Where there's smoke, there's fire -- Ancient proverb.

The year has started off on a sour note for server specialist Super Micro Computer (NASDAQ: SMCI), commonly called Supermicro. The company makes rack-scale servers packed with high-end artificial intelligence (AI) chips to accelerate AI processing. However, Supermicro is making headlines for another reason today.

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An indictment was unsealed on Thursday, alleging that three people with ties to Supermicro smuggled AI-centric servers to China in violation of U.S. export controls. The indictment charged that Yih-Shyan "Wally" Liaw, Ruei-Tsang "Steven" Chang, and Ting-Wei "Willy" Sun engaged in a conspiracy to use false documents and staged "dummy" servers to illegally ship billions of dollars' worth of servers and graphics processing units (GPUs) to China.

In a statement, Supermicro noted that the company has not been named as a defendant. It also confirmed that Liaw is a co-founder, senior vice president of business development, and a member of the company's board of directors. Chang was a sales manager in Taiwan, and Sun was a contractor. Supermicro said that Liaw and Chang had been placed on administrative leave and the company had terminated its relationship with Sun.

Perhaps most troubling is the fact that this isn't Liaw's first rodeo. The co-founder resigned from Supermicro in 2018 under a dark cloud amid a prior accounting scandal that resulted in the company restating its 2015, 2016, and 2017 financial statements and led to a $17.5 million fine from the Securities and Exchange Commission (SEC). Liaw returned to Supermicro in 2021 as a consultant, was named a senior vice president in 2022, and rejoined the board of directors in late 2023, according to The Wall Street Journal.

Unfortunately, Supermicro has a long track record of getting caught up in scandal:

Now-defunct short-seller Hindenburg Research issued a scathing short report in late 2024 that alleged, among other things, that Supermicro's financials were rife with accounting irregularities, that the company neglected to disclose related-party transactions, and that it had violated U.S. export bans.

The following day, Supermicro announced it would be late in filing its annual 10-K with the SEC, saying it needed more time to review its internal controls over financial reporting -- the process by which it ensures the company is complying with accounting rules and regulations.

Several weeks later, reports surfaced that the U.S. Department of Justice (DOJ) was investigating the company. The investigation was prompted by allegations of accounting impropriety made by a whistleblower.

Supermicro received a letter of noncompliance from the Nasdaq exchange, which could result in delisting, though the company eventually filed its delayed reports and maintained its listing.

Supermicro disclosed that its auditor, Ernst & Young -- one of the world's most prestigious accounting firms -- had resigned in the midst of the company's audit. The auditors cited issues with internal controls over financial reporting.

This latest scandal has all the earmarks of history repeating itself. As a former Supermicro shareholder, I find these recent allegations disappointing but not surprising. Rehiring a former employee (or co-founder) who was allegedly involved in a prior accounting scandal reeks of incredibly poor judgment, which is why I'm no longer a shareholder.

The stock may survive 2026, but I'd respectfully submit there are many more profitable investing options with far less drama than Supermicro.

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Danny Vena, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Super Micro Has Now Faced SEC Probes, Accounting Scandals, and Smuggling Charges -- Can This AI Stock Survive in 2026? was originally published by The Motley Fool