SEC Fines Nvidia $5.5 Million for Insufficient Crypto Disclosures

silversurfer

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Nvidia will pay $5.5 million to settle charges from the United States Securities and Exchange Commission (SEC) that the company's disclosures regarding the effect of cryptomining on its gaming arm were insufficient.

The SEC order states that Nvidia "failed to disclose... that cryptomining was a significant factor in year-over-year growth in the company's gaming revenue" during consecutive quarters in its 2018 fiscal year. In Forms-10Q for that year, the SEC charges that Nvidia's reports of "material growth" in its gaming business were driven in "significant part" by cryptomining but that the company omitted that fact.

The order alleges that during Q2 and Q3 of 2018, "certain crypto asset prices rose, [and] users of NVIDIA's GPUs were increasingly performing cryptomining."

According to the Commission, the company's actions violated parts of the Securities Act of 1933 and provisions in the Securities Exchange Act of 1934.

"NVIDIA’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market,” Kristina Littman, chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit, said in a press release. "All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate."

An Nvidia spokesperson declined to comment to Tom's Hardware on the matter. According to the SEC, Nvidia agreed to a cease-and-desist order and is paying a $5.5 million fine, but has neither admitted to or denied the SEC's charges.
 

The_King

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For a second there I thought NVIDIA was mining Crypto and never disclose it to the SEC. 🤣

Reading the article makes sense of it, I remember reading another article that Investors were suing NVIDIA for not disclosing that the Crypto boom was largely responsible for their increased GPU sales/revenue and not just gaming.
 
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plat

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This article clarified it a bit for me. That fine is a slap and a joke compared to what NV raked in. Shame on you, NVIDIA. This revelation prob. won't make hardly any dent in demand for its products either.


Nvidia did disclose how cryptocurrency mining was affecting other segments of its business—the company made and sold some GPUs marketed exclusively to cryptocurrency miners. This created an impression that Nvidia was being transparent about the impact of cryptocurrency mining on its overall business, even though those CMP products didn't stop people from buying regular GeForce gaming GPUs to use for cryptocurrency mining.
 

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