Their failure resulted in Supermicro’s improper and accelerated recognition and reporting of revenue before obtaining customer acceptance, before the delivery of goods to customers, upon shipment of goods that were incomplete or misassembled, upon shipment to a large distributor, and while holding customers’ bills of landing.
In addition, Supermicro allegedly failed to properly account for extended warranties and under-reported certain expenses by misusing its cooperative marketing program to pay various unrelated expenses including warehousing costs for goods at quarter-end, shipping costs, and product repair costs.
Furthermore, the SEC accused the company of violating certain antifraud reporting, books, and records, and internal accounting controls provisions of the federal securities laws.
Supermicro agreed to settle without admitting or denying the allegations of the SEC.
Aside from the payment of the $17.5 million in civil penalty, the company agreed to cease and desist from violating Sections 17(a)(2) and (3) of the Securities Act and the reporting, books, and records and internal accounting control provisions of the Securities Exchange Act.
