Super Micro sued by shareholders over China-related criminal case against co-founder, others

Shareholders have filed a class action lawsuit against Super Micro Computer, accusing the company of inflating its stock price and overstating its business prospects by failing to disclose its significant reliance on sales to China and material weaknesses in its export control compliance. The lawsuit follows criminal charges brought against co-founder Yih-Shyan Liaw, sales manager Ruei-Tsang Chang, and contractor Ting-Wei Sun, alleging criminal smuggling of Nvidia chips. Super Micro’s stock price plummeted 33% on March 20th, wiping out approximately $6.1 billion in market value, and Liaw resigned from the board.

The lawsuit names CEO Charles Liang and CFO David Weigand as defendants, seeking unspecified damages for investors between April 30, 2024, and March 19, 2026. Prosecutors allege that Liaw and Chang directed a Southeast Asian company to purchase $2.5 billion worth of servers containing Nvidia chips in 2024 and 2025. While Super Micro claims it is cooperating with the government and that the alleged conduct violates company policy, neither Super Micro nor Nvidia has been criminally charged. Nvidia is also not a defendant in the shareholder lawsuit.

The filing highlights a common pattern of shareholder lawsuits following significant negative news impacting stock prices, in this case, stemming from concerns about potential violations of U.S. export laws and the company’s business practices in China.

(Source：The Economic Times)