SCOTUS Set to Weigh in on the PSLRA’s Heightened Pleading Standards

The Supreme Court will review the Ninth Circuit’s decision in Ohman v. Nvidia Corp., which affirmed in part and reversed in part the district court’s dismissal of claims brought against Nvidia and three of its officers under the Securities Exchange Act of 1934. The appeal will provide the Supreme Court with the opportunity to resolve two splits among the circuit courts in applying the heightened pleading standard for securities fraud under the Private Securities Litigation Reform Act of 1995 (PSLRA).¹ 

The securities fraud action was premised upon the defendants’ alleged non-disclosure of the number of graphics processing units (GPUs) Nvidia had sold for cryptocurrency mining purposes.² Plaintiffs alleged that this omission gave investors a false impression of Nvidia’s exposure to the volatile cryptocurrency market, which, when it faltered, ultimately led to losses among Nvidia’s shareholders.³ 

The first circuit split…