Supreme Court Agrees To Hear Nvidia Appeal of Crypto Sales Lawsuit

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Key Takeaways

The U.S. Supreme Court on Monday agreed to hear Nvidia’s appeal of a lower court ruling that allowed a class-action lawsuit for shareholders who accused the artificial intelligence (AI) chip maker of securities fraud.

The lawsuit, filed in 2018, accuses the company, its CEO Jensen Huang, and CFO Colette Kress of misleading shareholders about how much of its revenue came from those in the cryptocurrency industry.

A district court judge in San Francisco threw out the case in 2021, but the Ninth Circuit Court of Appeals revived the case last August.

The U.S. Supreme Court on Monday agreed to hear Nvidia’s (NVDA) appeal of a lower court decision allowing a class-action lawsuit for shareholders accusing the artificial intelligence (AI) chip maker of securities fraud.

The case was filed by California investors and led by Sweden-based investment manager E. Ohman J:or Fonder AB.

Lawsuit Tied to Revenue from Nvidia Crypto Miner

The company accuses Chief Executive Officer Jensen Huang and Chief Financial Officer Colette Kress of misleading shareholders about how much of its revenue came from those in the cryptocurrency industry, claiming Nvidia understated its sales of more than $1 billion. to crypto miners.

The lawsuit was filed in 2018, and a district court judge in San Francisco dismissed the case in 2021. But last August, the Ninth Circuit Court of Appeals revived the case, ruling that “Defendants Huang and Kress have sufficiently alleged material misstatement or error in the complaint.” Misleading statements throughout the Class Period led leading investors and analysts to believe that NVIDIA’s crypto-related revenues were much smaller than they actually were.”

Nvidia declined to comment on the Supreme Court’s decision to hear the case when reached by Investopedia on Monday.

Nvidia’s shares rose slightly to $132.11 as of 1 p.m. ET, after reaching an all-time high of $133.73 earlier in the session. They are up more than 160% since the beginning of the year.

Read the original article on Investopedia.