In a turn of events involving a major player in the chip industry, the U.S. Supreme Court has decided not to consider Nvidia’s appeal regarding a class action lawsuit that dates back to 2018. The case, lodged by shareholders, accuses Nvidia of cryptocurrency fraud. Despite their efforts to have the case thrown out, Nvidia now faces the continuation of this legal challenge.
Appeal Rejected
The top court in the United States has decided to close the door on Nvidia’s attempt to overturn a lawsuit concerning allegations of securities fraud. This means the decision made by a lower court, which allows the lawsuit to proceed, remains intact. Nvidia had hoped to stop the lawsuit in its tracks, arguing it was unjust for the case to advance, but the ruling ensures the action moves forward.
Shareholders of the company contend that Nvidia misled its investors, claiming that the company failed to disclose how its sales were heavily dependent on fluctuations in the cryptocurrency market. This lawsuit hinges on the allegation that Nvidia did not fully reveal the true extent of its financial reliance on the volatile crypto sector.
Moving Forward with the Legal Battle
The continuation of this case becomes inevitable as the Supreme Court refused Nvidia’s appeal, thereby solidifying the lower court’s decision. This marks a significant step, as Nvidia must now prepare to face the claims put forth in the lawsuit.
Insights from the Supreme Court suggested that the justices felt the case did not present sufficient legal questions requiring their intervention. The complexities involved in the issues presented by Nvidia seemed more factual than legal, prompting the court to refrain from diving into such a technical matter.
Allegations of Fraud
Back in 2018, Nvidia experienced a surge in popularity due to its involvement in crypto mining. However, during the same period, shareholders accused the company of breaching the Securities Exchange Act of 1934, asserting that Nvidia underplayed the true impact of crypto-related sales on its growth. They argue this omission misled investors and analysts in evaluating the company’s performance amidst the crypto boom.
In 2021, Nvidia briefly celebrated success when a federal judge ruled in its favor, dismissing the case. However, the 9th U.S. Circuit Court of Appeals later overturned that decision, breathing new life into the fraud allegations.
Featured image from Morningstar, chart from TradingView
