Nvidia investors are taking their battle to the U.S. Supreme Court as they claim that the tech giant misled them about how reliant it was on sales to cryptocurrency miners. The U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) are backing these investors, suggesting their solid claims shouldn’t be dismissed.
The government reportedly said the high court should uphold the proposed class action escalation done by the U.S. Court of Appeals for the Ninth Circuit. Investors allege that Nvidia and CEO Jensen Huang downplayed their crypto mining revenue before the 2018 market crash.
Nvidia faces off against investors
According to a report, the U.S. Supreme Court is set to hear the case on November 13, 2024, while Solicitor General Elizabeth Prelogar is pushing for 10 minutes of argument time. The Ninth Circuit has already revived the case by stating that Huang’s statements might have been materially false or misleading. It is now the apex court’s turn to look into the matter.
Investors have argued that Nvidia failed to disclose just how much it was raking in from crypto mining. It’s an omission that allegedly cost them big when the crypto market crashed. However, private investor suits like this one can help fill gaps that government enforcement can’t fully reach.
Nvidia’s share price has seen a massive rally lately. Its per-share price surged by a whopping 42% in the last 6 months and around 178% in the last year. NVDA share price jumped by another 3% in the past 24 hours to trade at $122.80.
Nvidia investors challenge misleading claims
The tech giant came in with heat to the U.S. Supreme Court and claimed that investors based their securities fraud allegations on a hired expert’s “invented” data about its revenue streams. In a brief submitted on August 13, it argued that the panel’s decision misinterpreted the Private Securities Litigation Reform Act (PSLRA). It also suggested that this could weaken protections against abusive litigation.
Meanwhile, on September 25, the investors pushed back while asserting that their complaint relies on credible sources painting a compelling case for fraud. They highlighted various shreds of evidence including firsthand accounts from former Nvidia executives worldwide, a Royal Bank of Canada report that concluded that Nvidia earned $1.35 billion more from crypto-mining than it told the public.
It further includes chipmaker’s own public statements and SEC filings with internal documents and data sources.
Source: https://www.cryptopolitan.com/nvidia-mislead-investors-over-crypto-sales-doj-and-sec-want-answers/