I feel like I'm going crazy reading the comments, and I guess, big props to the author for writing this in a way that pulls it off.
The issue here is, IMHO, not "Nvidia owes me stock in an ironclad way and gets away with it because of statue of limitations", but "I accepted an offer from Nvidia but the paperwork between the offer and the options grant differed in a way that both benefits me, and nobody noticed or cared about until now".
The original offer was for 25k shares, vesting over 4 years.
The options paperwork says 25k shares, vesting over 4 _quarters_.
Now, I'm not a lawyer, and certainly not a securities lawyer, but that seems like it could be reasonably chalked down to a clerical error on the options paperwork? "You made a mistake and now I can get a billion dollars more than we agreed to originally" doesn't feel like a great lawsuit!
Yeah, it's a little unclear but I think your interpretation is correct. The key is the paragraph beginning with:
> Imagine my surprise: according to the duly signed option agreement, my options were meant to vest over four quarters, not four years, as both NVIDIA’s CFO and their outside counsel, Cooley, had asserted back in 1996.
On first reading it did give me pause because it's the first time "four years" is mentioned. But on another scan I agree it's cleverly written and never actually claims the agreement was four quarters, only that the paperwork says that.
Still it is a funny story, similar to those "I spent 20 Bitcoins on a pizza" ones, I guess.
They should just offer to settle at a reasonable value as if it had been just the four quarters previously agreed, but a smart decision was made to sit on the shares.
It was meant to be four quarters, though. This was a clerical error, so why not offer to settle as if the clerk hadn't made a typo? "Yes technically you are owed this ridiculous amount of money, but it was meant to be a fraction so you get nothing unless you sue" seems harsh from Nvidia.
On the other hand this could open precedent in other cases, current and future, so it's an understandable position not to offer to settle preemptively just for a display of good faith.
It’s not clear what was “meant” to happen since the stated offer was for a 4 year vest. While the cover letter for the actual options grant says 4 quarters. It would be interesting to see what the actual governing documents referenced in the cover letter say since those are the actual terms. Presumably they match with the cover letter since lawyer time was spent on this at all, but it could of course also say a completely different 3rd vesting schedule
> They should just offer to settle at a reasonable value
Since litigation is costly, the acceptable range for a settlement is centered around the expected outcome of a trial, plus or minus each party's cost of litigation (including opportunity cost).
In this case, "the claim is barred by the statute of limitations" implies that the expected outcome of litigation would be approximately $0. The net range for a settlement is then the 'nuisance value' of a lawsuit including any PR damage for airing the case publicly; that would be orders of magnitude below the $1bn claim.
So basically a lower compensation is too low to justify the costs so it's either all in court or nothing? This design seems heavily biased towards the part with larger resources. Cost of litigation should be proportional to a reasonable settlement.
It's still absurd, because justice in this case doesn't come from equating these financial costs, this is an unfair system that privileges those with big pockets.
<a href="https://news.ycombinator.com/item?id=49878075">https://news.ycombinator.com/item?id=49878075 a system of fairness, not a system of exploitation
That’s why there are contingency agreements. There are a lot of lawyers out there. If one of them thinks there’s a good chance he’ll win, they’ll take the case.
> Cost of litigation should be proportional to a reasonable settlement.
What you’re really saying is that attorneys’ fees should proportionate to claim size. But I don’t think that works. If I am bound and determined to take a dispute for a $3 refund all the way to the Supreme Court, why should me attorney be required to do all that work for $1 or whatever?
You shouldn't, the state should provide the required infrastructure for both sides in case one's pushing fees up severely limiting the other party's options, which is often the party that's usually at a disadvantage. Either that or regulate the activity, but we know the later tends to devolve into instruments to be abused in an autocracy.
See one could think this is exceeding the role of the state, but this is not because these things are detrimental to trust which is required in the democratic state to facilitate economic transactions and employment contracts.
What do you think is going to happen to the courts if suing over small sums is effectively free? Don’t you think a lot of people are going to bring effectively irrelevant lawsuits generating enormous cost on everyone paying for this system?
I'm sure these questions have been posed and solved already because we have it in Brazil and while the judiciary is absurdly expensive here, I assure you it isn't because of irrelevant lawsuits (<a href="https://www1.folha.uol.com.br/internacional/en/business/2024/01/brazil-leads-spending-on-courts-among-53-countries.shtml#:~:text=Brazil%20Leads%20Spending,1.6%25%20of%20GDP." rel="nofollow">https://www1.folha.uol.com.br/internacional/en/business/2024...). This is a non-issue unless you can prove that this would happen in the US.
I'm Brazilian but that's not far from happening. If Flavio wins here it's possible that Brazil becomes a version of Puerto Rico but worse, in the form of a neo-colony for exploration of rare earths.
klausa · · focus · HN ↗
The issue here is, IMHO, not "Nvidia owes me stock in an ironclad way and gets away with it because of statue of limitations", but "I accepted an offer from Nvidia but the paperwork between the offer and the options grant differed in a way that both benefits me, and nobody noticed or cared about until now".
The original offer was for 25k shares, vesting over 4 years.
The options paperwork says 25k shares, vesting over 4 _quarters_.
Now, I'm not a lawyer, and certainly not a securities lawyer, but that seems like it could be reasonably chalked down to a clerical error on the options paperwork? "You made a mistake and now I can get a billion dollars more than we agreed to originally" doesn't feel like a great lawsuit!
globular-toast · · focus · HN ↗
> Imagine my surprise: according to the duly signed option agreement, my options were meant to vest over four quarters, not four years, as both NVIDIA’s CFO and their outside counsel, Cooley, had asserted back in 1996.
On first reading it did give me pause because it's the first time "four years" is mentioned. But on another scan I agree it's cleverly written and never actually claims the agreement was four quarters, only that the paperwork says that.
Still it is a funny story, similar to those "I spent 20 Bitcoins on a pizza" ones, I guess.
gchamonlive · · focus · HN ↗
fn-mote · · focus · HN ↗
Misreading. S/quarters/years/
gchamonlive · · focus · HN ↗
On the other hand this could open precedent in other cases, current and future, so it's an understandable position not to offer to settle preemptively just for a display of good faith.
tpmoney · · focus · HN ↗
Majromax · · focus · HN ↗
Since litigation is costly, the acceptable range for a settlement is centered around the expected outcome of a trial, plus or minus each party's cost of litigation (including opportunity cost).
In this case, "the claim is barred by the statute of limitations" implies that the expected outcome of litigation would be approximately $0. The net range for a settlement is then the 'nuisance value' of a lawsuit including any PR damage for airing the case publicly; that would be orders of magnitude below the $1bn claim.
gchamonlive · · focus · HN ↗
skinfaxi · · focus · HN ↗
What do you mean by this?
gchamonlive · · focus · HN ↗
NetMageSCW · · focus · HN ↗
gchamonlive · · focus · HN ↗
echoangle · · focus · HN ↗
gchamonlive · · focus · HN ↗
brookst · · focus · HN ↗
> Cost of litigation should be proportional to a reasonable settlement.
What you’re really saying is that attorneys’ fees should proportionate to claim size. But I don’t think that works. If I am bound and determined to take a dispute for a $3 refund all the way to the Supreme Court, why should me attorney be required to do all that work for $1 or whatever?
gchamonlive · · focus · HN ↗
See one could think this is exceeding the role of the state, but this is not because these things are detrimental to trust which is required in the democratic state to facilitate economic transactions and employment contracts.
echoangle · · focus · HN ↗
gchamonlive · · focus · HN ↗
frshgts · · focus · HN ↗
gchamonlive · · focus · HN ↗