The US is entering the fray as it backs a class-action lawsuit against tech giant and graphics processing units manufacturer, Nvidia Corp. The Department of Justice and Securities and Exchange Commission are appealing to the Supreme Court to revive a case that accuses Nvidia Corp. of misleading investors about its revenue from cryptocurrency mining. This litigation has been on a rollercoaster ride since it was filed in 2018 and is back on the agenda.
Government Support For Investors
In an amicus brief that was filed October 2, Solicitor General Elizabeth Prelogar and SEC senior lawyer Theodore Weiman argued that the case has sufficient facts to resurrect the course of action. They said Nvidia’s executives, particularly Chief Executive Jensen Huang, had understated the dependence on crypto mining revenue during a period when such sales were through the roof.
The brief underlines how private actions are an essential piece of the securities enforcement puzzle, making the government have a concrete interest in this case. Oral arguments before the Supreme Court are scheduled for November.
The Ninth Circuit Court of Appeals dismissed the case in 2021 as it had no evidence. But in a split panel decision last August, it reinstated it upon further review. Investor plaintiffs claim that before the 2018 crash, Nvidia had misrepresented how much it relied on the revenue generated from crypto mining. Huang’s statements were misleading, thus causing liability for securities fraud, they added.
