SEC fined NVIDIA for hiding the role of mining in the revenue structure
The company will pay a recovery of $5,5 million as part of the claims settlement
07.05.2022 - 09:40
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What’s new? The US Securities and Exchange Commission (SEC) has accused the US technology company NVIDIA of hiding information from investors about the role of mining in its revenue structure. According to the regulator’s ruling, the company violated the Securities Act of 1933 and the disclosure provision of the Securities Exchange Act of 1934. Without admitting or denying the SEC’s findings, NVIDIA has agreed to pay a fine of $5,5 million as part of the claims settlement. This is reported in the SEC’s press release.
What else does the document say? During its investigation, the SEC found that during the fiscal year 2018, NVIDIA failed to disclose that cryptocurrency mining was an important element in the company’s revenue growth from the sale of graphics processing units (GPUs) designed and sold for computers games. According to the regulator, in two Forms 10-Qs for the fiscal year 2018, the corporation reported significant revenue growth in its video game business. However, the company had information that sales growth in this area was largely driven by mining.
The SEC believes that by its actions, NVIDIA was misleading investors about the state of the business. Kristina Littman, Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit stressed that all issuers of securities are required to ensure “timely, complete, and accurate” disclosure.
What is known about NVIDIA? It is a US technology company that designs and manufactures graphics processors. NVIDIA Corporation was founded in 1993. Its founders are Jensen Huang, Chris Malachowsky, and Curtis Priem.
What happened before? The SEC’s Crypto Assets and Cyber Unit announced its intention to increase its staff. The agency would hire 20 investigators and litigators to oversee “of unregulated $1,7 trillion cryptocurrency market.” The SEC’s unit analyzes digital asset exchanges and NFT projects.
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