Shares of Super Micro Computer, Inc. (Nasdaq: SMCI) stock surged more than 34% in midday trading on Monday after a special committee found “no evidence of misconduct” and the company announced a new chief accounting officer and that it was seeking a new chief financial officer.
The stock has swung wildly up and down since accounting giant Ernst & Young resigned as its auditor in October after disclosing it was “unwilling to be associated with the financial statements prepared by [SMCI’s] management.” Until last month, SMCI had been at risk of being delisted from the Nasdaq exchange due to its delinquent filings with the Securities and Exchange Commission (SEC). The AI server maker also missed earnings estimates in November.
“The evidence reviewed by the Special Committee did not raise any substantial concerns about the integrity of Super Micro’s senior management or Audit Committee, or their commitment to ensuring that the Company’s financial statements are materially accurate,” the company said in a statement.
The committee findings are the result of a three-month investigation formed after Ernst & Young voiced concerns over Super Micro’s internal controls, board independence, and accounting practices. That committee is made up of SMCI’s board of directors, counsel from Cooley LLP, and a team from forensic accounting firm Secretariat Advisors.
In an attempt to rebuild its embattled financial team, Super Micro has appointed Kenneth Cheung, current vice president of finance and corporate controller, as the new chief accounting officer, and said it will be filling a number of vacant positions.
Super Micro’s problems began back in August when a report from Hindenburg Research alleged it had found “glaring accounting red flags,” sanctions and export control failures, and evidence of undisclosed related party transactions.