U.S. Justice Department and SEC Back Nvidia Investor Class Action

The U.S. Justice Department (DOJ) and the Securities and Exchange Commission (SEC) are lending their support to a class-action lawsuit against Nvidia, alleging that the tech giant misrepresented its sales to cryptocurrency miners.

In an October 2 amicus brief, U.S. Solicitor General Elizabeth Prelogar and SEC senior attorney Theodore Weiman urged the Supreme Court to allow the case to proceed. They argued that the class-action group provided “sufficient details” to warrant the revival of their claims after a district court initially dismissed the lawsuit.

Allegations on Nvidia

The case, which began in 2018, centers around allegations that Nvidia hid over $1 billion in sales of its graphics processing units (GPUs) to crypto miners. The plaintiffs assert that Nvidia’s CEO, Jensen Huang, misrepresented the extent of these sales, which became evident when Nvidia’s revenue plummeted during the 2018 crypto market downturn. The Ninth Circuit Court of Appeals revived the case last August, and Nvidia subsequently petitioned the Supreme Court to reverse that decision.

Nvidia has consistently pushed back against the allegations, claiming that the class-action suit is built on flawed expert opinions and fabricated information about its business.

However, both the DOJ and SEC rejected Nvidia’s claims, stating in their brief that the investors’ arguments are credible and supported by accounts from former Nvidia executives. They also highlighted a report from the Bank of Canada, which alleged that Nvidia had understated its crypto-related revenue by $1.35 billion.

12 Former SEC Official Back Class-Action Group

In a separate amicus brief, 12 former SEC officials backed the class-action group, underscoring the importance of private enforcement of federal securities laws in maintaining the integrity of U.S. capital markets.

They criticized Nvidia’s argument, which they believe would set an unfair precedent, making it harder for plaintiffs to pursue securities claims without access to internal company documents before discovery.

Momentum Builds Against Nvidia

The case has garnered additional backing from six other amicus briefs, including support from legal experts, institutional investors, and anti-fraud coalitions. The collective argument emphasizes the need for transparency and accountability in financial reporting, especially in cases involving rapidly evolving sectors like cryptocurrency.

Nvidia has declined to comment on the latest developments, but with increasing support for the investors, the stakes continue to rise as the Supreme Court considers whether to allow the lawsuit to proceed.