Supreme Court Will Take Nvidia Shareholder Lawsuit
On Monday, the Supreme Court agreed to take a lawsuit regarding Silicon Valley tech giant Nvidia.
The case centers around the alleged deception by Nvidia against stockholders.
Depending on how the case goes, it will decide whether shareholders can pursue securities fraud lawsuits.
The Case
In May 2022, Nvidia agreed to pay the SEC a total of $5.5 million.
The money would be used to settle civil suits regarding the company’s failure to disclose the effect of cryptocurrency mining on its gaming operations.
The company never revealed to investors that it was using crypto mining as part of its revenue growth.
The Supreme Court approved the review of the case. The order was not signed, and no dissenting opinions were included.
A case must be approved by at least four of the justices on the bench before it can be reviewed by the court.
Nvidia specializes in graphics processors that have become very popular in the AI sector.
The company was sued by investors when it was revealed that it was deeply embedded in the cryptocurrency market, which, as I am sure you know, is extremely volatile.
The lawsuit claims that the company violated the federal Securities Exchange Act of 1934 by downplaying its involvement in the crypto markets.
The lawsuit was initially dismissed by an Obama-appointed judge, U.S. District Judge Haywood Gilliam Jr.
The 9th Circuit Court of Appeals, however, ruled that the CEP had made “false or misleading statements and did so knowingly or recklessly,” allowing the case to proceed.
Nvidia is now claiming that if the appellate court decision is not reversed, it “threatens to turn the Nation’s largest circuit into a haven for abusive securities litigation.”
From my perspective, so be it if the company is misleading investors. Their reasoning only seems to hint that this is far more common than most people realize.
