Facebook and Nvidia ask US Supreme Court to dismiss fraud lawsuits

Facebook and Nvidia are asking the US Supreme Court to dismiss securities fraud lawsuits filed by investors, in cases that could make it harder to hold companies accountable in court. Both tech giants are challenging rulings by a lower court that allowed these lawsuits to move forward, saying the cases don't meet legal standards, as per a recent report by Reuters on the matter.

In Facebook's case, investors allege that the company misled them by failing to disclose a major 2015 data breach involving Cambridge Analytica, which became public in 2018 and caused Facebook's stock to drop. According to the Reuters report, investors argue that Facebook should have warned about the risk, while Facebook claims it wasn't required to report past incidents in its risk disclosures. Facebook already paid the Securities and Exchange Commission $100 million to settle similar charges and paid the Federal Trade Commission $5 billion over privacy violations.

Nvidia's case involves claims that it misled investors by downplaying how much of its growth came from sales linked to cryptocurrency mining. Investors say they were misled about how much Nvidia's business depended on the risky crypto market, states Reuters. Nvidia argues the lawsuit doesn't meet the stricter requirements for fraud cases set by a 1995 law aimed at reducing weak lawsuits. Nvidia also recently settled similar charges with US regulators for $5.5 million.

These cases come after a series of recent Supreme Court decisions that limited the power of federal regulators, further states Reuters. Legal experts say the current Court may be inclined to favour business interests, which could make it tougher for investors to bring similar lawsuits in the future if Facebook and Nvidia win.