The Supreme Court has decided to take a closer look at the lawsuit filed against Nvidia, a major technology company. The lawsuit claims that Nvidia and its CEO, Jensen Huang, provided false information to investors regarding the company’s involvement in the cryptocurrency industry.
According to the lawsuit, Nvidia allegedly misrepresented the amount of its sales that were related to crypto activities. The plaintiffs, who are shareholders from California, are seeking unspecified damages for the misleading statements made by Nvidia.
Nvidia had previously claimed that it closely monitors the cryptocurrency markets and adjusts its business accordingly. The company also stated that a decrease in demand for its products from crypto miners would not negatively impact its overall business due to the strong demand from the gaming industry.
This case has significant implications as the Supreme Court’s decision to review it could impact the ability of shareholders to hold companies accountable for securities and financial fraud. If the lawsuit is successful, it may set a precedent for future cases of this nature.
The background of the lawsuit dates back to 2018 when plaintiffs accused Nvidia of downplaying the importance of crypto-related purchases in driving the company’s revenue growth. Nvidia’s chips are widely used in crypto mining, which has contributed to the company’s success in recent years.
Although the lawsuit was initially dismissed in 2021, it was revived by the Ninth U.S. Circuit Court of Appeals in San Francisco. The court ruled in favor of the plaintiffs, stating that there was enough evidence to suggest that Nvidia had made false or misleading statements about its business practices.
Nvidia has argued that the allegations lack specificity and should not proceed to trial. The company believes that the Ninth Circuit’s decision could lead to frivolous lawsuits that harm businesses.
In a separate development, Nvidia recently settled charges with U.S. authorities by paying $5.5 million. The charges accused the company of failing to disclose the impact of crypto mining on its gaming business.
Despite these legal challenges, Nvidia’s stock price reached a new high, surpassing Apple’s total market value and becoming the second-largest company in the global market. This demonstrates the company’s continued success and growth, despite the legal issues it is facing.