Intel faces more class action suits over share price hits caused by Spectre and Meltdown flaws
Intel's legal woes surrounding the Meltdown and Spectre vulnerabilities in its processors are increasing, with more legal firms filing class action suits against the chip company, this time on the behalf of its shareholders over the revelation of the flaws and the effect on the value of the company's shares.
Four law firms have made announcements of class action lawsuits for shareholders in the last two days, starting with the Rosen Law Firm and Pomerantz on Wednesday. Separate announcements were made by Kessler Topaz Meltzer and Check as well as Block & Leviton on Thursday.
The complaints have a similar set of issues with Intel's management of the Meltdown and Spectre fiasco, alleging that Intel made false or misleading statement, or filed to disclose, a fundamental design flaw in its processors that make them vulnerable to hacking. The false and misleading statements accusation also includes the updates required to fix the vulnerabilities, which can potentially make the processors run significantly more slowly.
The law firms reason that Intel's public statements were materially false and misleading at all relevant times, and when the details of the vulnerabilities surfaced, the lawsuit claims Intel's investors suffered damages.
According to Pomerantz, the initial design flaw reporting on January 2, along with Intel's confirmation the following day, caused Intel's share price to drop $1.59 per share on January 3, or over 3.5 percent, from its previous closing price.
On January 4, the reports that Intel CEO Brian Krzanich allegedly sold shares worth millions of dollars after Intel was informed of the vulnerabilities, but crucially before they were publicly disclosed, are said to have damaged the stock price further. It is insinuated these reports helped press the share price down another $0.83 to $44.43 at closing on January 4.
All four law firms intend the class action suits to be on behalf of purchasers of the Company's securities between July 27, 2017, and January 4, 2018. All are also said to be seeking a shareholder to be identified as a Lead Plaintiff for the class, with a deadline to request to the court for the appointment of the position by March 12.
The new suits are the latest in a long line of legal issues Intel faces following the revelation of the vulnerabilities. Other class actions filed this week have been consumer-oriented, claiming customers had been overcharged or saw a loss of the purchase price for the processor, and that consumers face either buying a new computer or processor without the flaw, or continue using a computer with massive security vulnerabilities or one with significant performance degradation.