SEC backs lawsuit against Nvidia

The SEC and the U.S. Department of Justice are coming up with plans for a lawsuit against Nvidia. The chip manufacturer is accused of misleading investors when selling to cryptominers.

Investors are accusing Nvidia in a class action lawsuit of misrepresenting sales figures to cryptomining companies. The lawsuit is backed by the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC). Since 2018, Nvidia and the plaintiffs have been engaged in a legal battle that has even been fought before the U.S. Supreme Court.

The SEC and DOJ are currently showing "great interest" in the case with respect to relevant securities laws. In a letter dated October 2 lawyers stress that this case revolves around the more stringent requirements for proving misstatement and intent in securities fraud class actions.

According to a report from the Bank of Canada Nvidia earned $1.35 billion more from chip sales to cryptominers in 2018 than reported in their quarterly reports. The chip maker and CEO Jensen Huang are said to have "underexposed", which resulted in large losses for investors when the market collapsed in 2018.

Whether the support of the DOJ and SEC will be enough to find Nvidia guilty of securities fraud remains to be seen.