Nvidia is suspected of concealing cryptocurrency mining income, and the United States supports class action lawsuit

Author: Bingge says the market; Source: FX168

The U.S. Department of Justice and the U.S. Securities and Exchange Commission (SEC) told the Supreme Court that the class action lawsuit against Nvidia, which accuses NVIDIA of misrepresenting its sales to cryptocurrency miners, should be approved. Nvidia and the investor group have been in a legal dispute since 2018, and the case has now been appealed to the U.S. Supreme Court.

In an amicus brief on Wednesday (October 2), U.S. Attorney Elizabeth Prelogar and SEC senior lawyer Theodore Weiman argued that the class action against Nvidia has "sufficient details" to be exempt from the district court's dismissal.

(Source: U.S. Supreme Court)

CoinTelegraph noted that they added that the U.S. Supreme Court should approve the appeals court to reinstate the lawsuit.

The U.S. Department of Justice and the Securities and Exchange Commission said they were "very interested" in the case because it involves laws designed to limit frivolous securities-related lawsuits.

The brief added: "Valuable private litigation is an important supplement to the criminal prosecutions and civil enforcement actions of the U.S. Department of Justice and the Securities and Exchange Commission."

(Source: U.S. Supreme Court)

It is reported that the investor group tried to sue Nvidia in 2018, accusing it of concealing more than $1 billion in GPU sales to cryptocurrency miners. It claimed that the chipmaker's CEO Jensen Huang downplayed Nvidia's sales to the cryptocurrency industry.

The group claimed that Nvidia’s sales were propped up by miners, which they argued was evident in 2018 when the company’s sales collapsed along with the cryptocurrency market.

The case was dismissed, but the group appealed the decision, leading to the Ninth Circuit Court of Appeals resuming the case in August 2023.

Nvidia then appealed to the Supreme Court to overturn the decision.

Nvidia claimed that the lawsuit was based on an expert opinion that fabricated information about its business and revenue, but the DOJ and SEC countered, saying “that’s not what happened here.”

The regulators also admitted an investor rebuttal to Nvidia’s claims, which was allegedly based on evidence related to the accounts of former Nvidia executives and a report from a Canadian bank that claimed the company had understated its cryptocurrency revenue by $1.35 billion.

In another amicus brief filed the same day, 12 former SEC officials supported the investors, saying that "private enforcement of the federal securities laws is essential to the integrity of the U.S. capital markets."

They attacked Nvidia's argument, claiming that it would create a rule "requiring plaintiffs to have access to internal company documents and databases prior to investigation and prohibiting the use of experts during the litigation phase."

They added: "Neither of these is supported by the law or good policy."

On Wednesday, six more amicus briefs supporting the investor groups were filed. These briefs came from quantitative experts, law professors, institutional investors, the American Association for Justice and the Anti-Fraud Coalition.