Supreme Court Urged To Revive Nvidia Investor Lawsuit

According to Cointelegraph, the United States Justice Department and the Securities and Exchange Commission have urged the Supreme Court to greenlight a class-action lawsuit against Nvidia, alleging the tech company misrepresented its sales to cryptocurrency miners. The legal battle, which began in 2018, has now reached the highest court in the US. In an amicus brief filed on October 2, US Solicitor General Elizabeth Prelogar and SEC senior lawyer Theodore Weiman argued that the class-action suit had sufficient details to survive a district court’s dismissal. They emphasized that the Supreme Court should allow its revival by an appeals court. The DOJ and SEC highlighted their strong interest in the case, noting that it pertains to laws designed to limit frivolous securities-related lawsuits. They stated that meritorious private actions are essential supplements to criminal prosecutions and civil enforcement actions by the DOJ and SEC. The class group initially sued Nvidia in 2018, claiming the company concealed over $1 billion in GPU sales to crypto miners and that CEO Jensen Huang downplayed the significance of these sales. They argued that Nvidia’s sales were significantly supported by miners, which became evident when the firm’s sales plummeted alongside the crypto market in 2018. Although the case was dismissed, the group appealed, leading to the Ninth Circuit appeals court reviving it last August. Nvidia subsequently petitioned the Supreme Court to reverse this decision. Nvidia contends that the class-action suit relied on an expert opinion that fabricated information about its business and income. However, the DOJ and SEC rebutted this claim, asserting that it was not the case. The agencies also acknowledged the investors’ rebuttal of Nvidia’s claims, which included evidence from ex-Nvidia executives and a Bank of Canada report alleging the firm understated its crypto revenue by $1.35 billion. Nvidia declined to comment on the DOJ and SEC brief. In a separate amicus brief filed the same day, 12 former SEC officials also supported the investors, arguing that private enforcement of federal securities laws is crucial to the integrity of US capital markets. They criticized Nvidia’s arguments, which they claimed would create rules requiring plaintiffs to possess internal company documents and databases before discovery and to preclude the use of experts at the pleading stage. They stated that neither of these requirements is supported by law or good policy. Additionally, six other amicus briefs were filed on October 2, backing the class group, including submissions from quantitative experts, legal professors, institutional investors, the American Association for Justice, and the Anti-Fraud Coalition.