The DOJ and the SEC claim that they have a “powerful interest” in the case and have argued that the class-action lawsuit should continue.
The United States Justice Department and the Securities and Exchange Commission informed the Supreme Court that an Nvidia investor class-action lawsuit, which alleges that the tech company misrepresented its sales to crypto miners, should be greenlit.
A legal dispute between Nvidia and the investor group has been ongoing since 2018, and it has now reached the highest court in the United States.
US Solicitor General Elizabeth Prelogar and SEC senior lawyer Theodore Weiman wrote in an amicus brief on October 2 that the suit had “sufficient details” to withstand a district court dismissal. They also argued that the Supreme Court should authorize its revival by an appeals court.
The two agencies expressed a “strong interest” in the case due to the fact that it pertains to statutes that are intended to restrict frivolous securities-related lawsuits.
The brief also stated that “meritorious private actions are a critical complement to criminal prosecutions and civil enforcement actions” conducted by the DOJ and SEC.
In 2018, the investor group attempted to file a lawsuit against Nvidia, claiming that the company concealed the sale of over $1 billion in GPUs to crypto miners. It stated that Jensen Huang, the CEO of the chipmaker, had minimized Nvidia’s sales to the industry.
The group contended that Nvidia’s sales were sustained by miners, a fact that was evident when the firm’s sales fell in tandem with the crypto market in 2018.
The group appealed the dismissal of the case, which resulted in the Ninth Circuit appeals court reviving it in August of last year. Nvidia subsequently submitted a petition to the Supreme Court requesting that it overturn the decision.
Nvidia alleged that the suit was based on an expert opinion that fabricated information about its business and income. However, the DOJ and SEC have refuted this claim, stating that it “is not what occurred here.”
The agencies also acknowledged the investors’ rebuttal of Nvidia’s claims, which was purportedly supported by evidence from former Nvidia executives and a Bank of Canada report that claimed the company understated its crypto revenue by $1.35 billion.
On the same day, 12 former SEC officials submitted a distinct amicus brief in support of the investors, stating that “private enforcement of the federal securities laws is vital to the integrity of US capital markets.”
They criticized Nvidia’s arguments, stating that they would establish regulations that would “preclude the use of experts at the pleading stage and require plaintiffs to possess internal company documents and databases before discovery.”
They also stated that “Neither is consistent with sound policy or the law.” The investor group received six additional amicus briefs in support on October 2. They came from people who know a lot about numbers, law teachers, big investors, the American Association for Justice, and the Anti-Fraud Coalition.
Also Read: BlackRock and Fidelity dominate ETFs despite obstacles
Wallets