The U.S. Securities and Exchange Commission has fined Nvidia $5.5 million for failing to properly disclose the impact of crypto mining on the company’s revenue from sales of its gaming GPUs — a failure, according to the company SEC “Withheld important information from investors [needed] to evaluate the company’s business in a key market”.
In announcing the results of its investigation, which specifically relates to Nvidia’s actions in fiscal 2018, the SEC claimed that while the tech company had reported significant revenue growth in its gaming business at the time, it hadn’t shared it with investors that – based on its own information – its gaming sales were driven to a significant extent by cryptomining.
Why is that important? As the SEC puts it, “These significant earnings and cash flow fluctuations were related to a volatile business where investors could determine the likelihood that past performance was indicative of future performance.”
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“Nvidia’s failure to provide disclosures has deprived investors of important information to evaluate the company’s business in a key market,” the press release continued. “All issuers, including those pursuing opportunities related to emerging technologies, must ensure that their disclosures are timely, complete and accurate.”
Ultimately, the SEC’s investigation into the matter found that Nvidia violated the Securities Act of 1993 and the disclosure requirements of the Securities Exchange Act of 1934, resulting in a $5.5 million fine — a sum that the company was ordered to pay company consented “without admitting it” or deny the SEC’s findings”.