cv-13448), on behalf of everyone who bought the company’s stock between October 9, 2025, and November 8, 2026. The day before, Huang had told his employees, in a memo, that he had been unfaithful to his wife, and Nvidia’s board had announced an independent investigation into reports that he had been the target of a foreign intelligence effort. According to the Times, the other person is Alice Huang (no relation), until recently an executive at Megaspeed, a Singapore data-center company that has bought at least $4.8 billion worth of equipment containing Nvidia chips; American officials, the paper reports, concluded that she was working for Chinese intelligence. On Monday, the stock fell 4.27 per cent, erasing about a hundred and ninety billion dollars in market value. The complaint is seventeen pages long, and it does not ask for a cent on account of the affair. It asks for damages on account of four statements made to newspapers, because American law does not require a chief executive to confess his private life to the market. What it forbids is telling half the truth about it.
A Bar in Taipei
Shortly after midnight on a night in early June, 2024, a group of technology executives stood in a bar with a view of Taipei. One of them, Huang Le, who goes by Alice, is said to have announced, “I bet you guys I can get Jensen here.” Moments later, as one of the men present recalled, the head of Nvidia walked in, wearing his black leather jacket, and drank a shot of whiskey with the group. A person close to the company has said that he had planned to stop by in any case, and that two other Nvidia executives were with him. Megaspeed, the company that Alice Huang represented, was preparing to buy two billion dollars’ worth of Nvidia technology in the year ahead.
The Times described the scene on October 9, 2025, in an article asking whether chips barred from export to China were reaching it through Megaspeed. An Nvidia spokesman answered with sentences that now appear in the complaint: that Megaspeed was wholly owned by a company outside China and had no Chinese shareholders; that inspections of its data centers had turned up no sign of diversion; and that sales teams host customers at conferences, where the chief executive, when he has a moment, may be asked to stop by.
A year later, the story changed genres. On October 29, 2026, the paper reported that American intelligence had concluded that Alice Huang was a source for Beijing, and that surveillance had revealed her close relationship with Nvidia’s C.E.O.; President Trump was said to have been briefed a year earlier and to have done nothing. The spokesman said that Huang’s interactions with Ms. Huang were “not unusual or unexpected,” meetings with customers being part of a chief executive’s job. Huang himself told Bloomberg that day that the company’s dealings with Megaspeed were “normal and not unusual” and its relations with the firm’s officials proper, and gave assurances that Nvidia had accounted for every processor it had sold to the firm. On November 6th, the paper described a memo circulating in the Administration: China’s Ministry of State Security was said to have recruited Alice Huang to gather information about Huang and to nudge him toward lobbying for chip sales to China. On November 8th, by the paper’s account, Huang acknowledged to his board that the relationship had been intimate.
The caveats belong among the facts. Neither Huang nor Alice Huang has been charged with anything. China’s foreign ministry calls the reports a smear; Nvidia’s board has said that it has no reason to believe that national security or company secrets were compromised; and American officials themselves did not at first believe that Huang knew whom he was dealing with. An intelligence finding is not a verdict, as American counterintelligence has already had occasion to learn in California. In 2003, agents there arrested Katrina Leung, for twenty years a prized F.B.I. source, along with her handler, with whom she had carried on a long affair; prosecutors saw in her a double agent for China. A judge threw out the case, citing misconduct by the prosecution, and the matter ended with three years’ probation for lying to the Bureau and filing a false tax return. (How recruitment looks from the inside, and how little counterintelligence knows for certain, is the subject of an earlier piece of mine, “The Sergeant Who Became Fatemah Zahra.”)
A Complaint Written at a Sprint
The complaint was filed by the Rosen Law Firm, which specializes in such cases. It accuses Nvidia and Huang of violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, which forbid misleading the market, and it seeks to hold Huang liable, in addition, under Section 20(a), as the person in control of the company.
The document shows its haste. It cites the closing price of November 9th and bears a filing stamp of November 9th, so that, at most, a few hours separated the closing bell on the Nasdaq from the filing. The defendant appears in it as “Defendants Huang,” in the plural. The number of injured investors is put at “hundreds or thousands,” for a company worth more than four trillion dollars whose shares sit in every S. & P. 500 index fund. The questions said to be common to the class include false filings with the Securities and Exchange Commission, though the complaint does not identify a single filing: every sentence it challenges was spoken to a journalist. And the paragraph that sums up the misleading statements leaves out the only one made by the chief executive himself, though the paragraph before it challenges that one separately.
