- Nvidia faced Supreme Court review for securities fraud.
- Nvidia’s $3.34 trillion market value surpassed Microsoft and Apple.
In a recent turn of events, the US Supreme Court agreed to review Nvidia’s request to dismiss a securities fraud lawsuit, which alleges that Nvidia misled investors about its cryptocurrency-related sales.
The Supreme Court takes charge
Following the request, on June 17, the Supreme Court agreed to hear Nvidia’s attempt to dismiss this lawsuit.
The court granted Nvidia’s request after a lower court revived a proposed class action lawsuit by California shareholders against Nvidia and CEO Jensen Huang, seeking unspecified damages.
The story so far…
This all started in 2018, when Nvidia chips gained popularity for cryptocurrency mining due to their ability to perform complex mathematical calculations needed to mine cryptocurrencies like Bitcoin. [BTC].
The plaintiffs accused Nvidia and its top officials of violating the Securities Exchange Act of 1934, alleging that Nvidia’s statements in 2017 and 2018 understated the impact of cryptocurrency-related sales on its revenue growth.
Nvidia’s omissions allegedly misled investors and analysts about the impact of crypto mining on its business.
Following this, U.S. District Judge Haywood Gilliam Jr. dismissed the lawsuit in 2021, but the U.S. Court of Appeals for the Ninth Circuit in San Francisco revived it with a 2-1 ruling.
According to Reuters, the plaintiffs had properly claimed that Nvidia CEO Jensen Huang did,
“Knowingly or recklessly false or misleading statements.”
However, the appeals court found that this was simply a maneuver to continue the lawsuit. Nvidia appealed to the Supreme Court, arguing that the Ninth Circuit’s decision could lead to,
“Abusive and speculative litigation.”
Nvidia stands firm
Despite the ongoing lawsuit, Nvidia shares rose 3.5% on June 18, raising its market value to approximately $3.34 trillion.
Source: Google Finance
This move has positioned Nvidia ahead of Microsoft and Apple in the race for the top spot among the world’s most valuable companies.
This notable achievement underscores investor confidence in Nvidia’s technological prowess despite the allegations.
Source: Wise Advice/X
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