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An American global chipmaker lost its bid to stop a 2018 class action lawsuit against it after the higher court dismissed its appeal. Nvidia lost its legal battle to dismiss a cryptocurrency fraud case filed by shareholders after the US Supreme Court ruled that it would no longer entertain the appeal of the chipmaker.
Appeal Denied
The US Supreme Court announced that it will no longer entertain the appeal sought by American chipmaker Nvidia regarding its securities fraud lawsuit.
Consequently, the Supreme Court kept the earlier ruling of a lower court that permits the 2018 class action lawsuit to proceed.
Nvidia appealed to the high tribunal to hear its side and avoid the cryptocurrency fraud case that was filed against it in 2018.
Reports said that the chipmaker’s shareholders sued the company for misleading investors, saying that Nvidia was not transparent on how much of its sales relied on the volatility of the crypto market.
Lawsuit To Move Forward
Reports said that the lower court’s decision will stand after the US Supreme Court did not grant Nvidia’s appeal, which means the chipmaker has to face the lawsuit.
The US Supreme Court said that the justices of the high court heard the arguments about the case. The court magistrates decided not to make a ruling regarding the underlying legal dispute in which the chip manufacturer is involved.
The high tribunal tossed out the appeal of Nvidia regarding the ruling of a lower court, resulting in the 2018 charges moving forward; a scenario Nvidia is trying to avoid but with the court’s decision, it seems the US chip company has no choice.
The high court revealed that during the deliberation, several magistrates had reservations about the necessity of a US Supreme Court intervention in this case, pondering on whether there was a clear legal issue for the justices to decide, as against disputing only over facts.
The justices said they were not ideally placed to resolve the Nvidia case because of its technical complexities.
Accused Of Fraud
The American chip manufacturer became popular in 2018 for crypto mining. In the same year, Nvidia’s shareholders charged the company for violating the Securities Exchange Act of 1934, claiming that the chipmaker falsely downplayed the portion of its revenue growth that can be attributed to crypto-related activities in 2017 and 2018.
The shareholders argued that by omitting this essential information, Nvidia deceived investors and analysts assessing the effects of crypto mining on Nvidia’s business.
In 2021, a US federal judge dismissed the lawsuit in favor of Nvidia; however, the 9th US Circuit Court of Appeals turned over the decision and revived the fraud charges.
Featured image from Morningstar, chart from TradingView
