WASHINGTON (AP) — supreme court allows class action lawsuits to bring charges against Nvidia Misled investors about its past reliance on computer chip sales to advance mining of volatile cryptocurrencies.
Wednesday’s court decision came in the same week that China said it would. Under investigation Criticizes microchip companies for allegedly violating China’s antitrust laws. Four weeks ago, the justices heard NVIDIA’s arguments to halt the lawsuit, deciding it was wrong to take up the case in the first place. They left an appellate judgment dismissing the company’s appeal and allowing the case to proceed.
At issue is a 2018 lawsuit led by a Swedish investment management company. This comes as NVIDIA’s revenue fell short of expectations and the company’s stock price fell 28% due to declining profitability in cryptocurrencies.
Nvidia had argued that the investor lawsuit should be thrown out because it falls short of the Private Securities Litigation Reform Act, a 1995 law aimed at banning frivolous complaints. A district court judge had dismissed the complaint before the federal appeals court in San Francisco ruled that the case could proceed. The Biden administration sided with investors before the Supreme Court.
“This is a victory for corporate accountability. When companies mislead shareholders, confidence in the market is undermined. Enabling investors to seek justice is a victory for maintaining fairness and transparency. Deepak Gupta, who represented investors in the Supreme Court, said in a statement.
In 2022, Santa Clara, California-based NVIDIA paid a $5.5 million fine to settle a lawsuit. securities and exchange commission It did not disclose that cryptomining was an important source of increased revenue from the sale of graphics processing equipment manufactured and sold for gaming. The company admitted no wrongdoing as part of the settlement.
Nvidia’s recent performance has been impressive. Even after the news of the China investigation, the company’s stock price has risen 180% this year.
Nvidia has led the artificial intelligence field to become one of the biggest companies on the stock market, as the tech giant continues to invest heavily in its chips and data centers needed to train and operate its AI systems.
The case is one of two high court cases involving class actions against tech companies. The judges also rejected an appeal from Facebook’s parent company. meta The lawsuit sought to end a multibillion-dollar investor class action lawsuit stemming from a privacy scandal. Cambridge Analytica Political consulting company.
