Sunday, May 8th 2022
NVIDIA Pays $5.5 Million Fine After Failing To Disclose 2018 Crypto Revenue
The Securities and Exchange Commission today announced settled charges against technology company NVIDIA Corporation for inadequate disclosures concerning the impact of cryptomining on the company's gaming business. The SEC's order finds that, during consecutive quarters in NVIDIA's fiscal year 2018, the company failed to disclose that cryptomining was a significant element of its material revenue growth from the sale of its graphics processing units (GPUs) designed and marketed for gaming. Cryptomining is the process of obtaining crypto rewards in exchange for verifying crypto transactions on distributed ledgers. As demand for and interest in crypto rose in 2017, NVIDIA customers increasingly used its gaming GPUs for cryptomining.
In two of its Forms 10-Q for its fiscal year 2018, NVIDIA reported material growth in revenue within its gaming business. NVIDIA had information, however, that this increase in gaming sales was driven in significant part by cryptomining. Despite this, NVIDIA did not disclose in its Forms 10-Q, as it was required to do, these significant earnings and cash flow fluctuations related to a volatile business for investors to ascertain the likelihood that past performance was indicative of future performance. The SEC's 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 cryptomining.
"NVIDIA's disclosure failures deprived investors of critical information to evaluate the company's business in a key market," said Kristina Littman, Chief of the SEC Enforcement Division's Crypto Assets and Cyber Unit. "All issuers, including those that pursue opportunities involving emerging technology, must ensure that their disclosures are timely, complete, and accurate."
The SEC's 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 failed to maintain adequate disclosure controls and procedures. Without admitting or denying the SEC's findings, NVIDIA agreed to a cease-and-desist order and to pay a $5.5 million penalty.
The SEC's investigation was conducted by Brent Wilner of the Crypto Assets and Cyber Unit, and supervised by Diana Tani and Ms. Littman of the Crypto Assets and Cyber Unit.
Source:
SEC
In two of its Forms 10-Q for its fiscal year 2018, NVIDIA reported material growth in revenue within its gaming business. NVIDIA had information, however, that this increase in gaming sales was driven in significant part by cryptomining. Despite this, NVIDIA did not disclose in its Forms 10-Q, as it was required to do, these significant earnings and cash flow fluctuations related to a volatile business for investors to ascertain the likelihood that past performance was indicative of future performance. The SEC's 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 cryptomining.
The SEC's 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 failed to maintain adequate disclosure controls and procedures. Without admitting or denying the SEC's findings, NVIDIA agreed to a cease-and-desist order and to pay a $5.5 million penalty.
The SEC's investigation was conducted by Brent Wilner of the Crypto Assets and Cyber Unit, and supervised by Diana Tani and Ms. Littman of the Crypto Assets and Cyber Unit.
40 Comments on NVIDIA Pays $5.5 Million Fine After Failing To Disclose 2018 Crypto Revenue
taxes were paid on the sales profit, hopefully.
and 5.5 million is actually not much. but it's a start. next time, just add 2 zeros and it will come across as meant.
basically, everyone can do what he thinks is right with his graphics card. that's why it will probably be a little low.
edit: never heard of them, but seems they delay orders from customers while making money on their investments, report incorrect on trades (to avoid taxes i guess), and hire people from the agencies that regulate them :-) , among other tricks.... they was also invoolved in the GameStop thing. A fine collection of not so honest individuals
I dont see where it say which 2 quarters, or 1h or 2h. Someone even suggested that Nvidia was selling cards directly to miners in am older thread.'Shit a Dell' is graffiti on a wall.
I still remember arguing with people on here that refused to believe what they did was in fact misleading and potentially illegal.