Supreme Court Faces Legal Tug-of-War in Nvidia Securities Fraud Case

The U.S. Supreme Court evaluated Nvidia's appeal to dismiss a securities fraud lawsuit. The case involves Nvidia allegedly misleading investors about its crypto market reliance. Justices are cautious about defining the legal standards needed for private securities fraud suits. A ruling is anticipated by June.

The U.S. Supreme Court took a deep dive into Nvidia's attempt to dismiss a securities fraud lawsuit on Wednesday. The claim accuses the AI chipmaker of misleading investors about its dependence on the volatile cryptocurrency market by underreporting its influence on revenue growth.

The lawsuit, led by Stockholm-based investment management firm E. Ohman J:or Fonder AB, hinges on whether plaintiffs have enough legal grounds under the Private Securities Litigation Reform Act of 1995. This requires claims to surpass high legal thresholds intended to prevent frivolous litigation.

Raised concerns from various justices highlighted ambivalence about defining these standards, amid worries about the technical complexities involved. The lawsuit, involving allegations against Nvidia's CEO, seeks damages for investors who suffered losses during a 2018 stock downturn linked to declining crypto profitability.

(With inputs from agencies.)