The haste has its economics. Under the Private Securities Litigation Reform Act of 1995 (the P.S.L.R.A.), whoever files first must publish a notice. Investors then have sixty days to ask to be named lead plaintiff, and the court generally picks the one who lost the most, not the one who got there first. The firm that files first buys itself time to find such an investor, and gets to tell the story its own way. On the same day, at least four other firms announced “investigations” of their own. The first complaint in a case like this is a pleading in name only. In practice, it is a help-wanted ad; the real complaint, consolidated and many times longer, will be written a few months from now.
Silence Is Free. Half-Truths Are Not
Paragraph (b) of Rule 10b-5, the provision at issue in cases like this one, prohibits two things: an untrue statement of a material fact, and the omission of a fact without which what was said becomes misleading. It imposes no general duty to speak. In 2024, in Macquarie Infrastructure v. Moab Partners, the Supreme Court held unanimously that a pure omission, even of important information, gives investors no claim under that provision; only a half-truth does. Silence about the chief executive’s private life would not, by itself, have given them one.
Nor is a scandal enough. In 2017, the Ninth Circuit Court of Appeals, which hears appeals from San Jose, upheld the dismissal of a suit by shareholders of Hewlett-Packard after the company’s C.E.O., Mark Hurd, left amid a personal scandal. The shareholders pointed to the code of ethics that the company liked to advertise; the court found that a code expresses aspirations, not assurances of fact.
What is needed, then, is a sentence, and Nvidia supplied one. If the complaint’s allegations hold up, describing an intimate relationship with a customer’s executive as a customer meeting will turn out to be a textbook half-truth: every word defensible, the whole misleading. A precedent lies close at hand. In 2020, a federal judge in New York took up a suit by CBS shareholders after the scandal surrounding the network’s chief executive, Leslie Moonves. She dismissed nearly all of it, including statements that the news division had given to the press, and let stand a single remark, which Moonves had made himself, at an industry conference. The case ended in a settlement of $14.75 million.
The defense has three arguments, and none of them is trivial. First, “normal” and “not unusual” are characterizations, not facts, of the kind that courts often dismiss as puffery, and Huang’s own words, the defense will say, described the company’s business with Megaspeed, not his private life. Second, a chief executive’s private life is not material to the value of his company. Third, a plaintiff must plead intent, or deliberate recklessness, with a force that the statute calls a “strong inference.”
The market gave its answer to the second argument: on a day when the major indexes rose, Nvidia’s shares lost 4.27 per cent. That is evidence, not proof; the decline may have priced in the risk of losing the chief executive, not the falsity of those sentences. Still, the other party to the relationship was no bystander. She helped run a customer that had bought billions of dollars’ worth of equipment and was being examined for evading export controls; in that setting, a personal tie is a conflict of interest, not a private matter. The third argument is weakened by the fact that Huang knew about his own relationship and spoke for himself, and a chief executive’s knowledge, as Robert Bartlett, a professor at Stanford Law School, has pointed out, is imputed to his company. Wired has also reported that, soon after the October, 2025, article, Nvidia’s communications staff was told to copy a crisis-P.R. firm, known for handling sex scandals, on press inquiries about the chief executive. The magazine cautions that it could not establish why the firm had been hired, and Nvidia did not answer its questions; the complaint does not mention the report. The first argument remains the strongest, which is why the spokesman’s sentence may prove more dangerous than the chief executive’s: it spoke directly of Huang’s interactions with Ms. Huang.
One thing the complaint does not have to prove is that Huang knew whom Alice Huang was working for. Some officials doubt that he could have failed to know. History is kinder to the deceived. Bernard Boursicot, an accountant at the French Embassy in Peking, believed for nearly twenty years that Shi Pei Pu, the Peking Opera singer to whom he passed documents, was a woman; a Paris court convicted them both, in 1986. Anyone who asks how a man could possibly not have known underestimates how hard a man will work at not knowing.
Thirteen Months or Seven Trading Days
The complaint’s weakness lies in the calendar. The class is meant to take in thirteen months of buyers, and the affair theory fits best the statements of October 29, 2026. Anyone who wants to claim to have bought in reliance on them must have bought between October 29th and November 6th: seven trading days, at most. For the twelve months before that, the affair theory has a single sentence from October, 2025, the one about sales teams asking the chief executive to stop by. The complaint says that this, too, was misleading, because it left out the affair. For that to be so, the relationship must already have existed, and the complaint does not say when it began (the Times wrote at the time that it was not clear even when the two had first met). On that one date depends whether the affair can carry thirteen months or only seven trading days.
