Two prominent US regulators are backing a class action lawsuit against tech giant Nvidia over sales to crypto miners that were allegedly misrepresented.
According to recent court filings, the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) are filing amicus briefs in support of the group of investors suing Nvidia, a lawsuit that began in 2018 and has since reached the Supreme Court. Court.
In the amicus briefs, the regulators say they are interested in the case because it relates to laws that strengthen their enforcement actions in securities lawsuits.
“This case concerns the increased requirements for pleading falsehood and scientific knowledge in private securities fraud class actions under the Private Securities Litigation Reform Act of 1995 (PSLRA).
Meritorious private actions are an essential complement to criminal prosecutions and civil enforcement actions brought by the Department of Justice and the Securities and Exchange Commission.”
The class action lawsuit alleges that Nvidia hid more than $1 billion in graphics processing unit (GPU) sales from crypto miners, a tool essential to their business model and usually associated with PC gaming. However, the case was dismissed until an appeals court heard the case in 2023.
In 2022, the SEC fined Nvidia for “inadequate disclosures” for failing to accurately report how many of their GPU sales during the 2018 fiscal year were related to crypto mining.
“The SEC’s order finds that for consecutive quarters in NVIDIA’s 2018 fiscal year, the company failed to disclose that crypto mining was a significant component of material revenue growth from sales of its graphics processing units (GPUs) designed and operated on are marketed for gaming…
In two [tax forms] for fiscal year 2018, NVIDIA reported material revenue growth within its gaming business. However, NVIDIA had information that this increase in game sales was largely driven by crypto mining.”
At the time, Nvidia agreed to a cease and desist order and to pay a $5.5 million fine.
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