Supreme Court Weighs Nvidia's Securities Fraud Case with Crypto Twist

The U.S. Supreme Court is evaluating a securities fraud lawsuit against Nvidia, centered on allegations that the company misled investors about its reliance on the volatile cryptocurrency market. The case questions whether plaintiffs met the stringent requirements of the 1995 Private Securities Litigation Reform Act.

The U.S. Supreme Court examined Nvidia's attempt to dismiss a securities fraud lawsuit accusing the AI chipmaker of misleading investors regarding its dependence on the cryptocurrency market. Nvidia is appealing a lower court decision that allowed the 2018 class action to proceed, backed by Sweden-based E. Ohman J:or Fonder AB.

This is one of two cases that the Supreme Court is reviewing this month, potentially making it more challenging for private parties to pursue securities fraud claims. At the heart of the Nvidia lawsuit is whether plaintiffs met the heightened legal requirements set by the 1995 Private Securities Litigation Reform Act.

Arguments were presented on both sides, with Conservative Chief Justice John Roberts seeking a middle ground. The lawsuit also accuses Nvidia and CEO Jensen Huang of misrepresenting revenue growth from cryptomining operations. Nvidia settled similar charges with regulators in 2022, paying $5.5 million without admitting fault.

(With inputs from agencies.)