The securities and Exchange Commission (SEC) has settled with NVIDIA and fined it $5.5 million for deliberately misleading investors about how the cryptocurrency market affects its sales. The SEC said that NVIDIA did not disclose that its significant growth in revenue and GPU sales was due to increased interest in and demand for cryptocurrencies, rather than the demand of gamers, for several consecutive quarters of fiscal 2018.
In fact, the securities and Exchange Commission said the company classified its encryption mining revenue under its game finance. Therefore, investors do not know that NVIDIA's financial performance is due to an unstable business rather than its traditionally stable game department.
When the cryptocurrency market collapsed at the end of 2018, NVIDIA cut its quarterly sales forecast by $500 million, which obviously had an adverse impact on shareholders and prompted them to file a lawsuit.
NVIDIA has neither accepted nor denied the SEC's findings, but will still pay a fine of $5.5 million, the SEC stressed.
NVIDIA's disclosure error deprived investors of key information to evaluate the company's business in a key market. The securities regulatory law stipulates that all issuers, including those pursuing opportunities involving emerging technologies, must ensure that the information disclosed by them is timely, complete and accurate.
The unstable demand and interest in encryption has led to continuous negative fluctuations in the GPU market, including hardware shortage and increased costs. For consumers, the stability of this field has become the most concerned issue in the past few years.