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NVIDIA Wins Lawsuit Against Investors Accusing it of Hiding Profits From the Mining Boom

NVIDIA managed to win a lawsuit against investors claiming that the company benefited massively from the previous mining boom and then obscured the resulting profits instead of declaring them. This case had been ongoing since 2018, right around the time NVIDIA’s revenue started reaching new heights thanks to the sale of graphics cards to cryptominers.

According to Californian District Judge Haywood Gilliam, who handled the case:

The prosecution did not prove that the company acted with willful irresponsibility in the decision not to disclose income information. Plaintiffs must cite facts that reflect some degree of willful or knowing wrong,” the ruling says. The court also found insolvent the applicant’s arguments about the company’s violations of securities laws.

The class-action lawsuit was originally filed by Ironworkers Local 580 Joint Fund in late 2017. According to the details provided by the firm, NVIDIA earned $1.73 billion from the sales of graphics cards to miners in 2017 and 18 but declared a notably lower revenue at its various earnings reports during the period.

Further accusing the company of misleading investors and shareholders, the opposition claimed that NVIDIA concealed its growing dependence on the cryptocurrency market. One of the primary arguments was the sudden drop in the company’s stock after the crypto bubble ended which was dubbed as the crypto-hangover.

In the initial stages of the trial, the court pointed out the lack of evidence on the part of the prosecution and proposed to make changes that would clearly indicate NVIDIA’s guilt. The investors then leveraged the services of the Prysm Group’s economists, according to whom NVIDIA deliberately attributed $ 1.126 billion of the $ 1.73 billion of earned funds to the gaming sector in its financial statements.

NVIDIA’s defended itself by saying that the figures put forward by the economists were mere assumptions and therefore, unfounded. The reason being that there’s no way to establish how many graphics cards and mining machines were purchased by miners.

In the final part of the trial, a secret witness was brought to court. Unfortunately for the investors, the said witness ended up saying that some of the statements attributed to him were false, resulting in a favorable ruling for NVIDIA.

Areej

Computer Engineering dropout (3 years), writer, journalist, and amateur poet. I started Techquila while in college to address my hardware passion. Although largely successful, it suffered from many internal weaknesses. Left and now working on Hardware Times, a site purely dedicated to.Processor architectures and in-depth benchmarks. That's what we do here at Hardware Times!

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