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Super Micro plunge 30%! EY Resign Over Ethics Concerns

Stock SpotlightWednesday, Oct 30, 2024 11:06 am ET

1min read

Super Micro Computer shares have plummeted over 30% following the resignation of Ernst & Young (EY) as its auditor. EY cited concerns about the company's commitment to integrity and ethics, prompting Super Micro to start the process of finding a new auditor.

EY noted it only partially agreed with the statement Super Micro released on Wednesday, which asserted that the issues would not result in changes to previously issued financial results.

The situation began in late July, when EY first raised concerns regarding Super Micro's internal financial controls, governance, and transparency, leading the company to form a special board committee to investigate its internal practices.

This is not the first time Super Micro has faced scrutiny. In August, Hindenburg Research reported alleged glaring accounting red flags, undisclosed related-party transactions, sanctions, export-control violations, and customer issues. This led to a Justice Department investigation into Super Micro for possible accounting violations.

In 2020, Super Micro paid a $17.5 million fine to the Securities and Exchange Commission after the regulator found the company had prematurely and improperly recorded revenue.

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