According to the latest report from Reuters on December 11, 2024, the U.S. Supreme Court has denied the appeal of artificial intelligence chip maker Nvidia regarding a lawsuit alleging securities fraud. This lawsuit targets Nvidia's alleged concealment of its revenue dependence on the volatile coin market.
Shareholders, led by the investment management company E. Ohman J:or Fonder AB from Stockholm, have brought this lawsuit since 2018. The allegations state that Nvidia and CEO Jensen Huang made false statements in 2017 and 2018, aimed at downplaying Nvidia's revenue dependence on crypto-related purchases.
Starting in 2017, when the prices of certain altcoins soared, Nvidia's chips became popular for coin mining - a complex computational process to mine cryptocurrencies like bitcoin and ether. By the end of 2018, as profits from crypto declined, Nvidia's revenue fell, leading to a sharp drop in their stock price in November.
This lawsuit seeks unspecified damages to compensate for the lost value of Nvidia shares held by investors. Meanwhile, in 2022, Nvidia agreed to pay $5.5 million to settle with U.S. government agencies but did not admit or deny the findings of federal regulators regarding the impact of coin mining on its gaming business.
The Supreme Court's decision upheld the ruling of the lower court, paving the way for this lawsuit to continue. This is a victory for corporate accountability, as stated by the attorney representing the shareholders, Deepak Gupta.
This lawsuit is one of two cases that the Supreme Court heard in November concerning the rights of private parties to hold companies accountable for allegations of securities fraud, with the other case involving Meta of Facebook also being similarly dismissed.
Information from Reuters shows increasing scrutiny of large technology companies as they face allegations of hiding critical information related to financial markets, particularly in the highly volatile coin and altcoin sector.
