Supreme Court Agrees To Hear Nvidia Appeal of Crypto Sales Lawsuit
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Key Takeaways
- The U.S. Supreme Court on Monday agreed to hear Nvidia’s appeal of a lower-court ruling allowing a shareholder class-action lawsuit that accuses the artificial intelligence (AI) chipmaker of securities fraud.
- The lawsuit, launched in 2018, charges the company, CEO Jensen Huang, and CFO Colette Kress of misleading shareholders about how much of its revenue came from those in the cryptocurrency industry.
- A district court judge in San Francisco tossed out the suit in 2021 but the Ninth Circuit Court of Appeals revived it last August.
The U.S. Supreme Court on Monday agreed to hear Nvidia’s (NVDA) appeal of a lower-court ruling allowing a shareholder class-action lawsuit that accuses the artificial intelligence (AI) chipmaker of securities fraud.
The case was brought by investors from California and was led by Sweden-based investment manager E. Ohman J:or Fonder AB.
Suit Tied To Nvidia Crypto Miner-Related Revenue
It charges the company, Chief Executive Officer (CEO) Jensen Huang, and Chief Financial Officer (CFO) Colette Kress of misleading shareholders about how much of its revenue came from those in the cryptocurrency industry, alleging that Nvidia understated more than $1 billion in sales to crypto miners.
The lawsuit was launched in 2018, and a district court judge in San Francisco tossed out the suit in 2021. However, last August, the Ninth Circuit Court of Appeals revived it, ruling “the complaint sufficiently alleged Defendants Huang and Kress made materially false or misleading statements during the Class Period, leading investors and analysts to believe that NVIDIA’s crypto-related revenues were much smaller than they actually were.”
When reached by Investopedia on Monday, Nvidia declined to comment on the Supreme Court decision to hear the case.
Shares of Nvidia were up slightly at $132.11 as of 1 p.m. ET after hitting an all-time high $133.73 earlier in the session. They are up more than 160% year-to-date.
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