Nvidia's Troubles Mount As DOJ, SEC Throw Their Weight Behind Class Action Lawsuit Alleging AI Chip Giant Misrepresented Crypto Revenue
The U.S. Justice Department and the SEC have backed the class action lawsuit against AI chip giant Nvidia Corp. (NASDAQ:NVDA) in the Supreme Court, which accused Nvidia of hiding its cryptocurrency revenue.
What Happened: The DOJ and SEC are advocating for the continuation of the lawsuit, which was brought against the company in 2018, Cointelegraph reported Thursday.
In an amicus brief, U.S. Solicitor General Elizabeth Prelogar and SEC senior lawyer Theodore Weiman argued that the lawsuit had “sufficient details” to survive a district court dismissal, urging the apex court to greenlight its revival by an appeals court.
The DOJ and the SEC didn’t immediately respond to Benzinga’s request for comment.
Why It Matters: This lawsuit has been a significant point of contention since 2017, when Nvidia shareholders filed a lawsuit alleging the company misled investors by classifying revenues from the sale of cryptocurrency mining chips as gaming revenues.
The case was initially dismissed, but the investor group appealed the decision, leading to the Ninth Circuit appeals court reviving it in August last year. Nvidia then petitioned the Supreme Court to reverse it, and the top court agreed to listen to the company’s arguments in June earlier this year.
Price Action: Nvidia shares rose 3.4% on Thursday to close at $122.85, but declined marginally by 0.1% in after-hours trading, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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