Super Micro Computer (SMCI) stock fell more than 2% Tuesday following a report from short seller Hindenburg Research claiming, among other things, "accounting manipulation" at the AI high flyer.

Hindenburg Research said its three-month investigation "found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues." The firm disclosed Tuesday that it had taken a short position in Super Micro.

Yahoo Finance reached out to Super Micro and had not heard back from the company at the time of publication.

The maker of data center servers and management software captured the attention of investors this year as it rode the AI wave. The company buys components from AI chipmaker Nvidia (NVDA).

Super Micro shares soared from $290 in early January to north of $1200 by March. The stock is off about 50% from its March peak but is still up 90% year to date. The company recently announced a 10-for-1 stock split effective Oct. 1.

In its report, Hindenburg claimed that despite a $17.5 million settlement in August 2020 with the SEC following an inquiry for "widespread accounting violations," Super Micro's business practices did not improve and senior executives who had left amid the scandal were later rehired."

The report quotes a former salesperson: “Almost all of them are back. Almost all of the people that were let go that were the cause of this malfeasance.”

The report stated, “Even after the SEC settlement, pressure to meet quotas pushed salespeople to stuff the channel with distributors using 'partial shipments' or by shipping defective products around quarter-end, per our interviews with former employees and customers.”

"All told, we believe Super Micro is a serial recidivist," Hindenburg said in its report.

"It benefitted as an early mover but still faces significant accounting, governance and compliance issues and offers an inferior product and service now being eroded away by more credible competition."

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