The class action lawsuit against Nvidia, accusing the company of distorting financial results from graphics card sales to cryptocurrency miners, is set to proceed. This was stated to the US Supreme Court by the Department of Justice and the SEC in a filing.
The legal battle has been ongoing since 2018, reaching the highest judicial level.
According to US Solicitor General Elizabeth Prelogar and senior SEC attorney Theodore Weiman, the complaint contains “sufficient details” for its revival after being dismissed by a district court.
Both agencies highlighted their “strong interest” in the case, noting that “well-founded private lawsuits are a significant complement to criminal prosecutions and administrative enforcement actions,” as stated in the documents.
The group of investors who filed the lawsuit claims that Nvidia earned approximately $1.73 billion from selling equipment to miners during 2017-2018, of which $1.126 billion was deliberately classified under the gaming segment. This allegedly concealed the company’s growing reliance on the cryptocurrency market.
The 2018 cryptocurrency market crash adversely affected the company’s stock value.
Nvidia argues that the lawsuit is based on an expert opinion that falsified information about its business and revenues. The DOJ and SEC find the evidence compelling, citing a Royal Bank of Canada report indicating the company understated its revenue from miner sales by $1.35 billion.
Nvidia’s stock, which has been rising recently amid a boom in the AI sector, did not react to the latest development in the dispute with investors.
In June, the chipmaker briefly became the most valuable public company in the world.
At the time of writing, with a market capitalization of $3.01 trillion, the firm trails only Apple ($3.4 trillion) and Microsoft ($3.1 trillion).
Earlier, analysts from Elliott Management suggested that Nvidia is “in a bubble,” and AI technology is “overvalued.”