The U.S. Supreme Court is about to rule on two cases brought by Nvidia and Meta (Facebook) to avoid legal action for securities fraud. The U.S. Supreme Court will hear arguments on Nov. 13 in Nvidia's attempt to dismiss a securities class action lawsuit.
Swedish investment firm E. Ohman J:or Fonder AB claims that Nvidia misled investors by underestimating its revenue dependence on cryptocurrency mining in 2017-2018. Nvidia's position is that the plaintiffs did not meet the standards set forth in the Private Securities Litigation Reform Act of 1995 (Private Securities Litigation Reform Act).
Earlier this year, Nvidia reached a settlement with U.S. regulators, paying $5.5 million to resolve allegations of inadequate reporting on the impact of cryptocurrency mining on its gaming unit.
The Supreme Court will also rule on a securities lawsuit brought by Facebook to dismiss, accusing investors led by Amalgamated Bank that the company deceived them by failing to disclose a 2015 data breach involving Cambridge Analytica that affected more than 30 million users.
The case came to attention after Facebook's stock price plummeted over reports that Cambridge Analytica misused user data during the 2016 Trump campaign. Facebook insists it is under no obligation to disclose past breaches in risk statements because those statements are supposed to be forward-looking. Previously, the company had paid a $100 million fine to the U.S. Securities and Exchange Commission (SEC) and a $5 billion fine to the U.S. Federal Trade Commission (FTC) for the same issue.
Most recently, three Supreme Court rulings in June weakened the role of federal regulators, the Securities and Exchange Commission, the primary watchdog of securities fraud, appearing to place more limits on the power of private plaintiffs to enforce federal rules enacted against corporate misconduct.