As a seasoned analyst with over two decades of experience in the tech industry, I’ve seen my fair share of legal battles and market fluctuations. The recent decision by the Supreme Court to reinstate the class-action suit against Nvidia is an intriguing development, to say the least.
In simpler terms, Nvidia is now facing a lawsuit by a group of investors who claim that the company deceived them about the amount of sales to cryptocurrency miners. This lawsuit comes after the U.S. Supreme Court refused to dismiss the case, meaning it will proceed.
On December 11, the justices simply chose to dismiss Nvidia’s appeal without offering any reasoning. This move effectively upholds the ruling of an appeals court that reinstated the case, which had been previously thrown out by a California district court in March 2021.
Nvidia aimed to challenge the decision made by the Ninth Circuit Court of Appeals in August, which reinstated a lawsuit filed by Nvidia shareholders in 2018. The allegation was that the company concealed over a billion dollars worth of GPU sales to cryptocurrency miners, and that CEO Jensen Huang underestimated the extent of sales within the industry.
In an ideal scenario, we’d like the decision to uphold the trial court’s dismissal of the case based on its merits, but we are well-prepared to carry on with our defense if necessary,” said a representative from Nvidia, speaking to CryptoMoon.
Maintaining uniform and foreseeable rules in lawsuits related to securities is vital for safeguarding investors and fostering a robust economy. We continue to stand behind this principle.
In their lawsuit, shareholders claimed that Nvidia’s GPU sales were artificially boosted by selling to cryptocurrency miners. They noted a specific period when sales dropped significantly following the decline of the crypto market in late 2018, causing Nvidia’s stock price to plummet approximately 30% over two consecutive days.
Nvidia contends that the lawsuit’s foundation was built on a false expert opinion, manipulating details about its business and revenue. In October, the class action group received support from both the Department of Justice and the Securities and Exchange Commission, who countered Nvidia’s argument, stating that such an incident did not transpire in this case.
The agencies pointed to the investors’ case — said to have evidence including statements from ex-Nvidia executives and a Bank of Canada report claiming Nvidia understated its crypto revenue by $1.35 billion.
The Supreme Court’s decision to dismiss the case follows its review of the case on November 13, during which several justices expressed doubts about whether the court should have taken up the case in the first place, or if the case contained a matter worthy of their ruling.
In 2022, Nvidia agreed to pay a fine of $5.5 million to the Securities and Exchange Commission (SEC) for failing to provide sufficient information about how cryptocurrency mining affected their gaming operations. They did not admit nor deny the SEC’s allegations in this settlement.
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2024-12-12 05:27