Super Micro Computer, Inc. filed results for its second and third quarters of 2017—and then cast doubt on them, without clarifying the extent of the problem or when it would be solved. The complaint for this class action claims the company violated the Securities Exchange Act of 1934 by making false or misleading statements in its public filings, involving both accounting errors and Sarbanes-Oxley (SOX) certifications of internal control over its reporting.
The class for this action is all persons who acquired the securities of Super Micro between January 27, 2017 and January 30, 2018.
Super Micro Computer designs server solutions, including servers, motherboards, chassis, and accessories, based on modular and open-standard architecture.
On January 27, 2017, Super Micro issued a press release and filed a Form 8-K with its financial and operating results for the second quarter of 2017, ended on December 31, 2017. The results were confirmed in its Form 10-Q, filed on February 7, which included SOX certifications attesting that the information in the report “fairly presents, in all material respects, the financial condition and results of” the company.
Similarly, the company filed a press release and Form 8-K in April, and then a Form 10-Q with SOX certifications in May, for its third-quarter figures.
However, on August 29, 2017, the company filed a Notice of Late Filing, saying it could not file its fourth-quarter and annual Form 10-K for the fiscal year ended on June 30, 2017, saying, “Additional time is needed for the Company to compile and analyze certain information and documentation and complete preparation of its financial statements.” At this news, the stock price fell by nearly 5%.
The company reaffirmed the delay on October 26. The complaint quotes it as saying that the problem was a sales transaction that had originally been included as revenue in the second quarter, but, “prior to review by the Company’s independent auditors and prior to the Company’s public announcement of its results for the quarter,” the revenue had been removed to the third quarter.
The company claimed it was investigating “to determine whether there were any similar transactions and if so, whether such transactions were properly accounted for.” At this announcement, the stock price fell by more than 5%.
On January 30, 2018, six months after the end of the fiscal year, the company was apparently still uncertain of its figures: “Additional time is required to analyze the impact, if any, of the results of the investigation...” In fact, the announcement said the company did not know when the Form 10-K would be filed, nor could it “determine whether the Company’s historical financial statements will be adjusted or, if so, the amount of any such adjustment(s) and what periods any such adjustments may impact.” At this news, the stock price fell by more than 7%.