The financial regulator has accused the company of misleading the investors, which could impact its crypto business.
GPU and Software manufacturing giant company NVIDIA was accused by the Securities and Exchange Commission that the company failed to disclose the extent to which its crypto mining machinery sales impacted its business; in a nutshell, the company has failed to tell how much its business got impacted due to its crypto mining sales. The company agreed to pay the penalties for the allegations worth $5.5 million.
NVIDIA is a very popular and famous name in the semiconductor manufacturing space. It had settled down with the financial regulator over the charges that its reporting could harm or mislead investors. The semiconductor giant has settled on the accusation of the commission regarding the failure to disclose how its gaming business is getting impacted by its sales of crypto mining hardware. The SEC announced that NVIDIA would have to pay $5.5 million as a fine.
These charges belong to the allegation from way back in 2018 on NVIDIA when the company failed to report that the specific part of its revenue growth came from sales of crypto mining machinery to its gaming business, which is crucial to disclose to keep an eye on the volatility of the industry. On top of that, since the company had also mentioned that crypto acted as a driving force for other aspects of its business, it misled the investors continuously into thinking that there was no impact of crypto on its gaming business, as the SEC found in its investigation.
More specifically, the SEC argued that the NVIDIA had violated a section that belongs to the Securities Act of 1933 and the disclosure provisions present in the Securities Exchange Act of 1934. On top of that, the commission’s order accused the semiconductor manufacturer of neglecting the responsibility of maintaining the proper disclosure control and following adequate procedures.
However, NVIDIA has neither confirmed nor denied the findings of the SEC even though it agreed to pay a penalty of $5.5 million and cease-and-desist order. The head of the Enforcement Division of the SEC’s crypto assets and the cyber unit, Kristina Littman, said that the disclosure failure of NVIDIA distressed the investors from crucial information for evaluating the business of the company in the key market. Littman also said that all issuers must ensure the disclosure’s timing, completion, and accuracy.
Source: https://www.thecoinrepublic.com/2022/05/07/how-did-nvidia-settle-down-the-crypto-mining-disclosure-charges-of-the-sec/