Supreme Court dismisses Nvidia’s appeal in securities lawsuit

The Supreme Court on Wednesday dismissed an appeal from Nvidia in a securities lawsuit against the chipmaking giant, allowing the case to move forward.

The court dismissed the appeal as “improvidently granted” in an unsigned, one-sentence opinion without explanation.

It marks the second time the court has done so in recent weeks; the justices last month similarly dismissed Facebook’s appeal in a securities lawsuit against the company.

Nvidia’s suit, brought by Swedish investment firm Ohman J:or Fonder, centers on allegations that company executives, including CEO Jensen Huang, misled investors about the extent its sales depended on volatile cryptocurrency miners.

Nvidia argued the investment firm did not meet the legal bar set by the Private Securities Litigation Reform Act, a federal law created in 1995 to prevent frivolous securities litigation.

During oral arguments last month, some of the justices appeared to have second thoughts about the high court’s involvement in the legal matter. Some suggested to Nvidia’s counsel the case might not require a blanket rule to make it more difficult for securities fraud claims to be brought forward.

“I'm not actually sure what rule we could articulate that would be clearer than our cases already say,” Justice Sonia Sotomayor said near the start of the argument.

“It’s less and less clear why we took this case and why you should win it,” Justice Elena Kagan said at another point during arguments.

The Supreme Court agreed in June to take up Nvidia’s arguments after the 9th U.S. Circuit Court of Appeals reversed a ruling dismissing the lawsuit.

By dropping the chipmaker’s appeal, the Supreme Court’s opinion enables the lawsuit to move forward. The case has not yet reached trial.

The allegations date back to 2018, after the company announced it missed revenue projections in the previous quarter and anticipated a year-to-year decline in its total revenues for the following quarter. The company’s stock price fell by 28.5 percent over the two trading days following the announcement.

Nvidia sells graphic processing units (GPUs), which are often used for video games but can also be used in mining of cryptocurrency. The digital currencies market is very volatile, often leading to fluctuation in demand for the GPUs.

The Hill reached out to Nvidia along with the Swedish investment firm, as well as both of their legal teams, for comment.

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