Unverified: Mojo Says Nvidia Failed to Buy Directors and Officers Insurance and Will Face Heavy Litigation
$NVDA failed to buy D&O liability insurance. This is just amateur hour for a company of this size. They are going to be buried under litigation. This just keeps getting worse.
Context
A gap in company side insurance would matter if shareholder suits over Huang's exit land on Nvidia itself, but Mojo's post is unverified and overstates what the screenshots show.
Mojo posted on November 14 that Nvidia failed to buy directors and officers liability insurance and that the company will be buried under litigation. The post includes screenshots of a Financial Times article by Lee Harris, published the same day, which is more precise than the caption. According to that article, Nvidia has up to $900 million of Side A cover for the personal assets of executives and board members, but two people familiar with the policy said it lacked company side directors and officers cover, known as Side B and Side C. Nvidia did not comment to the Times. The claim is labeled unverified.
Deep dive
Mojo posted at 9:39 AM ET on November 14 that Nvidia "failed to buy D&O liability insurance," called that amateur hour for a company of this size, and said the company will be buried under litigation. The attached screenshots are from a Financial Times article by Lee Harris, published the same day, titled "Nvidia exposed to possible lawsuits after Jensen Huang's downfall."
The Times article, as shown in the screenshots and in the published piece, does not say Nvidia bought no directors and officers insurance at all. It says Nvidia has up to $900 million of Side A coverage protecting the personal assets of its executives and board members, placed through Aon with insurers that included Beazley, AIG and Chubb, according to people familiar with the coverage. Two people familiar with the policy told the Times the program did not include Side B and Side C cover, which would protect the company's own balance sheet against damages and legal costs from the conduct of executives.
The article says lawyers and brokers told the Times it is uncommon for large public companies to skip Side B or Side C, and it cites a 2018 WTW survey in which 91 percent of public companies reported buying standalone directors and officers insurance and more than 80 percent bought Side B and Side C as well as Side A. It also reports that shareholders filed a proposed class action this week against Nvidia and Huang over statements about Huang's relationship to Alice Huang, and that Nvidia shares closed 4.3 percent lower on Thursday. The size of the Side A cover, the Times says, was first reported by Insurance Insider. Beazley, Aon and AIG declined to comment, and Nvidia and Chubb did not respond, the Times reported.
Because the insurance details rest on unnamed sources, Nvidia has not commented, and Mojo's caption is broader than the article it screenshots, this story is labeled unverified and ranked last in the November 14 deck.
What to expect next
Watch for a Nvidia comment, or for a securities filing that describes the company's insurance program, which would move the Side B and Side C gap beyond unnamed sources. The shareholder suit cited by the Times will also show whether claims are aimed at the company, at individuals, or at both, which is what Side A versus Side B and Side C would treat differently. Any later Insurance Insider or Financial Times update, or a denial from an insurer, would test the original account.