SEC, DOJ backstage action against Nvidia over hidden crypto revenue

A class action lawsuit that misled investors about the role of crypto mining in its 2017-2018 earnings, authorities must continue in the US Supreme Court on Tuesday.

U.S. Solicitor General Elizabeth Preloger and SEC Senior Counsel Theodore Weiman said the lawsuit is a list to refile and move forward. Filing.

An amicus brief from the Justice Department and the Securities and Exchange Commission aimed to back up investor allegations that Nvidia is basing its growth on gaming interests, citing how much crypto miners can boost sales.

The Ninth Circuit decided to partially reinstate the lawsuit after the lower court initially denied it. Nevia did not immediately return a request for comment.

The filing cites first-hand accounts from former Nvidia employees. An insider, who goes by the name FE 1, explained how Nvidia maintains a global database to track GeForce GPU sales for crypto miners.

Another insider, FE 2, detailed that CEO Jensen Huang participated in live sales meetings where the impact of crypto on revenues was discussed.

Officials say that Nvidia's leadership was well aware of crypto's impact on sales, but chose to downplay it in public statements.

An expert analysis from economic consulting firm Prism Group found that Nvidia's significant crypto exposure was not used in isolation, but in internal documents, former employee accounts and a significant drop in Nvidia's revenue following the 2018 crypto crash.

The DOJ and SEC say this evidence jointly supports claims that Huang knowingly exposed investors to crypto mining, meeting the “scientist” standard or intending to deceive.

California judge first He was fired The case in 2021, citing insufficient evidence, but the amended complaint was partially revived by the Ninth Court in June.

The lawsuit highlights the need for proper corporate transparency, and the case sets the precedent for how market risks like cryptocurrencies should be disclosed.

Edited by Sebastian Sinclair