The US Supreme Court agreed on June 17, 2024, to hear Nvidia's appeal to dismiss a securities fraud lawsuit accusing the company of misleading investors about its sales to the cryptocurrency industry. This follows a 9th US Circuit Court of Appeals ruling that revived a proposed class action led by Swedish investment firm E. Ohman J. Fonder AB. The plaintiffs allege Nvidia and CEO Jensen Huang violated the Securities Exchange Act of 1934 by downplaying crypto mining’s impact on revenue growth in 2017 and 2018, misleading investors and analysts.
Nvidia, based in Santa Clara, California, has significantly benefited from the AI boom, resulting in a substantial market value increase. Initially dismissed by US District Judge Haywood Gilliam Jr. in 2021, the lawsuit was reinstated by the 9th Circuit, which found adequate allegations that Huang made knowingly false or misleading statements. Nvidia argues that the 9th Circuit’s decision could lead to speculative litigation. Previously, Nvidia settled with US authorities for $5.5 million over improper disclosures about crypto mining’s impact on its gaming business. Additionally, the Supreme Court agreed to hear a similar appeal by Meta's Facebook concerning securities fraud allegations related to data misuse disclosures.
