Supreme Court Dodges Decision on Nvidia Securities Fraud Case

The U.S. Supreme Court has decided not to proceed with a securities fraud lawsuit against Nvidia, maintaining the previous court's ruling which permits shareholders to sue. Nvidia is accused of misleading investors about the influence of cryptocurrency sales on its revenue, particularly during 2017-2018.

The U.S. Supreme Court chose not to make a ruling on a potentially precedent-setting securities fraud lawsuit against Nvidia. The suit alleges that the AI chipmaker misled investors about its revenue dependency on the volatile cryptocurrency market. Consequently, an existing lower court decision allowing the lawsuit to proceed remains in effect.

Arguments were previously heard by the justices on November 13, following Nvidia's appeal against the earlier ruling. The Supreme Court dismissed the case without explanation via a succinct one-line order. The central question was whether the plaintiffs met heightened legal standards required under the 1995 Private Securities Litigation Reform Act.

Nvidia, led by CEO Jensen Huang, is accused of downplaying its crypto-revenue in 2017-2018, leading to a significant stock drop in late 2018. Although a federal judge initially dismissed the case, the 9th U.S. Circuit Court of Appeals revived it, prompting support from President Joe Biden's administration for the shareholders.

(With inputs from agencies.)