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SMCI FRAUD ALERT: BFA Law Notifies Super Micro Computer Investors of Upcoming October 29 Court Deadline and Encourages You to Contact the Firm (Nasdaq:SMCI)
Globe Newswire 27-Oct-2024 6:17 AM
NEW YORK, Oct. 27, 2024 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces that it has filed a lawsuit against Super Micro Computer, Inc. (NASDAQ:SMCI) and certain of the Company's senior executives for potential violations of the federal securities laws.
Investors have until October 29, 2024 to ask the Court to be appointed to lead the case. BFA's complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in Super Micro Computer securities. The complaint is pending in the U.S. District Court for the Northern District of California and is captioned Covey Financial Inc. v. Super Micro Computer, Inc., No. 24-cv-07274.
What is the Lawsuit About?
The complaint alleges that Super Micro Computer ("SMCI") is one of the largest providers of high-performance and high-efficiency servers. The complaint further alleges that during the relevant period, the Company misrepresented that its: (1) financial statements were prepared in accordance with GAAP; (2) internal controls over financial reporting were effective; (3) robust gross margins were sustainable and driven by legitimate business factors; and that (4) SMCI did not sell products in Russia during fiscal years 2023 and 2024 in purported compliance with relevant trade control regulations.
On August 6, 2024, SMCI revealed a significant decline in its gross margin attributed to increased production costs that could no longer be passed on to customers. On this news, the price of SMCI stock declined over 20%, from $616.94 per share on August 6, 2024, to $492.70 per share on August 7, 2024.
On August 27, 2024, Hindenburg Research published a report that provided evidence of SMCI's "glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues." The Hindenburg Report further described how SMCI engaged in a fraudulent revenue recognition scheme by prematurely recording revenue for equipment that could not be delivered or installed and booking revenue for faulty or incomplete products not ready for sale. As a result, according to Hindenburg, SMCI's "gross margins have started to collapse," as reflected on August 6, 2024. In response to the Hindenburg Report, SMCI's stock price declined approximately 3%, from $562.51 per share on August 26, 2024, to $547.64 per share on August 27, 2024.
The next day, August 28, 2024, SMCI announced that it would "not timely file its Annual Report on Form 10-K for the fiscal year ended June 30, 2024." This news caused the price of SMCI stock to decline more than 19%, from $547.64 per share on August 27, 2024, to $443.49 per share on August 28, 2024.
Finally, on September 26, 2024, The Wall Street Journal reported that the United States Department of Justice had initiated an investigation into the Company. On this news, the price of SMCI stock declined more than 12%, from $458.15 per share on September 25, 2024, to $402.40 per share on September 26, 2024.
If you invested in Super Micro Computer, Inc. you may have legal options and are encouraged to submit your information to the firm.
All representation is on a contingency fee basis, there is no cost to you. Shareholders are not responsible for any court costs or expenses of litigation. The firm will seek court approval for any potential fees and expenses.
Bleichmar Fonti & Auld LLP is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs' Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.'s Board of Directors (pending court approval), as well as $420 million from Teva Pharmaceutical Ind. Ltd.
