Attorneys representing technology company Nvidia recently argued that the ongoing court proceeding does not entitle its investors to access the company’s internal records related to the “crypto craze” of 2017 and 2018, Law360 reported.
Nvidia faces a class-action lawsuit alleging that it misled investors about how much its revenue relied on block reward miners purchasing its graphics processing units during the 2017 bull run.
The plaintiffs claim that after launching its GPU dedicated to digital currencies in May 2017 i.e., the Crypto SKU, Nvidia solely attributed the sales of the SKU to miners to demand from block reward miners. Plaintiffs calculate block reward miners purchased $ 1 billion worth of the Nvidia’s popular GeForce GPU sales, which Nvidia claimed were purchased by video gamers in 2017.
The suit also alleges that Nvidia gave “false and misleading public statements concerning the company’s internal controls, prospects, and earnings.” The claim further levies charges that Nvidia simultaneously sold $147 million worth of its shares “at artificially inflated prices.”
After the digital currency bubble popped and demand from block reward miners dried up, Nvidia struggled to offload its GPU inventories and saw a 30% drop in its stock price by the end of 2018.
During a court appearance on Sept 17 in the United States’ Delaware Court of Chancery, Nvidia’s representative counsel argued that the plaintiffs in the case have failed to show a “credible basis” for why Nvidia should be forced to hand over the requested documents.
Per blockchain site Cointelegraph, Patrick Gibbs of Cooley LLP criticized the plaintiffs’ choice to “rest on a paper record” at trial without offering live testimony to their purpose for demanding that Nvidia offer up its internal documents. Gibbs also argued that the evidence presented proves that the investors behind the suit currently own stock in Nvidia and thus maintain an interest in the case.
The court instructed both parties to submit post-trial briefings, addressing Nvidia’s reasons for not handing over its internal records.