Supreme Court to Hear Nvidia Appeal in Crypto Sales Lawsuit | ORBITAL AFFAIRS

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The U.S. Supreme Court to Hear Nvidia’s Appeal in Securities Fraud Lawsuit

Key Takeaways:

  • The U.S. Supreme Court has agreed to hear Nvidia’s appeal of a lower-court ruling allowing a shareholder class-action lawsuit accusing the AI chipmaker of securities fraud.
  • The lawsuit, initiated in 2018, alleges that Nvidia, CEO Jensen Huang, and CFO Colette Kress misled shareholders about the company’s revenue from the cryptocurrency industry.
  • A district court judge initially dismissed the suit in 2021, but the Ninth Circuit Court of Appeals revived it last August.

The U.S. Supreme Court has made a significant decision to hear Nvidia’s appeal in a shareholder class-action lawsuit that accuses the AI chipmaker of securities fraud. The case, brought by investors from California and led by Sweden-based investment manager E. Ohman J:or Fonder AB, has been a point of contention since its initiation in 2018.

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The lawsuit specifically targets Nvidia, CEO Jensen Huang, and CFO Colette Kress, alleging that they provided misleading information to shareholders regarding the company’s revenue from the cryptocurrency industry. The claim suggests that Nvidia understated over $1 billion in sales to crypto miners, leading to a significant discrepancy in reported earnings.

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Initially, a district court judge in San Francisco dismissed the lawsuit in 2021. However, last August, the Ninth Circuit Court of Appeals revived the case, stating that the complaint adequately alleged that Huang and Kress made false or misleading statements during the Class Period. This misinformation allegedly led investors and analysts to believe that Nvidia’s crypto-related revenues were substantially lower than they actually were.

In response to inquiries from Investopedia regarding the Supreme Court’s decision to review the case, Nvidia declined to provide any comments. Despite this legal battle, Nvidia’s stock prices have remained relatively stable, with shares trading slightly up at $132.11 as of 1 p.m. ET. The stock had reached an all-time high of $133.73 earlier in the session, reflecting a year-to-date increase of over 160%.

The ongoing legal proceedings have undoubtedly impacted Nvidia’s reputation and financial standing in the market. The outcome of the Supreme Court’s review will be closely watched by investors and industry analysts alike, as it could have far-reaching implications for how companies disclose their financial information and interact with shareholders.

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As the case continues to unfold, it serves as a reminder of the importance of transparency and accountability in corporate governance. Shareholders rely on accurate and timely information to make informed investment decisions, and any misrepresentation can have severe consequences for both the company and its stakeholders.

In conclusion, Nvidia’s appeal in the securities fraud lawsuit will be a critical moment for the company and the broader tech industry. The Supreme Court’s decision could set a precedent for how similar cases are handled in the future and may impact how companies disclose their financial dealings with specific industries. As the legal battle progresses, all eyes will be on Nvidia and its leadership as they navigate this challenging situation.

For more updates on this developing story, please visit Investopedia for the latest news and analysis on Nvidia’s appeal in the securities fraud lawsuit.

News Desk

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