OPINION ANALYSIS

Supreme Court dismisses NVIDIA’s securities fraud appeal

The justices on Wednesday dismissed a dispute over a securities fraud case brought against graphics chip maker NVIDIA. Shareholders argued that NVIDIA did not 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 dismissal was no surprise. The most dominant theme of the argument was repeated comments by justices that the dispute was too fact specific to warrant their attention.

The specific question in the case was whether the complaint in this case was sufficiently specific to make out an allegation of fraud under the high pleading standard for securities fraud actions under the Private Securities Legal Reform Act. Now the case will go back to the trial court to allow the investors to attempt to prove their case against NVIDIA. This is a substantial defeat for NVIDIA, which understandably had good reason to hope the justices would reverse the lower court decision once they agreed to hear the case.