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Nvidia has lost a Supreme Court challenge to try stop an investor-led lawsuit that says it understated its GPU sales to crypto miners.
Nvidia will have to face a class-action suit alleging it misled investors about the volume of sales to crypto miners after the United States Supreme Court dismissed the chip maker’s appeal to throw it out.
The justices issued a single-line order dismissing Nvdia’s appeal on Dec. 11, providing no explanation. It now reinstates an appellate court’s decision that revived the suit, which a California district court initially dismissed in March 2021.
Nvidia was looking to overturn the Ninth Circuit appeals court ruling from last August that revived a 2018 suit from a group of Nvidia shareholders claiming the firm hid over $1 billion in GPU sales made to crypto miners and that CEO Jensen Huang downplayed the volume of sales to the industry.
“We would have preferred a decision on the merits affirming the trial court’s dismissal of the case, but we are fully prepared to continue our defense,” an Nvidia spokesperson told Cointelegraph.
“Consistent and predictable standards in securities litigation are essential to protecting shareholders and ensuring a strong economy, and we remain committed to supporting them.”
The Supreme Court’s frank order, in its usual fashion, gave no explanation for why it dropped Nvidia’s appeal. Source: Supreme Court of the United States
In the suit, the shareholders alleged Nvdia’s GPU sales were propped up by selling to crypto miners, pointing to a point in time when sales collapsed in line with the falling crypto market in late 2018, which sent Nvidia’s share price tumbling nearly 30% over two days.
Nvidia argued the suit relied on an expert opinion that fabricated information about its business and income. In October, the class group got backup from the Justice Department and the Securities and Exchange Commission, which said Nvidia’s argument “is not what occurred here.”
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The agencies pointed to the investors’ case — said to have evidence including statements from ex-Nvidia executives and a Bank of Canada report claiming Nvidia understated its crypto revenue by $1.35 billion.
The Supreme Court’s dismissal comes after it heard arguments for the case on Nov. 13, where some of the justices questioned why the court agreed to hear it and if the case even presented an issue that would require it to rule on.
In 2022, Nvidia paid $5.5 million to the SEC to settle charges that it inadequately disclosed the impact of crypto mining on its gaming business without admitting or denying the agency’s findings.
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