The DOJ and SEC are backing a class action lawsuit against Nvidia, urging the Supreme Court to proceed with it.
The lawsuit alleges that Nvidia misrepresented over $1B in sales to crypto miners and downplayed their importance.
The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are backing a class action lawsuit against Nvidia that has been revived, according to recent reports. The legal case revolves around claims that Nvidia manipulated its sales related to the cryptocurrency mining sector.
(Source: US Supreme Court )
In an amicus brief submitted on October 2, U.S. Solicitor General Elizabeth Prelogar and SEC senior lawyer Theodore Weiman explained that the U.S. has a vested interest in the Nvidia case as it addresses key aspects of the Private Securities Litigation Reform Act (PSLRA), particularly regarding the requirements for proving falsehood and intent in securities fraud cases.
The DOJ and SEC believe the lawsuit has enough valid details for it to move forward despite its dismissal by a district court in 2021. They urged the Supreme Court to approve its reconsideration by an appeals court. They emphasized that private actions like this are essential in supplementing enforcement measures from the DOJ and SEC.
Investor Lawsuit Against Nvidia Revived After Initial Dismissal
The investor group initially sued Nvidia in 2018, claiming that the company had hidden over $1 billion in graphics card sales to cryptocurrency miners. They argued that Nvidia’s CEO, Jensen Huang, played down the importance of these sales, which became evident when the company’s revenue dipped as the crypto market declined.
Though the case was dismissed earlier, the appeals court decided to revive it in August 2023. Nvidia has since sought the Supreme Court’s intervention to overturn this decision. The tech company argued that the suit relied on flawed expert analysis, but the DOJ and SEC disagreed, supporting the investors’ claims instead.
Supporting the investors, 12 former SEC officials also filed a separate amicus brief that stressed the importance of private securities lawsuits in safeguarding U.S. capital markets. Additionally, six more groups, including legal experts, institutional investors, and anti-fraud advocates, submitted briefs favoring the lawsuit.
While Nvidia has chosen not to comment on these recent developments, the DOJ, SEC, and others are pushing for a deeper look into the allegations against the chipmaker.
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