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News

Nvidia Crypto Lawsuit Under Review by Supreme Court

June 17, 2024 - Around 2 mins mins to read

Key Points:

  • Nvidia crypto lawsuit was reviewed Supreme Court over claims of misleading investors about cryptocurrency revenue.
  • Shareholders allege Nvidia hid reliance on cryptocurrency mining for revenue growth in 2017-2018.
The U.S. Supreme Court is set to review a Nvidia crypto lawsuit accusing the tech giant of misleading investors about its revenue from cryptocurrency mining. The decision, reported by Bloomberg, could significantly influence future securities fraud lawsuits.
Nvidia Crypto Lawsuit Under Review by Supreme Court

Supreme Court to Hear Nvidia Crypto Lawsuit

The Nvidia crypto lawsuit involves claims that the company obscured the primary driver behind its GeForce GPU sales during 2017 and 2018. Shareholders allege that CEO Jensen Huang and the company did not disclose that much of the revenue growth was fueled by cryptocurrency mining rather than gaming sales. This omission, they argue, left the company vulnerable to the volatile cryptocurrency market, a risk that was not adequately communicated to investors.

In November 2018, Nvidia announced it had missed revenue projections, leading to a 28% drop in its stock over two days. Shareholders claim this drop was a result of the company’s previous misleading statements about the sources of its revenue.

Potential Impact on Shareholder Litigation

Nvidia contends that the shareholders have not presented sufficient internal evidence to support their allegations of deceptive practices. The case’s outcome could hinge on the protections offered to companies under the 1995 Private Securities Litigation Reform Act, which was designed to curb frivolous securities lawsuits.

A ruling in favour of Nvidia would empower companies to seek early dismissal of similar shareholder lawsuits, potentially reducing the financial and legal burdens associated with defending against such claims. This term, the Supreme Court is also reviewing a related case involving Meta Platforms Inc. and the Cambridge Analytica scandal, further underscoring the significance of this period for shareholder litigation.

Despite the ongoing legal battles, Nvidia’s stock continues to perform well, recently reaching an all-time high and surpassing Apple’s market value. In 2020, Nvidia paid $5.5 million to settle related allegations with the Securities and Exchange Commission.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

GeForce GPU

Nvidia

Nvidia Crypto Lawsuit

SEC

Supreme Court

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Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
News

Nvidia Crypto Lawsuit Under Review by Supreme Court

Key Points:

  • Nvidia crypto lawsuit was reviewed Supreme Court over claims of misleading investors about cryptocurrency revenue.
  • Shareholders allege Nvidia hid reliance on cryptocurrency mining for revenue growth in 2017-2018.
The U.S. Supreme Court is set to review a Nvidia crypto lawsuit accusing the tech giant of misleading investors about its revenue from cryptocurrency mining. The decision, reported by Bloomberg, could significantly influence future securities fraud lawsuits.
Nvidia Crypto Lawsuit Under Review by Supreme Court

Supreme Court to Hear Nvidia Crypto Lawsuit

The Nvidia crypto lawsuit involves claims that the company obscured the primary driver behind its GeForce GPU sales during 2017 and 2018. Shareholders allege that CEO Jensen Huang and the company did not disclose that much of the revenue growth was fueled by cryptocurrency mining rather than gaming sales. This omission, they argue, left the company vulnerable to the volatile cryptocurrency market, a risk that was not adequately communicated to investors.

In November 2018, Nvidia announced it had missed revenue projections, leading to a 28% drop in its stock over two days. Shareholders claim this drop was a result of the company’s previous misleading statements about the sources of its revenue.

Potential Impact on Shareholder Litigation

Nvidia contends that the shareholders have not presented sufficient internal evidence to support their allegations of deceptive practices. The case’s outcome could hinge on the protections offered to companies under the 1995 Private Securities Litigation Reform Act, which was designed to curb frivolous securities lawsuits.

A ruling in favour of Nvidia would empower companies to seek early dismissal of similar shareholder lawsuits, potentially reducing the financial and legal burdens associated with defending against such claims. This term, the Supreme Court is also reviewing a related case involving Meta Platforms Inc. and the Cambridge Analytica scandal, further underscoring the significance of this period for shareholder litigation.

Despite the ongoing legal battles, Nvidia’s stock continues to perform well, recently reaching an all-time high and surpassing Apple’s market value. In 2020, Nvidia paid $5.5 million to settle related allegations with the Securities and Exchange Commission.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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