The assurance about shareholders the complaint attacks with a formula that does not survive a reading: the statement that Megaspeed had no Chinese shareholders was false, it says, “because Jensen Huang had an affair with Alice Huang.” An affair does not alter a share register. That sentence may well be untrue, but for a different reason: if Megaspeed was what part of Washington takes it to be. Culper Research, a short seller, claimed in May that the company was quietly financed by Alibaba; the Financial Times reported on November 9th that documents show loans from Alibaba subsidiaries; the Justice Department is investigating Megaspeed. A loan does not make a lender a shareholder, either, but it says something about whether the company was really run from outside China. For those sentences, the affair will not be enough. The plaintiffs will need the chips.
Culper, which the complaint does not mention, is a problem for both sides. The fund, named for George Washington’s spy ring, announced on May 13, 2026, that it was betting against Nvidia’s stock, and called the chief executive’s relationship with Alice Huang “uncomfortably close.” The stock rose that day by more than two per cent. The defense will say that the market has known since May. But the Ninth Circuit has twice held, in cases involving BofI and Nektar, that the market takes with a grain of salt the reports of short sellers, who profit when a stock falls and vouch for nothing they write. Those disputes were about investors’ losses, not a company’s defense, but the logic carries over: Nvidia would have to argue that investors should have believed a speculator whom its own spokesman was contradicting.
Then there is the arithmetic of loss. In the week before the confession, Nvidia’s shares lost 8.8 per cent in a general sell-off of A.I. stocks, so the experts will have to separate the decline caused by the truth from the decline caused by the market. For investors who have held on to their shares, the statute also caps damages at the difference between the purchase price and the average price in the ninety days after the disclosure: if the stock rebounds, the loss shrinks or vanishes. Nvidia is scheduled to report its quarterly results on November 17th.
The statistics are sobering. According to Cornerstone Research, of the suits of this kind filed between 1997 and 2024, forty-three per cent were dismissed, forty-six per cent settled, and twenty-one, or fewer than half of one per cent, went to trial. The median settlement in 2025 was $17.3 million. Nvidia knows the road. A suit accusing it of concealing how many of its graphics cards were being bought by cryptocurrency miners was filed in the same court in December, 2018; it was dismissed, revived on appeal, and carried to the Supreme Court, which, in December, 2024, declined to decide it after all, and a class was certified only on March 25, 2026. That took more than seven years, and discovery still lay ahead.
The Princess’s Headdress
In the seventh century, the Chinese monk Xuanzang wrote down a legend of Khotan, an oasis kingdom on the Silk Road. The ruler of the country to the east had forbidden the export of mulberry seeds and silkworm eggs, and ordered the frontier guarded. So the king of Khotan asked for the hand of a Chinese princess, and his envoy warned her that in her new country she would have nothing from which to make her robes. The princess hid the eggs and the seeds in the lining of her headdress. At the border, everything was searched; the guard did not dare touch the princess’s headdress. On his expedition of 1900 and 1901, the archeologist Aurel Stein found, in the sands of the Taklamakan Desert, a painted wooden panel depicting the scene. It is now in the British Museum: a maidservant points a finger at her mistress’s head.
This is how China’s most closely guarded technologies got out. Silk, in the legend, left with a bride. The Chinese method of making porcelain reached Europe in letters of 1712 and 1722 from a Jesuit, François Xavier d’Entrecolles, who learned it from the potters of Jingdezhen whom he had converted (Saxony, at Meissen, had only just worked out a recipe of its own). Tea was carried off between 1848 and 1851 by Robert Fortune, a Scottish botanist in the pay of the East India Company, who shaved his head, put on Chinese dress, and shipped to India more than twenty thousand seedlings, along with Chinese tea masters to tend them. No customs post stopped any of it. Each secret left through a person: by marriage, by confession, by employment contract.
The empire defended itself in its own way: it rationed contact. Under the Canton System, which lasted from 1757 to 1842, trade with the West passed through a single port and through licensed merchants, who stood surety with their fortunes for every foreign ship and for the conduct of the foreigners aboard; a modern regulator would call it a know-your-customer rule. Women could not be brought into the trading posts, Chinese subjects were forbidden to teach foreigners the language, and after the Flint affair, of 1759, the man who had helped the Englishman James Flint write a petition to the emperor was publicly executed. The court understood that technology leaks through acquaintance, and so it rationed acquaintance. Fortune came for the tea six years after the system fell.
