The US Department of Justice and the Securities and Exchange Commission (SEC) have urged the Supreme Court to approve the investor class action lawsuit accusing NVIDIA of making false statements about its sales to cryptocurrency miners. NVIDIA has been in legal disputes with the investor group since 2018, and the case has now been appealed to the Supreme Court.
In a friend-of-the-court brief filed on Wednesday, October 2nd, US Attorney General Elizabeth Prelogar and SEC Senior Counsel Theodore Weiman argued that the class action against NVIDIA has “sufficient detail” to survive dismissal by the district court.
CoinTelegraph noted that they also argued that the Supreme Court should approve the appellate court’s decision to reinstate the lawsuit.
The DOJ and SEC stated that they are “very interested” in this case as it involves laws aimed at curbing frivolous securities-related litigation.
The brief further added, “Valuable private litigation is an important supplement to the criminal and civil enforcement actions of the DOJ and SEC.”
According to reports, the investor group attempted to sue NVIDIA in 2018, alleging that the company concealed over $1 billion in GPU sales to cryptocurrency miners. They claimed that NVIDIA’s CEO, Jensen Huang, downplayed the company’s sales to the crypto industry.
The organization argued that NVIDIA’s sales were supported by miners, and this became apparent when the company’s sales declined along with the crypto market in 2018.
The case was dismissed, but the group appealed the ruling, leading to the Ninth Circuit Court of Appeals reinstating the case in August 2023.
Subsequently, NVIDIA appealed to the Supreme Court to overturn the ruling.
NVIDIA claims that the lawsuit is based on expert opinions that fabricated information about its business and revenue, but the DOJ and SEC refute this, stating that “that’s not what happened here.”
The regulatory agencies also acknowledge the investors’ counterarguments against NVIDIA, citing evidence related to former NVIDIA executive accounts and a report from a Canadian bank that claimed the company underestimated its cryptocurrency revenue by $1.35 billion.
In another friend-of-the-court brief filed on the same day, twelve former SEC officials supported the investors, stating that “private enforcement of federal securities laws is critical to the integrity of the US capital markets.”
They criticized NVIDIA’s argument, claiming that it would set a rule “requiring plaintiffs to acquire internal company documents and databases before discovery and prohibit the use of experts at the litigation stage.”
They added, “Neither of these has legal or sound policy support.”
On Wednesday, six additional friend-of-the-court briefs supporting the investor group were submitted. These briefs came from quantitative experts, law professors, institutional investors, the American Justice Association, and the Anti-Fraud Alliance.
