Super Micro Computer $SMCI is under investigation by the U.S. Department of Justice for alleged accounting violations. The stock plunged more than 14% after trading resumed, following a delay in the filing of their 10-K report.
Super Micro Computer, a major player in server production linked to the AI industry, is currently under investigation by the U.S. Department of Justice (DOJ) over alleged accounting violations. This investigation follows a whistleblower lawsuit and a critical report from Hindenburg Research, a well-known short-seller.
The probe, still in its early stages, involves the U.S. attorney’s office in San Francisco, which is gathering relevant information. A former employee, Bob Luong, has accused Super Micro of prematurely recognizing revenue between 2020 and 2022.
Earlier this month, Super Micro Computer strongly denied the claims made by Hindenburg Research, labeling the accusations as “false or inaccurate.” Hindenburg’s report, published in August, accused the company of accounting manipulation, including undisclosed related-party transactions and potential export control violations. Hindenburg also disclosed its short position in Super Micro at that time.
Super Micro has delayed the filing of its 10-K report, which has raised concerns about potential financial irregularities. This delay comes after the August report by Hindenburg, and the company has yet to provide an update on the filing.
In the past, Super Micro settled a $17.5 million case with the U.S. Securities and Exchange Commission (SEC) in 2020 over previous accounting violations. Following this latest development, $SMCI stock has seen a sharp decline, dropping over 9% in a day, with the stock currently down about 59% from its peak after the AI-driven surge in value.
Super Micro’s CEO, Charles Liang, continues to deny the short-seller allegations but has said that the company will respond “in due course.” The company has requested that Luong’s lawsuit be sent to arbitration, with a hearing scheduled for later this week.
Update
Super Micro Computer’s stock, $SMCI, has been halted three times and has dropped by 13%. This comes shortly after the U.S. Department of Justice announced an investigation into the company. Recently, $SMCI delayed its FY2024 10-K filing, citing the need for additional time to “complete an assessment of its internal controls over financial reporting.”
Stay informed with our financial updates, stocks, bonds, commodities. Get global & political insights. Follow us & enable notifications for the latest updates.
One thought on “Super Micro Computer Under U.S. Justice Department Investigation for Accounting Violations, Stock Drops Over 9%”