Nvidia Fined $5.5 Million For "Inadequate Disclosures" About Cryptomining
PC gaming giant Nvidia has agreed to pay a $5.5 million penalty to settle charges for «inadequate disclosures» regarding cryptomining in the gaming business.
The Securities and Exchange Commission announced that Nvidia violated Section 17(a)(2) and (3) of the Securities Act of 1933 as well as the disclosure provisions of the Securities Exchange Act of 1934. The SEC further found that Nvidia «failed to maintain adequate disclosure controls and procedures,» the government group said in a press release.
Nvidia did not admit to or deny the SEC's charges, but will pay the $5.5 million fine and agreed to a cease-and-desist order.
«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,» the SEC said. «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.»
The SEC said Nvidia disclosed a «material growth» in revenue for its fiscal year 2018 and that it had information that the growth was due in «significant part» to cryptomining. However, the SEC alleges that Nvidia did not disclose this in its regulatory filings, as it should have.
«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 said.
The press release goes on: «The SEC's order also finds that Nvidia's omissions of
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