Super Micro Stock Plunges After Co-Founder Charged

<p>Super Micro Computer shares plunged by 33&percnt; Friday after a co-founder of the company was indicted for concealing shipments of servers to China that contained banned NVIDIA chips used in artificial intelligence technology&period;<&sol;p>&NewLine;<p>A copy of the indictment can be found <a href&equals;"https&colon;&sol;&sol;storage&period;courtlistener&period;com&sol;recap&sol;gov&period;uscourts&period;nysd&period;660027&sol;gov&period;uscourts&period;nysd&period;660027&period;2&period;0&period;pdf">here<&sol;a>&period;<&sol;p>&NewLine;<p>The United States Attorney for the Southern District of New York&comma; Jay Clayton&comma; Assistant Director of the Counterintelligence and Espionage Division of the Federal Bureau of Investigation &lpar;&OpenCurlyDoubleQuote;FBI”&rpar;&comma; Roman Rozhavsky&comma; and Assistant Director in Charge of the New York Field Office of the FBI&comma; James C&period; Barnacle&comma; Jr&period;&comma; announced the Indictment charging YIH-SHYAN &OpenCurlyDoubleQuote;Wally” LIAW&comma; RUEI-TSANG &OpenCurlyDoubleQuote;Steven” CHANG&comma; and TING-WEI &OpenCurlyDoubleQuote;Willy” SUN&comma; for conspiring to divert high-performance computer servers assembled in the United States and integrating sophisticated U&period;S&period; artificial intelligence technology to China&comma; in violation of U&period;S&period; export controls laws&period;  LIAW&comma; a U&period;S&period; citizen&comma; and SUN&comma; a citizen of Taiwan&comma; were arrested today and presented in the Northern District of California&period;  CHANG&comma; a citizen of Taiwan&comma; remains a fugitive&period;  The case has been assigned to U&period;S&period; District Judge Edgardo Ramos&period;<&sol;p>&NewLine;<blockquote><p>&OpenCurlyDoubleQuote;As alleged in the Indictment&comma; the defendants participated in a systematic scheme to divert massive quantities of U&period;S&period; artificial intelligence technology to customers in China&comma;” said U&period;S&period; Attorney Jay Clayton&period;  &OpenCurlyDoubleQuote;They did so through a tangled web of lies&comma; obfuscation&comma; and concealment—all to drive sales and generate revenues in violation of U&period;S&period; law&period;  Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to U&period;S&period; national security&period;  Crimes involving sensitive technology must be met with swift action otherwise the law is meaningless&period;  I commend the women and men of our Office&comma; the FBI&comma; and the Department of Commerce for their swift action in identifying&comma; charging&comma; and stopping this brazen evasion of our laws that protect national security and U&period;S&period; competitiveness&period;  We will continue to doggedly investigate and prosecute these illegal diversion schemes&period;”<&sol;p><&sol;blockquote>&NewLine;<p>&OpenCurlyDoubleQuote;The FBI’s investigation revealed that Liaw&comma; Chang&comma; and Sun allegedly conspired to sell billions of dollars’ worth of servers integrating sensitive&comma; controlled graphic processing units to buyers in China&comma; in violation of U&period;S&period; export control laws&comma;” said Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence and Espionage Division&period;  &OpenCurlyDoubleQuote;Controlling the export of sensitive U&period;S&period; artificial intelligence technology is essential to safeguarding our national security and defending the homeland&period;  That’s why combating export violations is among the FBI’s highest priorities&comma; and we will continue working with our law enforcement&comma; private sector&comma; and international partners to bring to justice all who take action to undermine U&period;S&period; national security&period;”<&sol;p>&NewLine;<p>The company released the following statement below on Friday&colon;<&sol;p>&NewLine;<p>&&num;8212&semi;<&sol;p>&NewLine;<p>Supermicro was informed today that the United States Attorney&&num;8217&semi;s Office for the Southern District of New York has unsealed an indictment of three individuals associated with the Company in connection with an alleged conspiracy to commit export-control violations&period;<&sol;p>&NewLine;<p>Supermicro is not named as a defendant in the indictment&period; The individuals charged are Yih-Shyan &&num;8220&semi;Wally&&num;8221&semi; Liaw&comma; Senior Vice President of Business Development and a member of the Company&&num;8217&semi;s Board of Directors&semi; Ruei-Tsang &&num;8220&semi;Steven&&num;8221&semi; Chang&comma; a sales manager in Taiwan&semi; and Ting-Wei &&num;8220&semi;Willy&&num;8221&semi; Sun&comma; a contractor&period; Supermicro has placed the two employees on administrative leave and terminated its relationship with the contractor&comma; effective immediately&period;<&sol;p>&NewLine;<p>The conduct by these individuals alleged in the indictment is a contravention of the Company&&num;8217&semi;s policies and compliance controls&comma; including efforts to circumvent applicable export control laws and regulations&period; Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U&period;S&period; export and re-export control laws and regulations&period;<&sol;p>&NewLine;<p>The Company has been cooperating fully with the government&&num;8217&semi;s investigation and will continue to do so&period; Supermicro has not been named as a defendant in the indictment&period;<&sol;p>&NewLine;