The US Department of Justice and the Securities and Exchange Commission have asked the Supreme Court to approve a class action lawsuit against Nvidia.
The class action accused the tech giant of misleading investors about its sales to cryptocurrency miners.
SEC senior lawyer Theodore Weiman and US Solicitor General Elizabeth Pregolar argued that the lawsuit presented sufficient proof to avoid the district court’s dismissal.
Nvidia’s Sales Allegations Head to the Supreme Court
This class suit claims that Nvidia did not accurately disclose the extent of its sales connected to the booming cryptocurrency market in 2018.
It alleges that Nvidia’s statements on its sales activity downplayed the impact of demand for its GPUs from crypto miners. According to its claims, this may have led to inaccurate expectations for the company’s revenue streams.
These accusations have kept Nvidia in a legal tug-of-war with the class action group. However, a US district court dismissed the case, citing insufficient details to back investor claims. The case has now escalated to the Supreme Court.
In an amicus brief filed on October 2, SEC senior attorney Theodore Weiman and US Solicitor General Elizabeth Prelogar argued that the Nvidia investor lawsuit deserves a fair chance in court.
They emphasized that the case contains “sufficient details” to withstand dismissal by a district court. Therefore, they urged the Supreme Court to allow an appeals court to revive it.
Both agencies underscored their interest in the lawsuit regarding laws preventing frivolous securities-related claims. According to the brief, the DOJ and SEC view “meritorious private actions” as complements to their civil enforcement efforts.
Both agencies’ actions underscored the need for corporate transparency, particularly in the rapidly evolving tech and crypto sectors.
Support Grows for Nvidia Investor Lawsuit: Former SEC Officials and Advocates Rally Together
The investor group initially filed a lawsuit against Nvidia in 2018, alleging that the company concealed over $1 billion in GPU sales to cryptocurrency miners. They claimed that Nvidia’s CEO, Jensen Huang, downplayed the company’s reliance on sales in the crypto mining sector.
The plaintiffs argued that Nvidia’s sales surged because of crypto miners. They believed this when Nvidia’s revenue nose-dived in the crypto market crash in 2018.
The case was dismissed initially, but the group didn’t back down. They appealed the decision, eventually leading the Ninth Circuit Court of Appeals to revisit the suit last August.
However, Nvidia petitioned the Supreme Court to overturn the appeals court’s decision and end the lawsuit.
The DOJ and SEC also acknowledged the investor group’s rebuttal of Nvidia’s defense. It included evidence allegedly backed by former Nvidia executives and a report from the Bank of Canada.
This report suggests that Nvidia may have understated its crypto-related revenue by $1.35 billion. When asked for a response by the DOJ and Sec, Nvidia declined to comment.
However, 12 former SEC officials filed a separate amicus brief on the same day to support the investors. They emphasized the importance of private enforcement in maintaining the integrity of the US Capital markets.
The former SEC officials aimed at Nvidia’s arguments, saying they would impose unreasonable restrictions on plaintiffs. They contended that such rules require investors to have internal company documents and databases in hand even before the discovery phase.
Additionally, they argued that parties should not use expert testimony during the initial stages of litigation, noting that such is against the law.
In solidarity with the investor group, many supporters submitted six additional amicus briefs on October 2. These supporters include quantitative experts, legal professors, institutional investors, the American Association for Justice, and the Anti-Fraud Coalition.
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Rida Fatima Crypto Journalist 
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