Nvidia Faces Lawsuit Over Alleged Misleading Crypto Impact Claims: Supreme Court Decision Explained

Nvidia's Legal Battle Continues

Nvidia must face an investor lawsuit alleging it misled shareholders about the impact of the cryptocurrency market on its sales, following the Supreme Court's dismissal of the company’s appeal. The court stated it had "improvidently granted" Nvidia’s petition, meaning it will continue in the lower courts.

During oral arguments, some justices expressed skepticism about whether the case was more factual than legal, as reported by Reuters.

Background of the Case

The lawsuit originates from a pair of 2018 investor lawsuits claiming Nvidia falsely portrayed how closely its revenue growth was tied to cryptocurrency performance. Investors argue that Nvidia and its executives made materially false statements, downplaying the cryptocurrency market's volatility and exaggerating the company's adaptability.

An appeals court previously allowed some parts of this consolidated case to progress.

In a separate matter in 2022, Nvidia settled with the Securities and Exchange Commission for $5.5 million over allegations that it obscured the link between its success and the volatile cryptocurrency market, without admitting any wrongdoing.

Increased Scrutiny for Nvidia

Nvidia's legal challenges are intensifying as the company experiences significant business success. It is reportedly under antitrust investigations from both Chinese authorities and the US Department of Justice.

Nvidia spokesperson John Rizzo stated, "We would have preferred a decision on the merits affirming the trial court’s dismissal... We remain committed to supporting consistent standards in securities litigation to protect shareholders and ensure a strong economy."