Technology company Nvidia has paid $5.5 Million to settle charges from the US Securities and Exchange Commission that it unlawfully reported sales of its GPUs to cryptocurrency miners as a boost in gaming revenue.
This is according to a report by The Verge following the SEC’s announcement of the settlement, which sees Nvidia agree to stop any unlawful failures to disclose information, but not admit to any wrongdoing.
The charges themselves stem from Nvidia’s 2018 financial reports, in which the company reported a boost in its gaming-related sales, which appeared at the time to be disconnected from the concurrent successes it was having in the cryptocurrency sphere.
Nvidia Pay Settlement for Alleged Concealing of GPU Crypto Sales
The purported misdemeanour claimed by the SEC in its order comes as a result of this alleged misrepresentation, which the order claims hid from investors just how reliant Nvidia’s success was on the more volatile and unproven crypto market.
“NVIDIA’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market,” said Kristina Littman, Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit, in the SEC’s press release.
She also added: “All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate.”
According to the SEC, this issue occurred despite the efforts of Nvidia's investors and analysts to understand more about how much of the company’s gaming business was reliant on cryptocurrency, which had seen an increase in interest throughout 2017.
This is an especially grave accusation when you consider it in the context of the events that followed Nvidia’s 2018 financial reports, with late 2018 seeing a large-scale crypto crash that contributed to Nvidia cutting its Q4 revenue projections by $500 million.
This was followed by a December 2018 class-action lawsuit from shareholders against Nvidia via a Los Angeles law firm, which cited false promises from the company regarding its ability to monitor the crypto market and make changes to its business to match its fluctuations, if necessary.
“When the market learned the truth about NVIDIA, investors suffered damages” concluded the law firm’s press release regarding the lawsuit.
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