Current:Home > NewsSupreme Court seems likely to allow class action to proceed against tech company Nvidia-LoTradeCoin
Supreme Court seems likely to allow class action to proceed against tech company Nvidia
View Date:2024-12-23 11:09:42
WASHINGTON (AP) — The Supreme Court on Wednesday seemed likely to keep alive a class-action lawsuit accusing Nvidia of misleading investors about its dependence on selling computer chips for the mining of volatile cryptocurrency.
The justices heard arguments in the tech company’s appeal of a lower-court ruling allowing a 2018 suit led by a Swedish investment management firm to continue.
It’s one of two high court cases involving class-action lawsuits against tech companies. Last week, the justices wrestled with whether to shut down a multibillion-dollar class action investors’ lawsuit against Facebook parent Meta stemming from the privacy scandal involving the Cambridge Analytica political consulting firm.
On Wednesday, a majority of the court that included liberal and conservative justices appeared to reject the arguments advanced by Neal Katyal, the lawyer for Santa Clara, California-based Nvidia.
“It’s less and less clear why we took this case and why you should win it,” Justice Elena Kagan said.
The lawsuit followed a dip in the profitability of cryptocurrency, which caused Nvidia’s revenues to fall short of projections and led to a 28% drop in the company’s stock price.
In 2022, Nvidia paid a $5.5 million fine to settle charges by the Securities and Exchange Commission that it failed to disclose that cryptomining was a significant source of revenue growth from the sale of graphics processing units that were produced and marketed for gaming. The company did not admit to any wrongdoing as part of the settlement.
Nvidia has led the artificial intelligence sector to become one of the stock market’s biggest companies, as tech giants continue to spend heavily on the company’s chips and data centers needed to train and operate their AI systems.
That chipmaking dominance has cemented Nvidia’s place as the poster child of the artificial intelligence boom -- what CEO Jensen Huang has dubbed “the next industrial revolution.” Demand for generative AI products that can compose documents, make images and serve as personal assistants has fueled sales of Nvidia’s specialized chips over the last year.
Nvidia is among the most valuable companies in the S&P 500, worth over $3 trillion. The company is set to report its third quarter earnings next week.
In the Supreme Court case, the company is arguing that the investors’ lawsuit should be thrown out because it does not measure up to a 1995 law, the Private Securities Litigation Reform Act, that is intended to bar frivolous complaints.
A district court judge had dismissed the complaint before the federal appeals court in San Francisco ruled that it could go forward. The Biden administration is backing the investors.
A decision is expected by early summer.
___
Associated Press writer Sarah Parvini in Los Angeles contributed to this report
veryGood! (1)
Related
- Denzel Washington Will Star in Black Panther 3 Before Retirement
- Apple iPad 24-Hour Flash Deal: Save 40% on a Product Bundle With Accessories
- NASA restores contact with Voyager 2 spacecraft after mistake led to weeks of silence
- Niger’s junta rulers ask for help from Russian group Wagner as it faces military intervention threat
- Tom Brady Admits He Screwed Up as a Dad to Kids With Bridget Moynahan and Gisele Bündchen
- Colorado fugitive captured in Florida was leading posh lifestyle and flaunting his wealth
- New York Activists Descend on the Hamptons to Protest the Super Rich Fueling the Climate Crisis
- Kagan says Congress has power to regulate Supreme Court: We're not imperial
- A wayward sea turtle wound up in the Netherlands. A rescue brought it thousands of miles back home
- Five Americans who have shined for other countries at 2023 World Cup
Ranking
- Robert F. Kennedy Jr. has a long record of promoting anti-vaccine views
- Climate change threatens Germany's fairy tale forests
- Tim Scott says presidents can't end birthright citizenship for children of undocumented immigrants
- Mexico recovers 2 bodies from the Rio Grande, including 1 found near floating barrier that Texas installed
- Japan to resume V-22 flights after inquiry finds pilot error caused accident
- FDA approves zuranolone, first pill for postpartum depression
- Jake Paul's fight vs. Nate Diaz: Prediction as oddsmakers predict mismatch
- Billie Eilish Pays Tribute to Angus Cloud at Lollapalooza Days After His Death
Recommendation
-
Atlanta man dies in shootout after police chase that also kills police dog
-
11 hurt when school bus carrying YMCA campers crashes in Idaho
-
Rebel Wilson Reveals How She Feels About Having a Second Baby
-
Pope presides over solemn Way of the Cross prayer as Portugal government weighs in on LGBTQ+ protest
-
Driver dies after crashing on hurricane-damaged highway in North Carolina
-
'A war zone': Parkland shooting reenacted at Marjory Stoneman Douglas High School
-
Racist abuse by Mississippi officers reveals a culture of misconduct, residents say
-
Heat and wildfires put southern Europe’s vital tourism earnings at risk