AMD securities fraud lawsuit will go forward

AMD is in hot water over claims it made leading up to the release of Llano, theĀ first-generation APU it launched back in 2011. According to a report from Reuters, a group of investors filed a federal suit against AMD last year alleging the company tried to inflate its share price by making misleading statements about Llano's projected availability. Now, the judge in that case has ruled that there is sufficient evidence for the case to proceed.

Reuters describes the controversial course of events as follows:

The lawsuit said Advance Micro's then-Chief Financial Officer Thomas Seifert told analysts on an April 2011 conference call that problems with chip production for the Llano were in the past, and that the company would have ample product for a launch in the second quarter.

Advanced Micro officials continued to state that there were no problems with supply, concealing the fact that it was only shipping Llanos to top-tier computer manufacturers because of supply constraints, the lawsuit said.

By the time Advanced Micro was ready to ramp up shipments in late 2011, demand had dwindled, leading to an inventory glut, the lawsuit said. Advanced Micro eventually disclosed in October 2012 that it was writing down $100 million of Llano inventory as not salable, the lawsuit said.

Those allegations are disappointing if they're true. We'll watch for more news relating to this case as it progresses.

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