Nvidia Shareholder Brings A New Crypto Market-Based Lawsuit Against Corporate Officers Of Nvidia
In a new article released by The Block, they inform that an Nvidia shareholder has brought a new lawsuit against corporate officers of the company. According to this lawsuit, Individual Defendants made the Company make false statements related to how the company would handle volatility in the crypto market.
As per the report, most of the lawsuits in the cryptocurrency space are related to companies that tried to conduct an Initial Coin Offering (ICO) and that had some problems in the process. The same happened with companies that had already launched ICOs and tokens to the market. This lawsuit is against corporate officers.
Yuju Yang is the person that is suing the directors of the company for violating their duties to the company. Yang explains that these corporate officers of Nvidia did not manage the company as they should.
The firm entered the cryptocurrency market because it created graphics processing units (GPUs). These devices could be used to mine virtual currencies as well. Another company involved in the same market as Nvidia is AMD.
As per The Block, there is something that is called “the business judgment rule.” About it, they wrote:
“Judges don’t want to spend time second-guessing decisions made by businesses that are, well, business decisions. Put another way, in lawsuits against corporate officers that the court will assume that the officers acted in the best interest of the corporate officers of Nvidia alleging that they violated their duties and cost the company money in an egregious manner.”
Apparently, the officers will be responding that they did not violate their duties and that they were making informed decisions in the best interest of the company.
The Defendants made Nvidia make false statements in which they informed that the firm was able to withstand cryptocurrency volatility through their computer gaming customer demand. Moreover, these officers were also selling their shares in the firm during the boom in the stock price that was driven by the sales related to the virtual currency market.
The officers ended up forcing the company to buy shares at inflated prices, which they knew they were high. It will be interesting to see how the Defendants will answer to this lawsuit and what they will say about these accusations.