The company has not provided enough information to its shareholders, the SEC (Securities and Exchange Commission of the USA) confirmed today. NVIDIA will pay a fine of 5.5 million dollars because the company did not disclose the impact of cryptocurrencies on graphics card sales for gamers in 2018.
For multiple consecutive quarters of NVIDIA’s fiscal year 2018, the company did not tell its shareholders how many of the gaming cards were sold to the cryptocurrency market. Due to the volatility of this market, this could have led investors to uncertainty and, as a result, to poor investments.
“Nvidia’s disclosure failures deprived investors of information critical to evaluating the company’s business in a key market. “Investors, including those seeking opportunities involving emerging technologies, should ensure that disclosures of information are timely, complete and accurate,” said Kristina Littman, Chief of the SEC’s Division of Enforcement’s Cyber and Cyber Assets Unit. .
NVIDIA did not admit or deny all this and decided to pay the million dollar fine.
To give you an idea, in the second mining wave, by 2020, it was announced that Nvidia would have generated 175 million dollars selling GeForce RTX graphics to the mining industry.
The SEC said:
The Securities and Exchange Commission (SEC) today announced settled charges against technology company Nvidia Corporation for improper disclosure about the impact of crypto mining on the company’s gaming business.
The SEC order finds that for consecutive quarters in Nvidia’s fiscal year 2018, the company failed to disclose that crypto mining was a significant element of its material revenue growth from the sale of GPUs designed and marketed for gaming. Crypto mining is the process of earning crypto rewards in exchange for verifying crypto transactions against distributed ledgers. As the demand for and interest in cryptocurrencies increased in 2017, Nvidia customers increasingly used their gaming GPUs for crypto mining.
In two of its Form 10-Qs for its fiscal year 2018, Nvidia reported material revenue growth within its gaming business. However, Nvidia had information that this increase in game sales was driven in significant part by crypto mining. Despite this, Nvidia failed to disclose on its Forms 10-Q, as it was required to do, these significant fluctuations in earnings and cash flows related to a volatile business for investors to determine the likelihood that past performance is indicative of future performance. future performance.
The SEC order also finds that Nvidia’s omissions of material information about the growth of its gaming business were misleading, given that Nvidia did make statements about how other parts of the company’s business were driven by demand for crypto, creating the impression that the company’s gaming business was not significantly affected by crypto mining.
“Nvidia’s disclosure failures deprived investors of information critical to evaluating the company’s business in a key market,” said Kristina Littman, Chief of the Crypto Assets and Cyber Unit of the SEC’s Enforcement Division. “All issuers, including those pursuing opportunities involving emerging technology, must ensure that their disclosures are timely, complete and accurate.”
Nvidia agreed to a cease and desist order and a $5.5 million fine.
The SEC order finds that Nvidia violated Section 17(a)(2) and (3) of the Securities Act of 1933 and the disclosure provisions of the Securities Exchange Act of 1934. The order also finds that Nvidia did not maintain adequate disclosure controls and procedures. Without admitting or denying the SEC’s findings, Nvidia agreed to a cease and desist order and a $5.5 million fine.
The SEC investigation was conducted by Brent Wilner of the Cyber Assets and Crypto Unit and supervised by Diana Tani and Ms. Littman of the Cyber Assets and Crypto Unit.
Source: Videocardz
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