US Justice Department probes Super Micro Computer, WSJ reports

The U.S. Department of Justice Investigates Super Micro Computer

(Reuters) – The U.S. Department of Justice is investigating Super Micro Computer, the Wall Street Journal reported on Thursday, nearly a month after short-seller Hindenburg Research alleged “accounting manipulation” at the AI server maker.

Super Micro’s shares fell about 12% following the report.

Probe at an Early Stage

The WSJ report, which cited people familiar with the matter, said the probe was at an early stage and that a prosecutor at a U.S. attorney’s office recently contacted people who may be holding relevant information.

The prosecutor has asked for information that appeared to be connected to a former employee who accused the company of accounting violations, the report added.

Delayed Annual Report

Super Micro had late last month delayed filing its annual report, citing a need to assess “its internal controls over financial reporting,” a day after Hindenburg disclosed a short position and made claims of “accounting manipulation”.

The short-seller had cited a three-month investigation that included interviews with former senior employees of Super Micro and litigation records.

Hindenburg’s allegations included evidence of undisclosed related-party transactions, failure to abide by export controls, among other issues.

The company had denied Hindenburg’s claims.

Super Micro on Thursday declined to comment on the report, while the DOJ said it cannot confirm or deny the existence of such a probe.

Crackdown on Technology Sales to China

A Reuters review of tender documents earlier this year showed Chinese entities acquired high-end Nvidia chips embedded in server products made by several companies, including Super Micro, through resellers.

The U.S. government has been cracking down on the sale of such technology to China.

Super Micro’s Success in Generative AI

Super Micro has been a big winner in the generative AI boom, as businesses bet on the technology needed to power applications such as ChatGPT, sending its market value to $67 billion in March from roughly $4.4 billion.

The rally in AI stocks has since cooled, as investors realized the payoff on companies’ heavy investments would be slower than expected.

(Reporting by Akash Sriram and Aditya Soni in Bengaluru; Editing by Shreya Biswas)

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The issues highlighted in the article are connected to SDG 8 (Decent Work and Economic Growth), SDG 16 (Peace, Justice, and Strong Institutions), and SDG 17 (Partnerships for the Goals).

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s content, the specific targets that can be identified are:
– Target 8.5: Achieve full and productive employment and decent work for all, including equal pay for work of equal value.
– Target 16.5: Substantially reduce corruption and bribery in all their forms.
– Target 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

There are no specific indicators mentioned in the article that can be used to measure progress towards the identified targets. However, the article does mention “accounting manipulation” allegations by Hindenburg Research, which can be considered as an indicator for measuring progress towards reducing corruption and bribery (Target 16.5).

Note: The lack of specific indicators in the article does not mean that progress cannot be measured. Additional information and data would be needed to establish relevant indicators for monitoring progress towards the identified targets.

Source: finance.yahoo.com