An investor’s rights firm has filed a class action lawsuit against AMD, alleging that AMD supplied false statements in regards to its vulnerability to the Meltdown and Spectre CPU security flaws. The lawsuit aims to recover damages for AMD investors “under the federal securities laws.”
We can trace this issue back to January 3rd, the day Meltdown and Spectre’s embargo lifted. At the time, AMD issued a statement that said “To be clear, the security research team identified three variants targeting speculative execution. The threat and the response to the three variants differ by microprocessor company, and AMD is not susceptible to all three variants. Due to differences in AMD’s architecture, we believe there is a near zero risk to AMD processors at this time.”
It’s the ‘near zero risk’ part that seems to have ruffled investors, with the lawsuit alleging that AMD has published statements that were false and misleading, resulting in losses for investors.
"Defendants during the Class Period made materially false and/or misleading statements and/or failed to disclose that: (1) a fundamental security flaw in Advanced Micro's processor chips renders them susceptible to hacking; and (2) as a result, Advanced Micro's public statements were materially false and misleading at all relevant times,” reads the class action lawsuit from Rosen Law Firm. “When the true details entered the market, the lawsuit claims that investors suffered damages".
I’m no lawyer so I’m going to stay well away from the finer points on this one, but it appears as if the early consensus it was only Intel processors that would be affected has proven damaging to investor prospects. At the time, AMD’s share price shot up, of course, amid fears that Intel’s long-term prospects could be damaged by the CPU flaws, before returning to prior levels.
In a statement to Tweaktown, AMD has said "We believe these allegations are without merit. We intend to vigorously defend against these baseless claims".
Do you think investors have a case here? Was AMD not honest enough with the information it was providing or was it just working with the limited information it had at the time?