Super Micro Computer: auditor exit, late filings, DOJ and SEC inquiries and an export-control indictment

The short-seller report and the delayed filings

Short-seller report published

The annual report states that on 27 August 2024 a news article was published by a short seller, that the company believes it contained false or inaccurate statements, and that the report and the delinquent filings contributed to a substantial negative impact on the trading price of its stock. (27 Aug 2024)

Annual and quarterly reports filed late

Supermicro could not file its fiscal 2024 10-K on time, and the first and second quarter fiscal 2025 10-Qs were also delinquent. The company says it filed all the delinquent reports within the extension period granted by Nasdaq. It announced on 25 February 2025 that it had filed the fiscal 2024 10-K and both 10-Qs. (2024 - 25 Feb 2025)

Auditor resignation and internal-control findings

Ernst & Young resigns mid-audit

Ernst & Young resigned as Supermicro's independent auditor while auditing the fiscal year ended 30 June 2024. Reports describe the firm as saying it could no longer rely on representations from management and the audit committee. Supermicro said it disagreed with the decision. Shares fell sharply: reports give declines of roughly 30% to 34%, with an intraday low near 38% in pre-market trading by one account. (30 Oct 2024)

BDO adverse opinions on internal control

BDO USA, the successor auditor, issued an adverse opinion on internal control over financial reporting for fiscal 2024 (flagged in February 2025) and stated for fiscal 2025 that the company did not maintain, in all material respects, effective internal control. The company's 10-Q for the quarter to 31 March 2026 said the material weaknesses remained unremediated. (Feb 2025; fiscal 2025)

Controls still not effective at 30 June 2026

The company concluded that internal control over financial reporting and disclosure controls were not effective as of 30 June 2026 because of a material weakness. It says remediation has begun but it cannot provide assurance that it will be adequate. (Fiscal 2026 annual report)

DOJ and SEC inquiries

DOJ and SEC subpoenas disclosed

Supermicro disclosed that it received subpoenas in late 2024 from the Department of Justice and the Securities and Exchange Commission seeking documents following the August 2024 short-seller report. It said it was cooperating. The SEC declined to comment and the DOJ did not respond, according to the report. (11 Feb 2025)

Status of inquiries in the fiscal 2026 annual report

The company says an SEC subpoena seeks documents on certain customers, including one subject to the indictment, and on its controls and procedures; an SDNY grand jury subpoena seeks documents on the indicted individuals, the compliance program and internal controls; and it has received other subpoenas and inquiries from the DOJ, the Commerce Department's Bureau of Industry and Security export enforcement office and foreign authorities. It states it has not been informed that it is the target of any of them to date, and it cannot predict their scope, duration or outcome. (Fiscal 2026 annual report)

The March 2026 indictment

Three charged over alleged diversion of AI servers

The DOJ unsealed an indictment charging Yih-Shyan "Wally" Liaw, Ruei-Tsang "Steven" Chang and Ting-Wei "Willy" Sun with conspiracy to violate the Export Control Reform Act (up to 20 years), conspiracy to smuggle goods from the U.S. and conspiracy to defraud the U.S. (up to 5 years each). The DOJ says Liaw and Sun were arrested and Chang remains a fugitive. It alleges servers with controlled GPUs went via Taiwan to a Southeast Asian company and on to China without a licence, with about $2.5 billion of servers bought by that company in 2024-25 and at least about $510 million diverted in April-May 2025. (19 Mar 2026)

Alleged dummy servers staged for audits and an inspection

The DOJ alleges false documents portrayed the Southeast Asian company as end user, that thousands of non-working dummy servers were staged for audits and a Commerce Department inspection after the real servers had shipped, and that surveillance footage shows preparation of the dummies. (19 Mar 2026)

Share-price reaction

Reports describe the largest one-day fall since October 2024. One outlet reports a 26.21% fall to $22.69; another cites CNBC for a 33% fall. The Wall Street Journal figure cited is more than $6 billion of market value erased. (20 Mar 2026)

Evidence that cuts the other way

Company says it is a victim and has acted

The CEO's letter states Supermicro is not a defendant and that it "appears that Supermicro has been a victim of the elaborate schemes orchestrated by these individuals." It says action was taken against identified employees, the director named in the indictment resigned from the board, oversight of export controls is being tightened, an acting Chief Compliance Officer was appointed and the company is cooperating fully. (26 Mar 2026)

Board-led investigation finds no knowledge by current senior management

An investigation led by two independent directors with Munger, Tolles & Olson and AlixPartners found no evidence that any current member of senior management knew of the alleged diversion scheme, no evidence the company directly sold export-controlled products to known restricted parties or locations, and no evidence that previously issued financial statements could not be relied upon. The board adopted the recommendations in full and personnel actions, including terminations, followed. The company says it continues to cooperate with government investigations. (20 Aug 2026)

2024-25 committee review and no expected restatement

After the August 2024 report an independent special committee of the board reviewed the allegations. The company said on EY's resignation that it disagreed and did not expect restatements, and it completed the delayed filings within Nasdaq's extension. (Oct 2024 - Feb 2025)