Current:Home > reviewsSupreme Court seems likely to allow class action to proceed against tech company Nvidia -CapitalWay
Supreme Court seems likely to allow class action to proceed against tech company Nvidia
View
Date:2025-04-26 10:02:08
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! (7)
Related
- Dick Vitale announces he is cancer free: 'Santa Claus came early'
- Queer Eye’s Jonathan Van Ness Shares Update on Self-Care Journey After Discussing Health Struggles
- Drug cartels are sharply increasing use of bomb-dropping drones, Mexican army says
- In 'BS High' and 'Telemarketers,' scamming is a group effort
- All That You Wanted to Know About She’s All That
- Philadelphia Zoo welcomes two orphaned puma cubs rescued from Washington state
- RHOA's Kenya Moore Seemingly Subpoenas Marlo Hampton Mid-Reunion in Shocking Trailer
- Black elementary school students singled out for assemblies about improving low test scores
- Juan Soto to be introduced by Mets at Citi Field after striking record $765 million, 15
- Kansas newspaper co-owner swore at police during raid: You're an a--hole
Ranking
- Rylee Arnold Shares a Long
- As research grows into how to stop gun violence, one city looks to science for help
- 4 arrested in twin newborn Amber Alert case in Michigan; many questions remain unanswered
- Teenager saved from stranded Pakistan cable car describes miracle rescue: Tears were in our eyes
- Buckingham Palace staff under investigation for 'bar brawl'
- Former death row inmate in Mississippi to be resentenced to life with possibility of parole
- Terry Funk, WWE wrestling icon, dies at 79
- Forever 21 stores could offer Shein clothing after fast-fashion retailers strike a deal
Recommendation
How to watch new prequel series 'Dexter: Original Sin': Premiere date, cast, streaming
BTK serial killer Dennis Rader named 'prime suspect' in 2 cold cases in Oklahoma, Missouri
Former death row inmate in Mississippi to be resentenced to life with possibility of parole
Iowa man dies while swimming with son in Alaska's Lake Clark National Park
US appeals court rejects Nasdaq’s diversity rules for company boards
BTK killer's Kansas home searched in connection to unsolved missing persons and murder cases
World Wrestling Entertainment star Bray Wyatt dies at 36
‘Dune: Part 2' release postponed to 2024 as actors strike lingers