American export control took another road: it describes the chip, its performance, and the country of destination, and leaves the watching of people to the seller. The Commerce Department’s guidance tells an exporter to know its customer, to ask questions when red flags appear, and not to blind itself; absent such flags, though, the exporter need not go behind what the customer has told it. The list of red flags runs to nearly thirty items, from the customer who pays cash to the equipment that nobody wants installed. It has no entry for a customer’s executive who can summon her supplier’s C.E.O. to a bar after midnight. Paper and goods, meanwhile, travel separately, and legally so: Nvidia itself reports that in fiscal 2025 Singapore accounted for eighteen per cent of its revenue by billing address and for less than two per cent by shipments, a gap that it attributes to centralized invoicing.
Chinese tradition has a name for this. The thirty-first of the Thirty-Six Stratagems advises: when the army is strong, attack its general; when the general is wise, attack his emotions. It is called the stratagem of the beautiful woman, which says more about the era than about the method, since the method concerns the general. Nvidia is built around one man: some sixty executives report directly to Huang, and, according to the Wall Street Journal, there is no succession plan. An organization in which everything depends on one person has a single point of failure, and it does not take an intelligence service to find it.
The State as Partner
The strangest thing about this story is not that a chief executive had an affair but who knew about it and kept quiet. The President was briefed in October, 2025; he did nothing, and on November 8th he said that he had no regrets and that he would be taking Huang along on his trip to China. A day later, the Times described an e-mail from August, 2025, in which Nvidia’s general counsel approached the Commerce Department agents who were investigating Megaspeed, invoking the permission of a senior official at the department. The agents declined to meet; the official told them to proceed by the book; and the investigation was then paused at the request of the Justice Department, which took over the case. Nvidia says that it contacts officials in order to answer their questions; the department says that it acted by the book. The fact remains that the Commerce Department has not added a single company to its blacklist in more than a year. The first complaint mentions none of this. The next one will probably begin with it.
In 2025, the same Administration twice agreed to let Nvidia sell chips to China in exchange for a double-digit levy for the Treasury: fifteen per cent of the revenue from the H20 chip and, for the more powerful H200, a tariff of twenty-five per cent, imposed in January, 2026, on such chips entering the United States. Such a policy is coherent only if it is read as price-setting. A state that takes a percentage of the trade it is supposed to be policing ceases to be merely a guard. It becomes a partner, and partners are reluctant to count each other’s crates. (That export control now operates as discretion without procedure is the subject of an earlier piece of mine, “Anthropic disables Claude Fable, a Mythos-class AI model.”)
Canton knew this, too. Opium was banned in China, and the officials charged with enforcing the ban collected fees from the smugglers. In 1836, a court official named Xu Naiji proposed to the emperor that what could not be stopped should be not prohibited but taxed. The emperor chose prohibition and, three years later, sent Commissioner Lin Zexu to Canton. The analogy is not exact: there the ban was on imports, here on exports. But the mechanism is the same. A prohibition whose guardian collects a fee stops being a prohibition and becomes a price list. In 2025, Washington took Xu Naiji’s road.
Which brings us back to those seventeen careless pages. Matt Levine, the Bloomberg columnist, has been saying for years that in America “everything is securities fraud”: any misfortune that befalls a company can be redescribed as a lie told to the market. Usually it is a joke. Here it is a function. The Justice Department is investigating Megaspeed, Congress is asking for a meeting behind closed doors, and the board is checking whether secrets leaked. Whether Nvidia told its investors the truth is a question that, for now, only the plaintiffs’ lawyer is asking; the S.E.C., in Bartlett’s view, is unlikely to pursue an ally of the President. If the complaint survives a motion to dismiss, the court will open discovery, and the plaintiffs will demand the e-mails about Megaspeed, the reports of the visits to its data centers, and the results of the processor count. The board has promised to examine all available information; the plaintiffs’ lawyers will be after the unavailable kind.
The affair is the hook. The real case lies in the sentences saying that no evidence of diversion was found, and today no one knows whether they are true: Nvidia maintains that the allegations were checked and dismissed, and the Justice Department is still looking. (How corporations teach themselves not to know what is inconvenient is the subject of an earlier piece of mine, “How Meta Learned Not to Know: Meta (Facebook) $1.4 Trillion Lawsuit.”)
