Court Ruling and Legal Process On December 11, the Supreme Court issued a brief order, rejecting Nvidia’s appeal without providing a reason. This decision upheld the Ninth Circuit’s ruling, which reversed a lower court decision from March 2021 that had initially dismissed the case.

Nvidia was aiming to overturn the Ninth Circuit Court of Appeals ruling from August 2023, which revived a lawsuit filed by Nvidia shareholders in 2018. The lawsuit claims that Nvidia hid over $1 billion in GPU sales to crypto miners and that CEO Jensen Huang downplayed the volume of these sales.

A spokesperson for Nvidia told:  “We would have preferred a decision affirming the trial court’s dismissal of the case, but we are fully prepared to continue our defense. Consistent and predictable standards in securities litigation are essential to protecting shareholders and ensuring a strong economy, and we remain committed to supporting them.”

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Shareholder Claims and Evidence The lawsuit argues that a significant portion of Nvidia’s GPU sales was driven by sales to crypto miners. It points to the decline in sales at the end of 2018, when the crypto market collapsed, causing Nvidia’s stock price to drop nearly 30% in just two days.

In October, the Department of Justice and the Securities and Exchange Commission (SEC) supported the case, stating that Nvidia’s argument was based on false information. The agencies highlighted the shareholders’ case, which includes evidence such as statements from former Nvidia executives and a Bank of Canada report alleging that Nvidia understated its cryptocurrency revenue by $1.35 billion.

Nvidia’s Previous SEC Payment In 2022, Nvidia paid $5.5 million to the SEC to settle charges related to its insufficient disclosure of the impact of crypto mining on its gaming business. The company neither admitted nor denied the SEC’s findings, but this payment raised concerns about Nvidia’s past transparency issues.

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