Chip Maker Nvidia to Pay $5.5M to Settle SEC Case

    Photo: AP Photo [via Al Jazeera]

    The Facts

    • Nvidia Corp. has agreed to pay $5.5M to settle a regulatory investigation filed by the Securities and Exchange Commission (SEC).

    • The California-based company makes graphics processing units (GPUs) for video-game graphics, but which are also suited for mining cryptocurrencies like Ethereum and Bitcoin.

    The Spin

    Narrative A

    Cryptocurrencies are the ultimate boom-and-bust commodity. By failing to disclose how much of its revenue relied on selling GPUs to crypto miners, Nvidia clearly deprived its investors of crucial information needed to track projected future revenue and profits. Good thing the SEC is around.

    Narrative B

    As far as enforcement actions go, this is pretty weak stuff. Nvidia did, in fact, disclose to investors how much crypto was driving sales of its crypto-mining chips. How is the company supposed to know what each and every end-user is doing with its products?

    Cynical narrative

    The supreme irony here is that the SEC itself enforces a regime of silence surrounding its investigations and settlements that ultimately only serves to harm investors by depriving markets of material information. Now, a case before the Supreme Court will test the SEC's gag order mandate, which has been in place since 1972.

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