Sueball smacks AMD over processor chip security flaw silence
CEO, CFO in crosshairs after shareholder 'losses'
AMD stands accused of "artificially inflating" its stock price by not making public a CPU design flaw the tech world now knows as Spectre, according to a class-action lawsuit brought on behalf of investors.
Yesterday's filing by shareholder Doyun Kim in the northern district of California court stated: "As a result of defendants' wrongful acts and omissions, and the precipitous decline in the market value of the company's common shares, plaintiff and other class members have suffered significant losses and damages."
The listed defendants are AMD CEO Lisa Su and CFO Devinder Kumar.
This comes in the wake of similar legal bombs thrown at rival Intel – also class-action suits brought by disgruntled stockholders. Both filings leveled near identical accusations at the companies, their bosses and chief beanies.
Intel has a quartet of lawsuits vying for the attention of its lawyers, and AMD is – for the moment – saddled with just the one.
This latest legal challenge covers the period between 21 February, 2017, the day AMD filed its 2016 end-of-year financial statement, and 11 January this year, when the company made an official response to the reports of the flaws.
This is a wider period than the Intel case, which begins its lawsuit with shares bought from 27 July 2017, roughly the time that the third Meltdown flaw was discovered, and 4 January 2018, when the full extent of the issues became public.
As evidence of hiding the knowledge of the chip vulnerabilities, the complaint highlighted AMD's end-of-2016 statement, as well as its Q1, Q2 and Q3 filings. These all contain the same paragraph warning about the general risk of hackers and potential consequences of attacks, the place where investors would expect to read about fundamental issues with the company's chips, but did not. Signed and declared accurate by Su and Kumar, these reports would indicate that all was well in terms of security at AMD.
On January 2, The Register revealed the Spectre and Meltdown vulnerabilities. AMD responded to the news the next day, saying its processors were definitely at risk from one variant of Spectre, but there was "near zero risk" of them being affected by the second variant, according to an AMD spokesperson referenced in the complaint.
While not explicitly mentioned in the filing, the Google Project Zero blog stated it informed AMD about Spectre on 1 June 2017. It is not clear why the class period begins earlier than this date and makes reference to the end-of-2016 and 2017 Q1 reports, as AMD would not have been aware of the flaw at those points in time.
There's also the little annoying fact that AMD's share price went up after details of Meltdown and Spectre emerged in early January, and at $12.12 today, the stock price is more than its June 1 value of $10.93. It peaked at $14.76 in July.
Kim bought 21,000 shares in AMD at $12.24 on January 8, 2018, presumably thinking it was a safe bet. He now appears to be upset they declined in value by 0.99 per cent to $12.02 on January 12, the day after the chip design clarified its position on Meltdown and Spectre.
Responding to the class-action lawsuit, an AMD PR rep told The Reg: "We believe these allegations are without merit. We intend to vigorously defend against these baseless claims." ®
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