As a maker of computer-related devices, Advanced Micro Devices, Inc. knew that hacking represented a risk to its business. But the complaint for this class action claims that it made statements to the public about security without acknowledging that its processor chips were vulnerable to threats that already existed.
The class for this action is all persons who acquired common shares of AMD between February 21, 2017 and January 11, 2018 and were damaged at the corrective revelations.
AMD make semiconductor products, including microprocessors, embedded microprocessors, chipsets, graphics, video, and multimedia products, which it sells around the world.
In its filings with the Securities and Exchange Commission (SEC) for the fourth quarter and year end of 2016, and for the first, second, and third quarters of 2017, AMD made statements about the risks to its business posed by breaches of security. In nearly the same wording each time, the company made statements such as the following:
According to the complaint, the company’s statements were misleading because, despite giving the impression that the company was very attentive to security, they did not disclose that AMD’s processor chips had a fundamental flaw that made them vulnerable to hacking.
On January 3, 2018, news outlets announced that Google’s Project Zero security team had found security vulnerabilities in processors built by Intel, AMD, and other chipmakers. One of these, Spectre, allowed hackers to obtain passwords and other sensitive data from computers.
The same day, the complaint says, a spokesperson for AMD admitted that AMD chips were vulnerable to one variant of Spectre, but claimed that there was “near zero risk” that it was vulnerable to the other.
But on January 11, AMD issued a press release that admitted that its chips were vulnerable to both variants of Spectre. The press release, as quoted in the complaint, also provided information about efforts to devise patches and/or updates to protect against the vulnerabilities. At the news, the company’s stock price fell by almost one percent.
The complaint claims that the company’s previous statements, indicating attention to security, were violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.