WASHINGTON, Monday, June 24, 2024 – The U.S. Supreme Court on Monday agreed to hear an appeal from chipmaker Nvidia regarding a shareholder lawsuit accusing the company of misleading investors about the extent of its sales to the cryptocurrency industry.1
The lawsuit, originally filed in 2018, alleges that Nvidia downplayed the role of cryptocurrency mining in its revenue during the 2017-2018 boom period. This, according to the plaintiffs, inflated the company’s stock price.
A lower court judge initially dismissed the case in 2021. However, the Ninth Circuit Court of Appeals revived the lawsuit last year, finding that the shareholders had adequately alleged Nvidia made false or misleading statements.
Nvidia is appealing the Ninth Circuit’s decision, arguing that the case could set a dangerous precedent for future securities lawsuits. The company claims the lower court’s standards for pleading fraud were too low and could lead to “abusive and speculative litigation.”
The Supreme Court’s decision to hear the case indicates they see legal significance in the issue. The court will likely focus on the standard of proof required for shareholders to bring a securities fraud lawsuit. This could have broader implications for similar cases involving emerging technologies like cryptocurrency.
Arguments in the case are expected to be heard during the court’s next term, which begins in October.
- investopedia.com: https://www.investopedia.com/supreme-court-agrees-to-hear-nvidia-appeal-of-crypto-sales-lawsuit-8664473[↩]
