FX168 Financial News Agency (North America) News Nvidia and Meta are currently involved in two lawsuits in the Supreme Court this year, claiming that if the judgment is not in their favor, the judicial system will be filled with investor litigation.

So far, things have not developed completely according to their wishes.

Nvidia's lawyers presented their case in the Supreme Court last Wednesday (November 13), arousing skepticism from judges with different ideological backgrounds. Meta's lawyers encountered a similar situation last week as well.

"In my view, you are asking us to do an analysis that we are not good at," Judge Elena Kagan, appointed by Democratic President Barack Obama, told Nvidia's lawyer Neil Kumar Katyal.

The outcome of the case may weaken or encourage future securities fraud litigation parties.

Nvidia argues that investors suing the company and accusing Nvidia CEO Jensen Huang of making false statements should be required to provide more specific information in the lawsuit, explaining the circumstances known to Huang when making false statements.

Investors claim that in 2017 and 2018, Huang deliberately deviated from Nvidia's internal company data, incorrectly attributing the demand for chips to the video game market.

Investors speculate that the demand at that time was actually being driven by the more volatile cryptocurrency mining market. This assumption is based on the opinion of a financial analyst, whose conclusion is based on public documents rather than Nvidia's company files.

"This is a highly technical topic, I don't understand why the court opposes evaluating this point during the litigation," Supreme Court Justice Samuel Alito appointed by the Republican President George W. Bush told nvidia's lawyers.

Judges urge nvidia to explain why they should overturn the ruling of the Ninth Circuit Court of Appeals, reiterating their views presented last week in the case against Meta's Facebook.

In both cases, the appellate courts allowed investors to sue companies intending to file class action securities fraud lawsuits.

Yale Law School Professor Jonathan Macey expressed surprise at the questions raised by the judges in the Facebook case.

"One surprising thing in oral arguments," he said, "is that you have established this bipartisan coalition", conservative Justice Clarence Thomas and liberal Justice Sonia Sotomayor expressed concerns of being "very supportive of the plaintiff".

Facebook stated that investors should not accuse it of misleading shareholders, as it had not disclosed its cooperation with the United Kingdom political consulting firm Cambridge Analytica, which leaked data of 87 million Facebook users.

The core issue in both disputes is what facts the plaintiff must include in the legal complaint to keep the case in court.

Facebook argues that the information it disclosed was not false or misleading, as it did not disclose that Cambridge Analytica's data leak had indeed occurred in the past, especially because the so-called risks do not constitute known ongoing or future business damage risks.

According to nvidia, investors should not rely solely on expert opinions to maintain the proposed collective lawsuit against the company.

"Congress... hopes to stop such lawsuits, disputing afterwards what seemed to allow fraudulent lawsuits," Cathyar said on Wednesday representing nvidia.

"When stocks fall, what [the plaintiff] needs to do is find an expert whose numbers contradict the company's public statements," Cathyar said.

Cathyar further stated that a judgment favorable to shareholders provided the plaintiff with 'a roadmap' to avoid federal laws that require specific information in securities fraud complaints.

Part of the Private Securities Litigation Reform Act (PSLRA) aims to prevent frivolous lawsuits, requiring plaintiffs to prove that the defendant company intentionally made false or misleading statements, which were actually false. Neil Gorsuch, a Supreme Court justice appointed by Republican President Donald Trump, also believes that the PSLRA may need improvements.

Gorsuch expressed disbelief that CEOs like Huang Renxun were unaware of such a significant source of the company's revenue, calling it 'unbelievable.'

Jim Redwood, a securities law professor at Albany Law School, expressed doubts about whether the Supreme Court would make a ruling favorable to investors, expecting both cases to be resolved in a way that would curb future securities class actions.

"The Facebook case is more approachable," he explained, saying that this social media company's case may be weaker than nvidia's case.

The Department of Justice has joined the nvidia case, siding with the shareholders.

"We believe the Ninth Circuit correctly applied the standards here," the Department of Justice's lawyer stated during Wednesday's arguments.