SANTA CLARA, Calif. -- Graphics chip supplier Nvidia Corp. today announced that 10 of its employees have been accused of insider trading violations by the U.S. government.
The workers have been placed on leave of absence after the Securities and Exchange Commission (SEC) accused 10 employees of civil violations and four of them with breaking criminal laws in the trading of Nvidia stock last year. The employees were not immediately identified by the Santa Clara company.
Nvidia said the insider trading charges were related to stock transactions conducted in March 2000 by the suspended employees. Those transactions reportedly earned the employees more $1.7 million in illegal profit because they traded stock after receiving early news that Microsoft Corp. had awarded Nvidia a key contract for chips in its Xbox video game systems, reported The Wall Street Journal today. The Journal reported that 15 employees had been accused of violating insider trading laws.
According to Nvidia, 10 employees have been formally accused of violating insider trading laws by the SEC.
The Silicon Valley company said it has been cooperating fully with investigations by the SEC and the U.S. Attorney's Office for more than a year. Nvidia said the U.S. government has indicated that no action is being considered against the company or its key employees, including directors and officers.
"Nvidia takes its obligations under the federal securities laws extremely seriously," said Jen-Hsun Huang, president and CEO of the Santa Clara chip supplier. "Since becoming a public company, we have adopted a comprehensive insider trading policy and have an active and ongoing program to educate our employees about their duties under these laws and under our Policy.
"We will not tolerate any violation of insider trading laws or of our own policies in this area," Huang added.
Nvidia has become one of the few bright spots in the recession-battered chip industry this year. Earlier this month, Nvidia reported sales surged 87% to $370.2 million in the company's fiscal third quarter, ended Oct. 28, compared to $198.2 million in the same period last year. The company's net income was $44.7 million in the just-ended period compared to $28.1 million in the quarter last year (see Nov. 8 story).