🔥 Nvidia Faces New Legal Blow as U.S. DOJ Backs Investor Lawsuit
posted 4 Oct 2024
The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have officially backed a group of investors in a class action lawsuit against Nvidia.
Regulators argue that Nvidia, a leading chip manufacturer, misrepresented its sales figures related to the cryptocurrency mining sector, and they believe these allegations warrant further judicial review.
The lawsuit, which dates back to 2018, stems from Nvidia’s apparent failure to accurately disclose the extent of its business related to cryptocurrency mining. After the crypto market downturn, investors noticed that Nvidia’s revenues were significantly tied to the sale of graphics processing units (GPUs) to cryptocurrency miners.
The plaintiffs accuse Nvidia of underreporting its GPU sales by over $1 billion, with Nvidia CEO Jensen Huang allegedly downplaying the company’s dependency on the cryptocurrency market.
Nvidia has countered, claiming the lawsuit is based on an expert report containing fabricated information. However, the DOJ and SEC have firmly disagreed with Nvidia's claims.
The regulators maintain that the evidence, including bank transaction data from former Nvidia executives and a report from the Bank of Canada, is entirely credible.
The DOJ and SEC have submitted their position to the U.S. Supreme Court for further consideration.
Regulators Back Nvidia Investors Source: U.S. Supreme Court
While a district court initially dismissed the case, US Solicitor General Elizabeth Prelogar and SEC senior lawyer Theodore Weiman argue there is enough evidence for the lawsuit to proceed in higher courts.
The Supreme Court will now decide whether the case should move forward.
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