For a Shareholder Abroad
An American class action of this kind runs on the opposite principle from the collective actions familiar in much of Europe, Poland included: you belong to the class by virtue of having bought, unless you opt out. Anyone who bought Nvidia shares on the Nasdaq between October 9, 2025, and November 8, 2026, even through a brokerage in Warsaw, and lost money when the story broke is a member of the proposed class, whose final shape the court has yet to decide, and need not sign anything today or pay anyone. The press releases in which American law firms announce a deadline of January 8, 2027, are recruiting candidates for lead plaintiff; an investor who misses it loses no right to share in an eventual settlement, since the deadline for filing claims will come only with the notice of one. It is worth keeping the trade confirmations. The holder of a contract for difference will most likely be left out, having bought not a share of Nvidia but a wager with a broker.
European law would have come at this story from the other side. If Nvidia were listed in the European Union, the Market Abuse Regulation (Article 17) would require it to disclose inside information as soon as possible, and, since June 5, 2026, would not allow it to delay disclosing information that contradicts its own most recent public statement on the same subject. In the United States, silence alone gives an investor no claim until the company speaks; in the European Union, a listed company is obliged to speak. But that obligation is policed by the regulator, and compensation is something an investor must pursue alone: in Poland, for instance, a group action requires each claimant to opt in. Each system fails in its own way. The American one lets a company keep silent and makes it pay for half-truths. The European one makes a company talk, and the fine for silence goes to the state, not to the investor.
In Sum
This much is certain: on November 9, 2026, a complaint was filed that accuses Nvidia and its chief executive of misleading the market in four statements; Huang has admitted to infidelity, the board is investigating, and the stock fell 4.27 per cent in a day. It is probable that the statements of October 29th will hold up longest; that the first complaint will be replaced by another, more ample one; and that the case will last for years before it ends in a settlement or a dismissal. Whether the class will cover thirteen months or seven trading days turns on a date that the complaint does not give, the day the affair began, or else on the chips. What matters most remains uncertain: whether Alice Huang worked for Chinese intelligence, whether Huang knew anything about it, and whether the chips that Megaspeed bought ended up in China. Securities law knows nothing of sin. It knows only the untrue sentence, and that is why it, and not export control, was the first to take Nvidia to court. The guard in the legend searched everything except what he did not dare to touch. Since then, only the merchandise has changed.
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Robert Nogacki is a Polish attorney at law (radca prawny), the founder and managing partner of Kancelaria Prawna Skarbiec (Skarbiec Law Firm), which has operated continuously since 2006.
The law is equal for everyone, but the parties rarely are: on one side stands an organization with time, money, and lawyers, on the other a person with one business, one nest egg, and one life.
Clients rarely come to him with a legal problem. They come with a problem that also has a legal side: an audit that began with a single invoice, money entrusted to someone who has disappeared, a company that has to be passed on before it is too late. Most such matters are decided long before the first letter is written, in decisions made without asking and in deadlines nobody remembered. So he begins by asking how the client got here, not what the client should have done.
He advises entrepreneurs and families from more than a dozen countries, including those whose accounts the tax office has just seized and who do not know what to do tomorrow morning. He defends them in tax audits, customs and fiscal inspections, disputes with the tax authorities, and criminal tax proceedings. He represents victims of investment fraud and Ponzi schemes. He helps families set up family foundations and plan succession, so that a life’s work outlasts a single generation.
Not every case can be won. Every case can be run so that the client knows where they stand. Since 2006 he has represented the victims in the WGI case (Warszawska Grupa Inwestycyjna, the Warsaw Investment Group), one of the longest criminal cases in the history of the Polish financial market, because some things must not be left half finished, even when they take two decades. In the case of the collapsed cryptocurrency exchange Zonda (Zondacrypto, operated by BB Trade Estonia OÜ), he represents several hundred victims in the criminal investigation conducted by Poland’s National Prosecutor’s Office and in the Estonian bankruptcy proceedings.
Kancelaria Prawna Skarbiec is listed in the rankings of Poland’s largest tax advisory firms published by Dziennik Gazeta Prawna and Rzeczpospolita, and it is a four-time recipient (2015 to 2018) of the European Medal awarded by the Business Centre Club and the European Economic and Social Committee. Robert Nogacki publishes regularly, in the press and on the firm’s website, for people who have a problem rather than a law degree, because a legal opinion the client cannot understand protects only the lawyer.
He believes that the best legal advice is the kind that means the client never has to appear in court.
