NVIDIA’s Third-Largest Customer – Super Micro Computer (SMCI) – Reportedly Under A DOJ Probe As Its Annual Report Filing Delays Place Investors On Edge

wccftech.com:

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

In what is now being interpreted as a testament to the gravity of the allegations leveled by the meticulous short-seller firm Hindenburg Research, the US Department of Justice has reportedly opened an active investigation into the troubled affairs of the retailer of high-performance servers and liquid-cooled AI racks, Super Micro Computer (SMCI).

To wit, the Wall Street Journal is now reporting that a prosecutor affiliated with the US attorney's office in San Francisco has, in recent days, contacted relevant persons with first-hand knowledge of the events as alleged by Hindenburg Research in its comprehensive short attack against Super Micro Computer back in August. While the probe appears to be at a nascent stage, these preliminary contacts do suggest that the DOJ is taking Hindenburg's allegations seriously.

Related Story Super Micro Computer (SMCI) Is Likely To Disclose Its Annual Report Today After Hindenburg’s Short Attack In August Prompted An Internal Review

For the benefit of those who might not be aware, Hindenburg Research had leveled a few primary allegations against Super Micro Computer in its report:

1. SMCI sales team allegedly engages in distribution channel stuffing by pushing products to distributors based on artificially inflated demand forecasts.
2. To meet specific sales targets and inflate the total shipment count, Super Micro Computer regularly undertakes partial shipments.
3. After the SEC charged Super Micro Computer for "widespread accounting violations" in 2020, resulting in a $17.5 million settlement, the company re-hired top executives responsible for those violations within a three-month period. This then resulted in another lawsuit that was filed in April 2024, asserting that SMCI restarted its improper revenue recognition practices just three months after reaching a settlement with the SEC.
4. SMCI has paid