Facebook, Nvidia push SCOTUS to limit “nuisance” investor suits after scandals
The Supreme Court will soon weigh two cases that could potentially make it harder for misled investors to sue Big Tech companies after major scandals.
One case involves one of the largest tech scandals of all time, the Facebook-Cambridge Analytica data breach. In 2019, Facebook agreed to pay "more than $5 billion in civil penalties to settle charges by the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC) that it had misled its users and investors over the privacy and security of user data on its platform," a Supreme Court filing said.
The other case involves an allegation that Nvidia intentionally hid how much of its 2017–2018 GPU demand was due to a volatile cryptocurrency boom and not Nvidia's core gaming business—allegedly misleading investors ahead of a crypto crash. After the bust, Nvidia suddenly had to slash half a billion dollars from its earnings projection, and market experts later estimated that the firm had understated its crypto-related revenue by more than a billion. In 2022, Nvidia paid a $5.5 million SEC penalty over the inadequate disclosures that one SEC chief said "deprived investors of critical information to evaluate the company’s business in a key market."