FOR IMMEDIATE RELEASE 2000-118 August 29, 2000 COMMISSION FILES INSIDER TRADING ACTION AGAINST MANU B. SHRIVASTAVA The Securities and Exchange Commission ("SEC"), Robert S. Mueller, III, United States Attorney for the Northern District of California, and Bruce J. Gebhardt, Special Agent in Charge of the Federal Bureau of Investigation in San Francisco, today announced the filing of separate civil and criminal insider trading actions against Manu B. Shrivastava, a former engineer at nVIDIA Corporation. Both actions allege that Shrivastava illegally traded on inside information about nVIDIA, earning $446,724. The U.S. Attorney also seeks civil forfeiture of Shrivastava's insider trading profits, and has executed a seizure warrant on a San Francisco brokerage account. Both actions allege that in March 2000, while still employed by nVIDIA, Shrivastava engaged in illegal insider trading when he purchased $30,825 worth of nVIDIA call options based on his advance knowledge that the Company had just won a lucrative contract with Microsoft Corporation. Within days, the price of nVIDIA stock soared as the market learned of the contract, and Shrivastava sold his options, realizing unlawful profits of $446,724. Shrivastava, age 31, lives in San Jose, California. nVIDIA is based in Santa Clara, California. According to today's filings, on Sunday, March 5, 2000, nVIDIA and Microsoft entered into an agreement providing for nVIDIA to design and manufacture the 3D computer graphics and multimedia sub- system for Microsoft's new video game console, the "X-Box." That evening, nVIDIA's president and chief executive officer sent an email entitled "X is Ours!" to all nVIDIA employees, informing them of the agreement and its huge revenue impact on nVIDIA. The next morning, March 6, nVIDIA's vice president of marketing sent an email to all nVIDIA employees entitled "xbox shhhhhh...", reminding them that news of the X-Box agreement was confidential. On the morning of March 6, 2000, as alleged in the filings, after reading both emails, Shrivastava began to acquire short-term nVIDIA call option contracts through an Internet brokerage account. In all, he spent $30,825 acquiring 100 nVIDIA option contracts. From March 7 through March 9, as rumors about the X-Box contract circulated on the Internet and in the press, nVIDIA's share price soared 71.4% to a March 9 closing price of $100.30. After Microsoft announced the X-Box agreement to the public on the morning of March 10, nVIDIA shares rose an additional 17.6% to close that day at $118, more than twice the closing share price on the day that Shrivastava made his options purchases. Shrivastava sold all 100 nVIDIA call option contracts between March 7 and March 10, realizing illegal profits of $446,724. In its civil complaint filed in the United States District Court for the Northern District of California, the SEC charges Shrivastava with securities fraud based on his illegal insider trading. The SEC's complaint seeks disgorgement of Shrivastava's illegal profits, plus interest, and civil monetary penalties of up to three times the amount of these profits. The complaint also seeks an injunction against Shrivastava prohibiting his future violations of the securities laws. The criminal complaint charges Shrivastava with one count each of securities fraud and wire fraud, each relating to his illegal trading in nVIDIA securities. The maximum statutory penalty for securities fraud is ten years' imprisonment; wire fraud carries a penalty of up to five years' imprisonment. If convicted, Shrivastava may also be fined as much as $500,000. In addition, Shrivastava may be required to forfeit $477,549, the amount seized by today's action. However, any sentence following conviction would be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and would be imposed in the discretion of the Court. As with all defendants, Shrivastava must be presumed innocent unless and until convicted. Helane L. Morrison, District Administrator for the SEC's San Francisco District Office, said: "Innocent investors can't compete fairly with employees who trade on inside information. Here, the people on the other side of Shrivastava's options purchases were swindled out of hundreds of thousands of dollars by his use of inside information about the X-Box contract. Employees in Silicon Valley and elsewhere need to understand that, in addition to bringing civil actions to enforce the insider trading laws, we will continue to refer appropriate cases to the U.S. Attorney's Office for criminal prosecution." Bruce J. Gebhardt, Special Agent in Charge of the San Francisco Office of the FBI, said: "The rapid economic growth of the Silicon Valley has led to increased fraud opportunities in securities matters. Consequently, fraud involving the high tech and Internet industries of the Silicon Valley is considered a high investigative priority of the San Francisco Office of the FBI, as evidenced by a number of continuing investigations." United States Attorney Robert S. Mueller, III said: "This case should send a strong signal to those who would take unfair advantage of their privileged positions in Silicon Valley. Not only will we aggressively prosecute insider trading cases, but we also will take swift action to seize trading profits." Today's charges are the result of investigations by the San Francisco offices of the SEC and the Federal Bureau of Investigation. Craig D. Martin handled the SEC investigation. Assistant U.S. Attorney William H. Kimball will prosecute the criminal case and Stephanie M. Hinds will handle the forfeiture proceeding. The SEC, FBI and U.S. Attorney's Office acknowledge the assistance of the American Stock Exchange in this matter. Press inquiries to the U.S. Attorney's Office should be directed to: Assistant U.S. Attorney Leslie R. Caldwell (415) 436-6778 Inquiries to the FBI should be directed to: Media Representative Special Agent Andrew Black (415) 553-7450 Press inquiries to the Securities and Exchange Commission should be directed to: Robert L. Mitchell, Assistant District Administrator (415) 705- 2351