An Nvidia investor class suit alleging the tech company misrepresented its sales to crypto miners should be greenlit, the United States Justice Department and the Securities and Exchange Commission told the Supreme Court.
Nvidia and the class group have been in a back-and-forth legal stoush since 2018, with the battle having reached the top court in the US.
In an Oct. 2 amicus brief, US Solicitor General Elizabeth Prelogar and SEC senior lawyer Theodore Weiman argued the class had “sufficient details” to survive a district court’s dismissal, adding the Supreme Court should greenlight its revival by an appeals court.
The two agencies said they have a “strong interest” in the case because it concerns laws designed to limit frivolous securities-related lawsuits.
“Meritorious private actions are an essential supplement to criminal prosecutions and civil enforcement actions” by the DOJ and SEC, the brief added.
Highlighted excerpt of the DOJ and SEC brief outlining their interest in backing the Nvidia investors. Source: The Supreme Court of the United States
The class group tried to sue Nvidia in 2018, alleging it hid over $1 billion in GPU sales made to crypto miners. It also claimed the chipmaker’s CEO, Jensen Huang, downplayed Nvidia’s large number of sales to the industry.
They also alleged Nvidia’s sales were propped up by miners, which they argue was apparent when the firm’s sales collapsed alongside the crypto market in 2018.
The case was dismissed, but the group appealed the decision — leading to the Ninth Circuit appeals court reviving it last August. Nvidia then petitioned the Supreme Court to reverse it.
Nvidia claims the class suit relied on an expert opinion that fabricated information about its business and income, but the DOJ and SEC have rebutted, saying it “is not what occurred here.”
The agencies also acknowledged the investors’ rebuttal of Nvidia’s claims, which is said to have evidence relating to accounts from ex-Nvidia executives and a Bank of Canada report claiming the firm understated its crypto revenue by $1.35 billion.
Nvidia declined to comment on the DOJ and SEC brief.
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In a separate amicus brief filed the same day, 12 former SEC officials also backed the investors, saying “private enforcement of the federal securities laws is vital to the integrity of US capital markets.”
They attacked Nvidia’s arguments, which they claimed would create rules “requiring plaintiffs to have possession of internal company documents and databases before discovery and to preclude the use of experts at the pleading stage.”
“Neither is supported by the law or good policy,” they said.
Six additional amicus briefs, filed on Oct. 2, supporting the class group. They were from quantitative experts, legal professors, institutional investors, the American Association for Justice and the Anti-Fraud Coalition.
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