Nvidia class action suit dismissed
Over and done with
A US District Court judge yesterday effectively dismissed the class action suit brought against Nvidia, the company said today.
The suit was launched in March 2002 after the graphics chip maker announced a year last February that it planned to investigate "certain accounting matters" and the results statements it had made between February 2000 and February 2002.
It subsequently restated its results for that period.
"In order to overstate revenues in its financial statements, Nvidia violated Generally Accepted Accounting Principles and SEC rules by engaging in an improper scheme," the suit alleged. "As a result of defendants' misleading statements and accounting improprieties during the Class Period, the price of Nvidia common stock traded at artificially inflated prices."
The SEC also took an interest in the matter, and asked Nvidia to open up its books for the agency's investigators. It was that investigation that prompted the restatement of Nvidia's results for the period.
Essentially, Nvidia accounted for $3.6 million worth of product expenses in Q2 and Q3 of fiscal 2000 - the sum should have been included in the Q1 2000 results The SEC was concerned that Nvidia had brought the sum forward to Q2 and Q3 to ensure that its impact on Q1's figures wouldn't impact its record of unbroken quarterly profit growth.
More recently, Nvidia received a Wells Notice - notification that the SEC intended to pursue punitive action against the company. However, in April this year, a document Nvidia filed with the SEC revealed it had reached a "tentative" deal with the SEC. In exchange for agreeing to be a good boy in future, Nvidia effectively persuaded the SEC to decide against punitive action.
In case of the class-action suit, following the deal with the SEC, all claims were dismissed with prejudice on 12 June. ®