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Supermicro stock plummets 35% after accounting firm resigns on the spot after DOJ probe

Supermicro stock takes a 35% dive in a single day, as its accounting firm resigns on the spot: citing unreliable management, and possible law violations.

Supermicro stock plummets 35% after accounting firm resigns on the spot after DOJ probe
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Gaming Editor
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TL;DR: Supermicro's stock dropped 35% after Ernst & Young resigned as its accounting firm, citing unreliable management and possible law violations. The resignation follows an SEC filing and a Department of Justice investigation into alleged financial manipulation and export regulation violations.

Supermicro is in a lot of trouble right now, with its stock price plummeting 35% today after its accounting firm, Ernest & Young, resigned citing unreliable management and possible law violations.

Supermicro stock plummets 35% after accounting firm resigns on the spot after DOJ probe 50

Ernest & Young's letter was cited in an SEC filing, which explained: "We are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management's and the Audit Committee's representations and to be unwilling to be associated with the financial statements prepared by management, and after concluding we can no longer provide the Audit Services under applicable law or professional obligations".

The accounting firm also put into question Supermicro's ability to act with "integrity and ethical values". Supermicro has of course rejected Ernest & Young's claims in its filing, saying that there were "no reportable events" that would implicate Supermicro in any wrongdoing.

The thing is... it's not just Ernest & Young's resignation from being Supermicro's accounting firm, as the tech giant was already in trouble with the law. The Department of Justice opened an official investigation into Supermicro after Hindenburg Research accused the HPC/server company of manipulating its financial reports, and violating US export regulations into Russia and China.

Hindenburg Research's report from August was titled "Supermicro: Fresh Evidence Of Accounting Manipulation, Sibling Self-Dealing And Sanctions Evasion At This AI High Flyer" and accused the company of selling heavily to Russia in the wake of its invasion into Ukraine, corroborated by 3 months of interviews from former Supermicro staffers.

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Anthony joined the TweakTown team in 2010 and has since reviewed 100s of graphics cards. Anthony is a long time PC enthusiast with a passion of hate for games built around consoles. FPS gaming since the pre-Quake days, where you were insulted if you used a mouse to aim, he has been addicted to gaming and hardware ever since. Working in IT retail for 10 years gave him great experience with custom-built PCs. His addiction to GPU tech is unwavering and has recently taken a keen interest in artificial intelligence (AI) hardware.

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