Dive Brief:

• Super Micro Computer launched an independent investigation into the March indictments of three individuals no longer affiliated with the AI server maker, according to a Tuesday press release
• The probe, which has no set timetable, comes less than a month after the U.S. Attorney’s Office in the Southern District of New York unsealed an indictment charging the company’s co-founder Yih-Shyan “Wally” Liaw along with a sales manager and a contractor, in connection with a scheme to smuggle or “secretly divert billions of dollars worth of servers with cutting edge U.S. Artificial Intelligence Technology to China.” 
• The company’s investigation is being led by two independent board members, including former Deloitte audit partner Scott Angel. The board’s independent directors also retained the law firm of Munger, Tolles & Olson; MTO in turn retained AlixPartners, which has expertise in forensic accounting and audit committee investigations, as an independent consultant, according to the release. 

Dive Insight:

It’s not the first time that Super Micro has drawn scrutiny.

The now-defunct short seller Hindenburg Research issued a highly critical report on Super Micro in August 2024, which detailed “glaring accounting red flags.” Following the report, Super Micro delayed the filing of its annual 10-K for the year and announced it would be completing an assessment of its internal controls.

In December of that year, an independent special committee tasked with investigating the integrity of Super Micro’s audit committee and company management found no evidence of misconduct on the part of management or the board. But it made several recommendations including that Super Micro “transition to a new CFO.”

As of Wednesday, David Weigand, appointed CFO in February 2021, was still listed as the company’s finance chief on its website. A company spokesperson said Super Micro had no comments beyond its Tuesday release, declining to comment on the status of the company’s response to the recommendation that it tap a new CFO.

The indictments last month charged Liaw, 71, Ruei-Tsang “Steven” Chang, 53, of Taiwan and the contractor Ting-Wei “Willy” Sun, 44, also of Taiwan, each with one count of conspiring to violate the Export Controls Reform Act, one count of conspiring to smuggle goods from the U.S. and one count of conspiring to defraud the U.S. 

At the time that the charges were announced, the company said it placed Liaw, the co-founder who was also senior vice president of business development and a board member and Chang on administrative leave, and “terminated its relationship” with Sun, effective immediately. 

On March 20, Liaw resigned from the board and the company also announced it appointed DeAnna Luna as acting chief compliance officer, effective immediately, according to a filing with the Securities and Exchange Commission.

On Tuesday the San Jose, California-based company noted it was not named as a defendant in the indictment and that the three people indicted no longer have any relationship with the company.  

The company’s shares ticked up 3.1% Wednesday to close at $23.37 but were still well below the $30 area they were trading at before the March 19 indictment announcement roiled the stock.