The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have appealed to the Supreme Court, the highest court in the United States, to allow the continuation of an investor class action lawsuit against NVIDIA, in which the company is accused of financial manipulation related to the sale of video cards for crypto miners.
On October 2, in their document, Deputy U.S. Attorney General Elizabeth Prelogar and SEC Senior Counsel Theodore Wyman statedthat the lawsuit has «enough details» to overcome the previous decision of the district court to close it. They also added that the Supreme Court should authorize its reopening through the court of appeal.
Investors first filed a lawsuit against NVIDIA in 2018, claiming that the company had concealed more than $1 billion in revenue from sales of graphics processing units (GPUs) to cryptocurrency miners. The lawsuit claims that the company’s sales were artificially inflated by miners, which became apparent when NVIDIA’s sales plummeted in 2018 along with the cryptocurrency market.
Although the case was dismissed, in 2021, the U.S. Court of Appeals for the Ninth Circuit in San Francisco reopened it, after which NVIDIA agreed to pay a fine of $5.5 million.
Now, a group of investors has filed an appeal, which has led to the reopening of the case. NVIDIA, in turn, has filed a petition with the Supreme Court to overturn the decision.
In addition, 12 former SEC employees filed a separate document supporting the investors’ lawsuit, emphasizing that «private enforcement of federal securities laws is vital to the transparency of the U.S. capital markets».
Six additional documents in support of investors were filed on October 2. They include — quantitative experts, law professors, institutional investors, the American Association for Justice, and the Coalition Against Fraud.
Surprisingly enough, NVIDIA (NVDA) shares jumped, not the other way around. The reason was that on October 3, the company’s CEO Jensen Huang said that the demand for Blackwell’s next-generation chips was «insane».
«Blackwell’s production is on track,” Huang said. «Everyone wants to have the most and everyone wants to be the first».
NVIDIA shares are up about 170% over the past 12 months and more than 2700% over the past 5 years. Since the beginning of 2024, Nvidia has grown by about 150%.
Also, NVIDIA’s stock price is moving up as the company backed ChatGPT developer OpenAI (MSFT) in its latest funding round, which closed on Wednesday. OpenAI was able to raise an additional $6.6 billion to reach a valuation of $157 billion, which is another «bullish» signal for the AI boom.
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