SAN DIEGO & SAN JOSE, Calif.--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP is investigating whether the officers and directors of Super Micro Computer, Inc. (NasdaqGS: SMCI) breached their fiduciary duty to shareholders. Super Micro develops and manufactures high-performance server and storage solutions.
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Super Micro Computer, Inc. (SMCI) Engaged in Improper Revenue Recognition Scheme
Super Micro had a precarious few years in which it missed SEC financial disclosure deadlines due to accounting irregularities and was subject to an investigation by the SEC for its accounting practices. The Company's deteriorating operating performance led to a corresponding decline in its stock price. To combat this, certain Super Micro officers and directors engaged in a scheme to improperly recognize revenue when shipping unfinished product or when shipping to the Company's warehouses. At the same time, the officers and directors falsely reassured investors regarding the accuracy of the Company's financial reporting.
Then, in October 2017, Super Micro announced that it would be unable to timely file its fiscal year 2017 Form 10-K. Super Micro failed to file its required SEC filings for the next twenty months, resulting in the Company's delisting from the Nasdaq and the termination of three members of its senior management. Finally, on May 17, 2019, Super Micro issued a restatement for a five-year period (2013-2017) admitting that the Company and its officers and managers were aware of, engaged in, and concealed sales and accounting misconduct motivated by an aggressive focus on increasing quarterly financial results. As a result, Super Micro's earnings per share and revenues were artificially inflated by 32% and $40 million, respectively, and the Company incurred $109 million in investigatory costs. The Company is the subject of a federal securities class action and a cease-and-desist order issued by the SEC, which required Super Micro to pay $17.5 million due to its misconduct.
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