New Orleans (LA) – Law firm Kahn Gauthier Swick said it has filed a securities class action lawsuit against Nvidia, claiming that Nvidia issued false statements about the failure rates of its chips, negatively impacting the financial performance of the company and, as a result, its stock. It is the second suit filed against Nvidia alleging that Nvidia violated the Securities Exchange Act – the first one was filed earlier this week by law firm Shalov Stone Bonner & Rocco.

According to Kahn Gauthier Swick, Nvidia issued a “series of materially false statements that concealed and failed to disclose” unusually high failure rates, which ended up “adversely impacting the company's near-term and foreseeable financial and operational results.”  Stockholders lost more than $3 billion in Nvidia market capitalization as a result. Like the previous suit, Nvidia warned investors too late (July 2, 2008).

There was no further information given that would shed some light on the evidence Kahn Gauthier Swick may have in its hands to support its claims. At least as far as Shalov Stone Bonner & Rocco suit is concerned, we believe that such claims be walking on thin ice.

However, if a class actions tatus is granted and the lawyers are able to prove that Nvidia in fact did conceal the true extent of the problem (which we extensively described here) and did not inform its investors in time, the company may have to shell out much more than the $196 million it reserved for repairs of notebooks affected by the failures and the compensatory damages these law firms are seeking.

Both Kahn Gauthier Swick and Shalov Stone Bonner & Rocco are currently looking for investors to join their suits.