TLDR
- Nvidia faces a class-action lawsuit in the Supreme Court, now supported by the US DOJ and SEC.
- The lawsuit asserts that Nvidia falsely reported over $1 billion in graphics card sales to the crypto mining sector.
- Initially thrown out, this legal case made a comeback after the appeals court reviewed it in August.
- The DOJ and SEC have presented arguments that the lawsuit has enough merit and details to be considered.
- A group of 12 previous SEC officials has also written a brief showing support for the investors.
The DOJ and SEC are aligning with a class-action lawsuit targeting Nvidia, a prominent name in technology.
The case, which has reached the Allegations in the Supreme Court touch on Nvidia's supposed misrepresentation of more than $1 billion in sales of graphics cards to those mining cryptocurrencies.
The origins of this lawsuit trace back to 2018, where Nvidia investors claimed the company, alongside its CEO Jensen Huang, understated the volume of their dealings with the cryptocurrency mining field.
According to the plaintiffs, Nvidia’s sales saw a notable increase due to crypto miners, a rise that was starkly evident when sales declined following the 2018 crypto market downturn.
After lower courts dismissed the suit, the Ninth Circuit appeals court gave it a second chance in August. Nvidia sought Supreme Court intervention to overturn this revival.
In an amicus brief filed On October 2nd, top DOJ and SEC lawyers, Elizabeth Prelogar and Theodore Weiman, highlighted that the lawsuit was detailed enough to avoid being struck out by a district court.
The DOJ and SEC urged the Supreme Court to progress with the case, given its significance concerning laws that curb trivial lawsuits related to securities.
This brief highlighted how essential private lawsuits are in complementing the DOJ and SEC’s criminal prosecutions and civil action cases.
It also countered Nvidia’s assertions that the disputed information was fabricated, stating this was not valid for this lawsuit.
Evidence refuting Nvidia’s defenses, including data from previous Nvidia executives and a Bank of Canada report, suggests an understatement of crypto revenue by $1.35 billion. This has been acknowledged by the DOJ and SEC in their filing.
In another connected development, 12 former SEC members issued their supportive amicus brief for the investors, emphasizing the importance of private enforcement in keeping US capital markets trustworthy.
These former officials critiqued Nvidia’s stance, implying such arguments would set precedents requiring plaintiffs to have internal company documents pre-discovery and prohibiting expert usage in early pleading.
Additionally, on October 2nd, six more amicus briefs supporting investor claims were submitted. Contributors included experts in quantitative fields, legal scholars, institutional investors, and groups like the American Association for Justice and the Anti-Fraud Coalition.
