Supreme Court rejects NVIDIA’s securities fraud appeal

OPINION ANALYSIS

The court heard arguments in NVIDIA Corp v. E. Ohman J:or Fonder AB on November 13 (Amy Lutz via Shutterstock)

Judges on Wednesday dismissed a dispute over a securities fraud case filed against graphics chip maker NVIDIA. Shareholders argued that NVIDIA failed to disclose the extent to which sales to crypto miners, rather than gaming companies, put their shares at risk. The court heard NVIDIA Corp. v. E. Ohman J:or Fonder AB just last month, but the firing was no surprise. The most dominant theme of the argument was repeated comments by judges that the dispute was too specific to warrant their attention.

The specific issue in the case was whether the complaint in this case was sufficiently specific to state an allegation of fraud under the high pleading standard for securities fraud cases under the Private Securities Litigation Reform Act. Now the case will go back to the trial court to give the investors a chance to try to prove their case against NVIDIA. This is a significant defeat for NVIDIA, which understandably had good reason to hope that the judges would overturn the lower court decision when they agreed to hear the case.