Nvidia Hit with Crypto Lawsuit From SEC and DOJ

Nvidia has been hit with a combined lawsuit from the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ). According to SEC, Nvidia failed to clearly disclose that crypto mining was a big part of its revenue growth from selling graphics processing units (GPUs).

SEC found that Nvidia broke several rules about disclosing information, which are part of the Securities Act of 1933 and the Securities Exchange Act of 1934. The agency argued that this lack of transparency left investors in the dark about the company’s actual financial health.  However, Nvidia has denied this accusation, saying that its disclosures were accurate and compliant with relevant regulations.

This lawsuit dates back to 2018. Investors said the company downplayed how much it relied on revenue from cryptocy sales, especially when demand for GPUs in the crypto world was high.  Initially, the lawsuit was dismissed by the Ninth Circuit Court of Appeals in 2021 for not having enough evidence. However, a recent split decision in August 2023 revived the case.

On October 2, Solicitor General Elizabeth Prelogar and SEC lawyer Theodore Weiman filed a brief arguing that there’s enough evidence to keep the case going.  Moreover, the involvement of the Department of Justice (DOJ) and the SEC makes the lawsuit stronger. Both agencies have also asked to speak when the Supreme Court hears the case in November.