Background and previous settlements

In 2022, Nvidia paid a relatively small fine of $5.5 million without substantially contesting the allegations made by the US Securities and Exchange Commission (SEC). The company wanted to put the matter to rest, having previously won a shareholder lawsuit. The difficulty was in proving when, where and how Nvidia knowingly recorded revenue, making it difficult to prove wrongdoing. Although it was incorrect to report GeForce graphics cards purchased for mining under the gaming division, the SEC concluded that the misreporting did not directly harm shareholders after the mining boom ended. As a result, Nvidia received only a minor censure.

In August 2023, another lawsuit was filed with similar allegations: Did Nvidia mislead investors during the crypto boom by understating its profits from mining? This new lawsuit arose after a 2021 case was re-evaluated. Originally, a lawsuit was filed in 2018, which was dismissed in 2021. However, on appeal, it was reinstated as the court found that the plaintiffs had a valid case and arguments.

Potential Supreme Court decision

Nvidia is hoping that the US Supreme Court will dismiss this latest lawsuit before it proceeds any further. Success in the Supreme Court could set a precedent that would make it more difficult to bring such lawsuits in the future. Conversely, defeat could trigger a wave of similar lawsuits against Nvidia and possibly other companies.

Timeline for Supreme Court decision

The US Supreme Court is expected to consider Nvidia's case during its 2024/2025 session, which begins in October 2024. A decision is likely to be issued sometime in 2025.