The US Supreme Court has dismissed Nvidia’s appeal to have a class-action lawsuit against the chipmaker thrown out. The lawsuit alleges that Nvidia misled investors about the extent of its sales to cryptocurrency miners.
The court’s decision, issued without explanation, reinstates a lower court ruling that revived the 2018 lawsuit. This suit claims Nvidia concealed over $1 billion in GPU sales to crypto miners and that CEO Jensen Huang downplayed the significance of this segment to the company’s revenue.
Allegations of Misleading Investors
The shareholders allege that Nvidia’s GPU sales were heavily reliant on the cryptocurrency mining market. When the cryptocurrency market crashed in late 2018, Nvidia’s sales plummeted, causing its share price to drop significantly.
Nvidia argued that the lawsuit relied on fabricated information and that the expert opinion presented by the investors was unreliable. However, the Justice Department and the Securities and Exchange Commission supported the investors’ case, citing evidence including statements from former Nvidia executives and a Bank of Canada report.
Previous Settlements and Legal Battles
In 2022, Nvidia settled charges with the SEC, agreeing to pay $5.5 million without admitting or denying the agency’s findings regarding its disclosures about the impact of cryptocurrency mining on its gaming business.
Implications
The Supreme Court’s decision to dismiss Nvidia’s appeal means the company will now have to defend itself against the class-action lawsuit. This development has significant implications for Nvidia, potentially impacting its future financial performance and legal standing.
December 2024, Cryptoniteuae
