[ad_1]
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.
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.
[ad_2]
