The Securities and Exchange Commission (SEC) has accused 15 people, including 11 NVidia employees, of insider trading in NVidia shares.
The SEC alleges that the 15 purchased stock knowing that NVidia would win a lucrative Microsoft contract to produce graphics chips for Microsoft's Xbox . The defendants are said to have collectively gained $1.7 million based on that insider knowledge.
The SEC has already reached settlement with two of the 15. They include nine engineers, a human resources officer, a financial analyst and four friends and relatives. They purchased NVidia stock on March 6, prior to the Xbox announcement. Following the announcement Nvidia stock peaked and the 15 sold their shares at a profit.
The SEC is demanding that the profits are returned, and intends to charge civil penalties of up to three times the profits made.