former Super micro computer chief strategy officer continues to allege that the hardware maker retaliated against and ultimately fired him for reporting what he believed were accounting irregularities and violations to the Securities and Exchange Commission (SEC).
Attorneys for Bob K. Luongo filed a motion Tuesday to lift the previous stay so that the whistleblower’s complaint against Super micro and its CEO Charles Liang may be filed and potentially prosecuted in federal court. Luong claims the company improperly recognized millions in revenue before actually delivering goods to customers and intentionally shipped equipment with missing parts to make its financials look in better shape than they were. Luong also alleged that the CEO’s wife and Super Micro co-founder Sara Liu Liang, along with her brother Edmond Liu, negotiated with the CEO of a business partner, Compuware, to delay payments and adjust the terms of the sale—still allowing for early revenue recognition. (Compuware’s CEO is Charles Liang’s brother, Bill Liang. Compuware is the distributor for Super Micro in Taiwan, China, and Australia, and Super Micro outsources design and power manufacturing to Compuware.)
Luong said in his lawsuit that he tried repeatedly over the years to get the company to investigate its accounting practices as well as certain employees before finally filing an internal complaint in March 2022. Luong claimed he was fired and placed on unpaid leave before was eventually fired in April 2023.
Super Micro denied Luong’s allegations and declined to comment. According to court documents, Super Micro’s human resources allegedly received a complaint in July 2022 that Luong had engaged in bullying of two of his direct reports. The company claimed that Luong refused to participate in an investigation into him, which put him on administrative leave. Super Micro claimed its investigation found “sufficient evidence” to draw conclusions about Luong’s treatment of other employees, including yelling, swearing and rude behavior. Super Micro wrote in a court filing that Luong also routinely missed work and skipped meetings.
Luong’s lawyer, Tanya Gomerman, said the company actually fired him for not cooperating with the investigation against the subordinate, but what Luong asked was for the chief financial officer to be present when he was interviewed. “They described Bob as essentially a my-way-or-the-highway kind of person, a bad manager who wouldn’t agree to do things — but they were things he believed were illegal,” Gomerman said.
After Luong filed his whistleblower complaint, instead of interviewing him for the alleged improper accounting practices, the company interviewed him for the human resources complaint, she said.
“It was after a lot of turmoil where he felt like he was being targeted when he wanted to speak up and do the right thing,” Gomerman said. Luong has worked at the company since 2012 and owned shares that fell when Super Micro was previously delisted Nasdaq in 2018 due to SEC investigation in its revenue recognition practices. It was listed again in 2020 after settling with the SEC and paying a $17.5 million fine. At the time, the company parted ways with its CFO, Howard Hideshima, who had been alleged by regulators that they had engaged in improper accounting. In the years since it was relisted, it has seen a 3000% increase in its share price and operates with an AI highflyer Nvidia.
But Luongo’s proposal is the latest blow to Super Micro, which it has been fighting the charges improper accounting for months. It was on the verge of being delisted for the second time and received a warning from Nasdaq after failing to submit an annual report or quarterly financial report. A short report from Hindenburg sellers hit the company in August, citing accounting irregularities among a host of other issues. The company’s former accounting firm, Ernst & Young, resigned in the middle of the audit and announced that it could not rely on the management team or the board’s independent audit committee. Super Micro later engaged BDO as the new auditor.
On Monday, Super Micro announced that a special panel of the board, made up of one director who joined specifically to lead the investigation, had completed its review and found that EY’s resignation and its conclusions were “not supported” by the panel’s final findings. The only member of the special commission, Susie Giordanojoined the board in August 2024 and has 25 years of experience advising executive management teams, having previously served as interim general counsel at Intel. As is customary for Super Micro directors, Giordano is entitled to an equity grant of $255,000.
According to Super Micro, Giordano worked with the law firm Cooley LLP and 50 of its lawyers, as well as a forensic accounting team from Secretariat Advisors. Investigators analyzed 9 million documents from 89 people and conducted 68 interviews with witnesses from current and former employees, management, consultants and board members—in addition to meeting with EY and another former auditor, Deloitte. However, the commission found “lapses” in ensuring that safeguards were put in place, including a consultancy contract with the company’s former chief financial officer, who resigned following an audit committee investigation in 2017. That consulting job has now been discontinued, according to Super Micro.
The tech company is also hiring a new CFO, chief accounting officer and chief compliance officer. Super Micro will also appoint general counsel and “expand the number of in-house counsel to a level commensurate with the size and complexity of Supermicro, particularly in light of its recent rapid growth and future growth ambitions.
EY and Giordano did not respond to requests for comment.
