Highlights
- The U.S. Supreme Court rejected Nvidia’s appeal, leaving the chipmaker to face securities fraud lawsuits again.
- The court did not disclose the reason for the dismissal, saying only that “the case was immediately accepted and dismissed.”
- Shareholders claim Nvidia misled investors about the role cryptocurrency mining played in its revenue growth in 2017 and 2018.
The U.S. Supreme Court rejected Nvidia’s attempt to appeal a high-profile securities fraud lawsuit, allowing the case to: NVIDIA v. E. Ohman J:or Fonder AB It takes place in federal court.
The decision was a major blow to Nvidia, which had sought to overturn the ruling by the U.S. Court of Appeals for the Ninth Circuit. The appeals court previously overturned a trial judge’s dismissal of the case, allowing investors to move forward with claims that Nvidia’s leadership, including CEO Jensen Huang, misrepresented the true drivers of the company’s record revenue growth in 2017 and 2018. I was able to.
Allegations against NVIDIA
The case, brought by Swedish investment firm E. Öhman J:or Fonder AB, alleges that Nvidia misled shareholders about its dependence on cryptocurrency-related revenue during the cryptocurrency boom in 2017 and 2018. The plaintiff alleged that Nvidia was under CEO. Jensen Huang downplayed the impact of cryptocurrency mining sales on flagship GeForce GPUs, explaining that the surge in revenue is primarily driven by gaming demand.
The lawsuit alleges that the cryptocurrency market crash in late 2018 faltered Nvidia’s financial performance, derailed its revenue forecasts and caused its stock price to fall more than 28% in two days. Shareholders claim the company failed to disclose risks posed by cryptocurrency market volatility, which could result in significant financial losses.
After a hearing in November, the Supreme Court today dismissed Nvidia’s appeal without explanation and upheld the Ninth Circuit’s decision. Nvidia argued that the lawsuit did not meet the strict requirements set by the Private Securities Litigation Reform Act of 1995, which aims to limit frivolous securities fraud claims. The company maintained its statements were not false or intentionally misleading.
“While we would have preferred a decision on the merits affirming the trial court’s dismissal of the case, we stand ready to continue our defense,” Nvidia said in a statement following the Supreme Court ruling.
Second securities case dismissed this quarter
During oral arguments, several justices expressed hesitation about intervening, suggesting that the case does not present broad legal issues suitable for Supreme Court review but rather factual disputes better resolved in lower courts.
The Supreme Court’s dismissal is considered a victory for shareholder rights and corporate responsibility.
A favorable ruling for Nvidia would have established an important legal precedent, making it easier for companies to secure early dismissals of shareholder lawsuits and avoid costly discovery proceedings. This notable case highlights the complex challenges courts face in balancing corporate protection from frivolous claims while maintaining strong standards for financial transparency and shareholder rights.
This is the second securities fraud case dismissed by the Supreme Court this quarter. Last month, it dismissed Meta Platforms’ appeal in a separate lawsuit over its handling of data collection allegations involving Cambridge Analytica.
But for Nvidia, the stakes remain high. The company already settled a related lawsuit with the Securities and Exchange Commission (SEC) for $5.5 million in 2020, but the shareholder lawsuit in question could result in additional financial and reputational damages.
next
disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to convey accurate and timely information, but should not be taken as financial or investment advice. Market conditions can change rapidly, so please verify the information yourself and consult with an expert before making a decision based on the information.
Chimamanda is a cryptocurrency enthusiast and experienced writer focused on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in emerging economies. She combines her passion for blockchain technology with her love of travel and food, bringing a fresh and engaging perspective to her work.
