Supermicro Settled Financial Accounting Investigation With SEC

Super Micro Computer, Inc. concluded a settlement with the US SEC, resolving a previously disclosed investigation into the company’s financial accounting and disclosures for fiscal years 2014-2017.

It has already corrected for the effects of these matters in financial statements filed with the SEC, including in its Annual Report, filed on May 17, 2019, on Form 10-K for the fiscal year ended June 30, 2017. No further corrections are required.

Under the terms of the consent settlement, the company will pay a $17.5 million civil penalty, which was fully reserved for and previously disclosed in the company’s Form 10-Q for the quarter ended March 31, 2020, and the company agrees to cease and desist from committing future violations.

Charles Liang, chairman and CEO, will also reimburse the company for $2,122,000 pursuant to the claw-back provisions of the Sarbanes-Oxley Act of 2002.

In settling this matter, the SEC acknowledged firm’s cooperation during the investigation and its remedial efforts, including substantial improvements to its internal controls, and reorganizing and enhancing its management team.

The board of directors and management are committed to maintaining strong internal financial controls, and adhering to best practices for compliance and corporate governance.

“We are pleased to have settled this matter and put this investigation behind us,” said Liang. “Supermicro is committed to conducting our business ethically and transparently. We fell short of our standards, and we have implemented numerous remedial actions and internal control enhancements to prevent such errors from recurring. Our strengthened financial accounting and management team will help us continue building value for shareholders and customers as we innovate in high-performance, high-efficiency server and cloud technology.”

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