SEC Charges Tech Company with Omitting Revenue Growth

The SEC charged a tech company with omitting statements about the impact of cryptomining on revenue growth from the sale of graphics processing units ("GPUs") designed and marketed for gaming.

In the Order, the SEC alleged the company did not report material information regarding its revenue growth from the sale of GPUs on two consecutive quarterly earnings reports (Form 10-Q). The SEC stated that the company deliberately omitted the fact that the increase in GPU sales was largely due to cryptomining. In addition, the SEC determined the company's omission of this material information was misleading and deliberately created the impression that GPU sales were not significantly affected by cryptomining.

The SEC found the company in violation of Securities Act Sections 17(a)(2)-(3) ("Fraudulent Interstate Transactions"), Securities Exchange Act Section 13(a) ("Periodical and Other Reports"), and Exchange Act Rules 13a-13 ("Quarterly Reports on Form 10-Q"), 13a-15(a) ("Controls and Procedures") and 12b-20 ("Additional Information").

To settle the charges, the company agreed to a (i) cease-and-desist order and (ii) $5,500,000 penalty.