Thu Sep 26 15:00:35 UTC 2024: ## US Justice Department Investigating Super Micro Following Short-Seller Allegations
**San Francisco, CA -** The US Department of Justice (DOJ) is investigating Super Micro Computer, a leading AI server manufacturer, according to a report by the Wall Street Journal. The probe comes nearly a month after short-seller Hindenburg Research accused the company of accounting manipulation, leading to a 12% drop in Super Micro’s share price.
Sources familiar with the matter told the WSJ that the investigation is in its early stages and a prosecutor has recently contacted individuals who may possess relevant information. This information is reportedly connected to a former employee who alleges accounting violations at the company.
Super Micro delayed filing its annual report last month, citing a need to review its financial reporting processes, just one day after Hindenburg disclosed a short position and made accusations of accounting manipulation. Hindenburg’s report, based on a three-month investigation, included allegations of undisclosed related-party transactions and violations of export controls.
Super Micro denied the claims made by Hindenburg. While the company declined to comment on the DOJ investigation, the department itself would not confirm or deny the existence of such a probe.
The investigation comes at a time when the US government is cracking down on the sale of advanced technology, including high-end Nvidia chips, to China. A Reuters review of tender documents earlier this year revealed that Chinese entities acquired these chips, embedded in servers made by multiple companies including Super Micro, through resellers.
Super Micro has seen significant growth amidst the generative AI boom, with its market value reaching $67 billion in March from just $4.4 billion. However, the rally in AI stocks has since slowed down as investors realize the return on investment in these technologies will take longer than initially anticipated.
The DOJ investigation adds another layer of scrutiny to Super Micro, already facing accusations of accounting irregularities and potential violations of export controls. The outcome of the investigation could have significant implications for the company and the wider AI market.
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