# UNITED STATES OF AMERICA > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3A7e8cd404fa9b0be5 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 91046 / February 3, 2021 ADMINISTRATIVE PROCEEDING File No. 3-19927 In the Matter of SUPER MICRO COMPUTER, INC., Respondent. : : : : : : : NOTICE OF PROPOSED PLAN OF DISTRIBUTION AND OPPORTUNITY FOR COMMENT ADMINISTRATIVE PROCEEDING File No. 3-19928 In the Matter of HOWARD HIDESHIMA, Respondent. : : : : : : : Notice is hereby given, pursuant to Rule 1103 of the United State Securities and Exchange Commission’s (“Commission”) Rules on Fair Fund and Disgorgement Plans (“Commission’s Rules”), 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted to the Commission a proposed plan of distribution (the “Plan”) for the distribution of monies paid in the above-captioned matters. On August 25, 2020, the Commission issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“SMC Order”)1 against Super Micro Computer, Inc. (“SMC”). In the SMC Order, the Commission determined that SMC, a producer of computer servers headquartered in California, 1 Securities Act Rel. No. 10822 (Aug. 25, 2020). engaged in improper accounting—prematurely recognizing revenue and understating expenses from at least fiscal year (“FY”) 2015 through FY 2017. As a result, SMC filed with the Commission materially misstated financial statements in its annual, quarterly and current reports during the period. Also on August 25, 2020, in a related matter, the Commission issued a Corrected Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Hideshima Order”) against Howard Hideshima (“Hideshima”),2 the former Chief Financial Officer of SMC. The Commission determined that Hideshima engaged in improper accounting and caused internal accounting controls failures, which resulted in SMC systematically prematurely recognizing and reporting revenue and understating expenses from at least FY 2015 through FY 2017. The Commission further determined that, from at least FY 2015 through FY 2017, Hideshima signed, and/or approved, annual, quarterly and current reports with the Commission that contained materially misstated financial statements. As a result of the conduct described in the SMC Order and Hideshima Order (collectively, the “Orders”), the Commission ordered SMC to pay a civil money penalty of $17,500,000.00, and Hideshima to pay disgorgement of $260,844.00, prejudgment interest of $40,212.00, and a civil money penalty of $50,000.00 to the Commission. In the SMC Order, the Commission created a Fair Fund (the “Fair Fund”), pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the collected civil penalty could be distributed to investors harmed by the conduct described in the Orders. In the Hideshima Order, the Commission also established a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 and ordered it to be added to the Fair Fund established in the SMC Order, so the collected civil penalty, along with collected disgorgement and prejudgment interest, would be combined into one fund for distribution to investors harmed by the conduct described in the Orders. The Fair Fund is comprised of the $17,851,056.00 paid by SMC and Hideshima, pursuant to the Orders, and has been deposited in an interest-bearing account at United States Department of Treasury's Bureau of the Fiscal Service (“BFS”). The assets of the Fair Fund are subject to the continuing jurisdiction and control of the Commission. All BFS fees will be paid from the Fair Fund. Interest and any additional funds received pursuant to Commission or Court order, agreement, or otherwise will be added to the Fair Fund for disbursement to investors in accordance with the Plan. OPPORTUNITY FOR COMMENT Pursuant to this Notice, all interested persons are advised that they may obtain a copy of the Plan from the Commission’s public website at http://www.sec.gov/litigation/fairfundlist.htm. Interested persons may also obtain a written copy of the Plan by submitting a written request to 2 Exchange Act Rel. No. 89657 (Aug. 25, 2020). The Hideshima Order was corrected from its original form to add the established Fair Fund to the Fair Fund established in the SMC Order for distribution. See Paragraph IV.C. of the Hideshima Order 2 Catherine E. Pappas, United States Securities and Exchange Commission, One Penn Center, 1617 JFK Blvd., Ste. 520, Philadelphia, PA 19103. All persons who desire to comment on the Plan may submit their comments, in writing, no later than thirty (30) days from the date of this Notice: 1. to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090; 2. by using the Commission’s Internet comment form (http://www.sec.gov/litigation/admin.shtml); or 3. by sending an e-mail to rule-comments@sec.gov. Comments submitted by email or via the Commission’s website should include “Administrative Proceeding File Nos. 3-19927 and 3-19928” in the subject line. Comments received will be publicly available. Persons should submit only information they wish to make publicly available. THE PLAN The Net Available Fair Fund3 is comprised of the $17,851,056.00 paid by SMC and Hideshima pursuant to the Orders, plus accrued interest, less amounts expended or reserved for Administrative Costs. The Plan proposes to distribute the Net Available Fair Fund to investors who purchased the Security during the Relevant Period and suffered an Eligible Loss Amount as calculated under the Methodology used in the Plan of Allocation. For the Commission, by its Secretary, pursuant to delegated authority. Vanessa A. Countryman Secretary 3 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan. 3 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A7e8cd404fa9b0be5. Public record. Not legal advice.