Nvidia To Pay SEC $5.5M with Inadequate Disclosures about Impact of Cryptomining
The U.S. Securities and Exchange Commission (SEC) has now penalized graphics card manufacturer Nvidia $5.5 million for failing to disclose to investors how much of its 2017-2018 revenue comes from cryptocurrency miners.
The SEC confirmed the accusations and settlement with the corporation on Friday. The regulator claims in its judgment that software company deceived investors by reporting a big growth in gaming-related revenue while hiding the extent to which its performance was based on the substantially riskier cryptocurrency industry.
As part of the settlement, Nvidia does not admit wrongdoing but undertakes to stop any illegal failures to give information. Customers discovered that the Santa Clara company’s CPUs, which were developed and marketed for gaming, were also efficient at creating new cryptocurrency, notably Ethereum.
Graphics cards, such as those manufactured by Nvidia, are well-suited for ethereum mining. In 2017, the price of ether surged from about $10 to more than $800, driving miners to purchase new equipment.
In particular, the SEC highlighted two Nvidia disclosures from 2018 which reported “material” revenue growth in its gaming business, even though this company knew that growth was significantly driven by crypto mining.
“Despite this, Nvidia did not disclose in its Forms 10-Q, as it was required to do, these significant earnings and cash flow fluctuations related to a volatile business for investors to ascertain the likelihood that past performance was indicative of future performance,” the SEC said in a press release.
“Nvidia’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market,” said Kristina Littman, who runs the SEC Enforcement Division’s Crypto Assets and Cyber Unit.
The alleged omission was deemed misleading by regulators since this company has already stated the extent to which other aspects of its company were boosted by crypto demand. The US Securities and Exchange Commission stated that it gave the impression that cryptocurrency mining had no impact on company’s gaming market.
Colette Kress, company’s chief financial officer, stated in February’s earnings comments, “Our GPUs are capable of cryptocurrency mining, but we have limited visibility into how this affects our total GPU demand.”
Nvidia settled without admitting or denying the allegations. The firm’s share price fell around 4% during intraday trading on Friday after news of the settlement broke.
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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Nvidia To Pay SEC $5.5M with Inadequate Disclosures about Impact of Cryptomining
The U.S. Securities and Exchange Commission (SEC) has now penalized graphics card manufacturer Nvidia $5.5 million for failing to disclose to investors how much of its 2017-2018 revenue comes from cryptocurrency miners.
The SEC confirmed the accusations and settlement with the corporation on Friday. The regulator claims in its judgment that software company deceived investors by reporting a big growth in gaming-related revenue while hiding the extent to which its performance was based on the substantially riskier cryptocurrency industry.
As part of the settlement, Nvidia does not admit wrongdoing but undertakes to stop any illegal failures to give information. Customers discovered that the Santa Clara company’s CPUs, which were developed and marketed for gaming, were also efficient at creating new cryptocurrency, notably Ethereum.
Graphics cards, such as those manufactured by Nvidia, are well-suited for ethereum mining. In 2017, the price of ether surged from about $10 to more than $800, driving miners to purchase new equipment.
In particular, the SEC highlighted two Nvidia disclosures from 2018 which reported “material” revenue growth in its gaming business, even though this company knew that growth was significantly driven by crypto mining.
“Despite this, Nvidia did not disclose in its Forms 10-Q, as it was required to do, these significant earnings and cash flow fluctuations related to a volatile business for investors to ascertain the likelihood that past performance was indicative of future performance,” the SEC said in a press release.
“Nvidia’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market,” said Kristina Littman, who runs the SEC Enforcement Division’s Crypto Assets and Cyber Unit.
The alleged omission was deemed misleading by regulators since this company has already stated the extent to which other aspects of its company were boosted by crypto demand. The US Securities and Exchange Commission stated that it gave the impression that cryptocurrency mining had no impact on company’s gaming market.
Colette Kress, company’s chief financial officer, stated in February’s earnings comments, “Our GPUs are capable of cryptocurrency mining, but we have limited visibility into how this affects our total GPU demand.”
Nvidia settled without admitting or denying the allegations. The firm’s share price fell around 4% during intraday trading on Friday after news of the settlement broke.
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.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Harold
CoinCu News
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