Source: Fortune.com
Summary
Super Micro Computer said an independent investigation found no evidence that senior management knew about an alleged scheme to smuggle $2.5 billion in Nvidia-chip hardware to China. The probe, led by the board, concluded that no senior executives were aware of the smuggling. However, the company did not address ongoing investigations in Taiwan or a U.S. grand jury subpoena. Supermicro also took personnel actions, including terminations, related to the probe. The company has faced multiple investigations in recent years, including one in 2024 that cleared management of wrongdoing.
Our Reading
The numbers tell one story.
Supermicro says no one knew. The board says it’s clean. But the government says otherwise.
Employees in Taiwan are in custody. A grand jury is asking questions. The CEO says he’s a victim.
Another investigation ends. Another question remains.
The company’s past and present collide in a way that leaves more questions than answers.
Author: Evan Null
What the investigation found
The internal probe was led by lead independent director Scott Angel, a former audit partner with Deloitte, and audit committee chair Tally Liu. They retained Munger, Tolles, & Olson as outside counsel and brought in advisory firm AlixPartners as a forensic accounting consultant. According to Supermicro, the investigation team reviewed the specific customer transactions from the federal indictment along with “a selection of other customers who bought restricted products.” It found no evidence management knew about the alleged smuggling, no evidence the company sold export-controlled products to banned companies or individuals, and no evidence the previously issued financial statements were unreliable.
“We are pleased to report the conclusion of this independent investigation,” said Angel in a statement. “The independent directors support the actions the Company has already taken to bolster its internal policies and procedures, as well as the additional enhancements that will be implemented.”
The investigation did not address the ongoing probes in Taiwan or the U.S. grand jury subpoena. It also did not mention Yih-Shyan “Wally” Liaw by name, despite his role in the alleged smuggling ring. The company said it took personnel actions, including terminations, for failure to follow company policies or the code of conduct.
Supermicro has faced multiple investigations in recent years. In 2024, a similar probe cleared management of wrongdoing, but the company still faces legal and regulatory challenges.
The company’s leadership has been under scrutiny for years, with a history of accounting issues and regulatory problems. The latest investigation may not be the last.
Second investigation in two years
This is the second time in two years the company has cleared its management team following an internal investigation. In 2024, the company wrapped a probe after auditor EY abruptly resigned mid-audit, concluding there was no evidence of fraud or misconduct. That probe was led by board member Susie Giordano, who reviewed 11 export transactions and found no evidence anyone at the company tried to circumvent export controls or was aware of any product diversion. The timing in Liaw’s court records indicates his alleged smuggling ring was ongoing during this investigation.
The 2024 investigation recommended multiple personnel actions, including that chief financial officer David Weigand be replaced “immediately” with someone with “extensive experience working as a senior finance professional at a large public company.” Weigand remains in the role 20 months later.
Supermicro was previously delisted from Nasdaq following an SEC investigation into its accounting practices. Supermicro settled with the SEC in 2020 for $17.5 million and former CFO Howard Hideshima was separately charged and fined. Liaw resigned from the board and the company at the time, but he came back in May 2021 as an outside consultant, before being named senior vice president.
In December 2023, he rejoined the board. Five months after his return to the board, prosecutors allege the smuggling operation was in full swing.
In a March 2026 letter to investors, Liang said the company was a victim.
Liaw’s trial set for 2027
“I am deeply saddened and shocked that actions of these individuals were placed above our mission and our responsibility to national security,” the letter states.
Liaw’s trial is set for March 2027. He faces up to 20 years in prison if convicted. His lawyer has not commented on the case.
The company has not commented beyond its press release, but investors are watching closely. The latest investigation may not be the last.
Supermicro’s leadership has been under scrutiny for years, with a history of accounting issues and regulatory problems. The latest investigation may not be the last.
Despite the board’s statement, the company still faces legal and regulatory challenges. The investigation may be over, but the questions remain.
Investors remain skeptical
Investors have been skeptical of Supermicro’s claims. Mark Newman, managing director at equity research firm Bernstein, said the company is trying to “bury this and not talk about it as much as possible.”
While the company said the investigation was complete, the government and overseas authorities continue to investigate. The company has not addressed the ongoing probes in Taiwan or the U.S. grand jury subpoena.
Supermicro has not commented beyond its press release, but investors are watching closely. The latest investigation may not be the last.
Despite the board’s statement, the company still faces legal and regulatory challenges. The investigation may be over, but the questions remain.
Investors are waiting for more details, but Supermicro has not provided them. The company’s leadership has been under scrutiny for years, with a history of accounting issues and regulatory problems.
Company’s response to the investigation
Supermicro said it took several personnel actions with respect to employees within its sales, technical support and business development functions, including terminations, for failure to follow Company policies or the Company’s code of conduct. The company also said it is enhancing its export compliance program, as part of its ongoing efforts to improve internal controls.
“The independent directors support the actions the Company has already taken to bolster its internal policies and procedures, as well as the additional enhancements that will be implemented,” said Angel in a statement.
However, the company did not address the ongoing investigations in Taiwan or the U.S. grand jury subpoena. It also did not mention Liaw by name, despite his role in the alleged smuggling ring.
Supermicro has faced multiple investigations in recent years. In 2024, a similar probe cleared management of wrongdoing, but the company still faces legal and regulatory challenges.
The company’s leadership has been under scrutiny for years, with a history of accounting issues and regulatory problems. The latest investigation may not be the last.
