Super Micro Computer Inc (NASDAQ: SMCI) agreed to pay a civil penalty of $17.5 million to settle its alleged widespread accounting violations. The California-based producer of computer servers and equipment is doing business as Supermicro.
The company’s Chairman and CEO Charles Liang said they are “pleased to settle” and put the SEC investigation behind them. He added, “We fell short of our standards, and we have implemented numerous remedial actions and internal control enhancements to prevent such errors from recurring.”
Liang further stated that “Supermicro is committed to conducting our business ethically and transparently. Our strengthened financial accounting and management team will help us continue building value for shareholders and customers…”
Allegations against Supermicro
The Securities and Exchange Commission (SEC) alleged that Supermicro and its executives engaged in improper accounting by prematurely recognizing revenue and understating expenses from 2015 to 2017.
The company’s executives allegedly pushed employees to maximize its end-of-quarter revenue. However, they failed to create and maintain sufficient accounting control to accurately record revenue.
