Nvidia dealt blow as top court opens door for shareholder suit

The US Supreme Court dismissed an appeal by Nvidia, leaving it to face a lawsuit that accuses the company of misleading shareholders about its reliance on crypto-mining revenue in the run-up to a market crash. The dismissal came four weeks after several justices questioned whether the case presented the type of broad legal issue that would warrant a Supreme Court ruling. Nvidia, the world's most valuable company, contended the shareholders' lawsuit lacked enough specificity to go forward to the evidence-gathering stage of litigation.

"I'm not actually sure what rule we could articulate that would be clearer than our cases already say," Justice Sonia Sotomayor said during the Nov. 13 argument. As is its usual practice, the court didn't provide any explanation for dropping the case, saying only that it was being "dismissed as improvidently granted."

It's the second securities-fraud case the justices have scrapped in a term that is only two months old. The court last month dismissed an appeal by Meta Platforms, leaving it to face accusations of misleading shareholders about the data-harvesting scandal involving political consulting firm Cambridge Analytica.


A ruling favoring Nvidia might have helped other companies win early dismissal of shareholder suits and avoid the expense of mounting a full-scale defense. The case centered on the protections Congress gave companies in the 1995 Private Securities Litigation Reform Act, which requires lawsuits to make key allegations "with particularity."