US Supreme Court bucks Nvidia’s appeal to dismiss crypto class suit
Nvidia faces a class-action suit alleging it misled investors about the volume of sales to crypto miners after the United States Supreme Court dismissed the chip maker’s appeal to throw it out.
The justices issued a one-line order on Dec. 11, dismissing Nvidia’s appeal without providing any explanation. The decision effectively reinstated an appellate court ruling that revived the lawsuit, initially dismissed by a California district court in March 2021.
Nvidia was looking to overturn the Ninth Circuit appeals court ruling from last August that revived the 2018 suit by a group of Nvidia shareholders claiming the firm hid over $1 billion in GPU sales made to crypto miners and that CEO Jensen Huang downplayed the volume of sales to the industry.
“We would have preferred a decision on the merits affirming the trial court’s dismissal of the case, but we are fully prepared to continue our defense,” an Nvidia spokesperson told Cointelegraph.
“Consistent and predictable standards in securities litigation are essential to protecting shareholders and ensuring a strong economy, and we remain committed to supporting them.”
In the suit, the shareholders alleged Nvdia’s GPU sales were propped up by selling to crypto miners, referencing a point in time when sales collapsed in line with the falling crypto market in late 2018, which sent Nvidia’s share price tumbling nearly 30% over two days.
Nvidia argued that the suit relied on fabricated information about its business and income. In October, the class group got back-up from the Justice Department and the Securities and Exchange Commission, which said Nvidia’s argument “is not what occurred here.”
The agencies highlighted the investors’ case, which reportedly includes evidence such as statements from former Nvidia executives and a Bank of Canada report alleging that Nvidia understated its cryptocurrency revenue by $1.35 billion.
The Supreme Court’s dismissal came after it heard arguments on Nov. 13, when some of the justices questioned why the court agreed to hear the case and if it even presented an issue that would require a ruling.
In 2022, Nvidia paid $5.5 million to the SEC to settle charges that it inadequately disclosed the impact of crypto mining on its gaming business, without admitting or denying the agency’s findings.