A long-running legal dispute raised against Nvidia over $1 billion in sales of block reward mining hardware has been resolved in the company’s favor, bringing an end to the three-year court battle.
A California district judge ruled in favor of the GPU manufacturer in the case, finding that Nvidia did not mislead investors as alleged over the nature of demand for its GPU products.
The case alleged Nvidia had misrepresented the demand for its products from gamers to the tune of $1 billion, when the demand had in fact arisen as a result of a surge in block reward mining activity, spurred on by the bull run of 2017-18.
Nvidia asked the judge to dismiss the claims on the basis that the plaintiffs were unable to demonstrate the firm had acted in “conscious recklessness” when failing to disclose the true breakdown of its sales.
The lead plaintiff in the case is the Ironworkers Local 580 Joint Fund, which had invested heavily in Nvidia stock on behalf of an employee benefit scheme. The fund also claimed to be acting in the case “on behalf of all others” who had invested in Nvidia over the relevant period from May 10, 2017 to November 14, 2018.
Ruling that “it is not sufficient to allege that gaming was Defendants’ core business,” Judge Gilliam dismissed the case outright, including subsequent claims about breaches of securities law.
“To show that any lack of awareness must have been reckless, Plaintiffs must allege facts that reflect some degree of intentional or conscious misconduct.”
Nvidia was a beneficiary of the bull-run in 2017, which sent the company’s value soaring into the first half of 2018. However, coinciding with the turn in digital currency markets, demand for its core products fell significantly, leading to a 30% fall in the price of its shares.
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