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When an auditor abruptly resigned and then contacted the SEC about one of its clients, it may have set off a chain of events leading to an investigation. The tech company at risk, Super Micro, is tied to the AI boom. Following the withdrawal by its auditor, Ernst & Young (EY), it could now be the focus of an accounting-related fraud case. EY stated that it was no longer able to rely on Super Micro’s management and the board’s audit committee. Amy Lynch, FrontLine’s Founder and President, states that EY was indicating that it had some serious concerns about the company and likely contacted the SEC in order to keep themselves from being charged in any subsequent enforcement action. She adds that the SEC acts very quickly in circumstances where red flags are raised about a company’s financial reporting. Super Micro continues to be dogged by the scandal, despite announcing that an independent special committee found no evidence of fraud or misconduct on the part of management or the board of directors. See Fortune (subscription required, audio available), “Super Micro’s stock rose 3000% in the AI wave — then its auditor quit, saying it doesn’t trust the management” Also published in Yahoo! Finance, AOL and Wealth Creation Investing.