San Jose-based Super Micro Computer, a prominent supplier of high-performance AI server hardware, disclosed this week that it has received subpoenas from both the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC). The subpoenas, served in late 2024, are part of an apparent response to allegations first raised by the now-defunct short seller Hindenburg Research in August of last year.
The company stated in an SEC filing Tuesday that both agencies are seeking "certain documents" in connection with the Hindenburg report, which was sharply critical of Super Micro's accounting practices and corporate governance. The company's stock has been volatile ever since, and investor scrutiny remains high.
The Legal Landscape: Subpoenas, Internal Controls, and Auditor Resignation
While Super Micro declined to comment publicly on the subpoenas themselves, it noted in its disclosure that it is fully cooperating with both agencies. Legal experts suggest that such subpoenas likely signal active investigations, even if no enforcement action has yet been announced.
"Subpoenas don't always indicate an investigation, but when paired with auditor resignation and public market impact, it's highly likely the SEC and DOJ are conducting formal inquiries," said Nicole Wright, associate professor at James Madison University.
Indeed, EY resigned as the company's auditor following the accounting concerns, and BDO has since been appointed as the replacement. Amid these changes, Super Micro received an extension from the SEC to delay its 10-K filing without risk of delisting, and an internal probe found "no evidence of misconduct"—though it did recommend the replacement of the company's CFO.
CEO's Response: Confidence in Recovery and Growth
In a conference call Tuesday, CEO Charles Liang struck an optimistic tone. He confirmed that the delayed financials—including the 10-K and Q1/Q2 10-Qs for fiscal 2025—would be filed by the February 25 SEC extension deadline. Liang also said Super Micro would "continue to add more top experienced leaders," specifically naming the CFO and CCO roles, to strengthen internal controls and corporate governance.
Despite the legal cloud, Liang projected fiscal year 2025 revenue of $23.5 billion to $25 billion, with plans to scale to $40 billion by 2026, driven in part by the company's direct-liquid cooling (DLC) technology, which is expected to be adopted by over 30% of new data centers within the next year.
Accounting Adjustments Signal Caution
Still, the company revised some of its preliminary fiscal 2024 results, adjusting earnings downward by $0.09 per share due to a $45 million inventory reserve charge. These changes are not categorized as restatements, but they have added to investor anxiety and regulatory scrutiny.
Meanwhile, JPMorgan analysts called Super Micro's Q2 financial results "mixed," noting margin pressures and compliance risks, but praised the forward guidance as "a nice upside surprise." The analysts emphasized that while Super Micro holds a strong technical position in the AI infrastructure market, SEC compliance issues may constrain working capital and operational flexibility.
Implications: Enforcement, Market Impact, and Governance Lessons
This case underscores a recurring theme in SEC and DOJ enforcement: accounting irregularities, especially when flagged by short sellers, are taken seriously—particularly in high-growth sectors such as AI and semiconductors where investor exuberance may outpace corporate controls.
For legal and compliance professionals, Super Micro's experience serves as a case study in:
- The strategic importance of early cooperation with regulators.
- The risk multiplier effect of auditor resignation.
- The importance of internal investigations and board-level governance reforms in mitigating exposure.
Whether the subpoenas evolve into formal charges remains to be seen, but Super Micro's proactive disclosures, paired with regulatory extensions and board-directed leadership changes, suggest a company eager to stabilize and restore investor confidence.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
