$Super Micro Computer (SMCI.US)$ has cleared a major hurdle, with its Special Committee's investigation finding "no evidence of misconduct/fraud" involving its management or board.

However, JPMorgan analyst Samik Chatterjee remains cautious, stating that "visibility into compliance" remains low. The analyst maintains an Underweight rating on the stock.

SMCI Investigation – No Fraud But Lapses Exist

The investigation, carried out by Super Micro's Special Committee with support from legal and forensic experts, addressed four critical areas:

1. rehiring practices

2. sales and revenue recognition

3. export controls

4. related-party disclosures

The report concluded that:

• The rehiring of former employees was based on "reasonable business judgment" but showed "lapses around guardrail practices."

• Sales and revenue recognition practices were "fair."

• There was "no evidence that Super Micro tried to circumvent export control regulations/restrictions."

• Related-party transactions were either previously disclosed or would be disclosed shortly.

The findings may have put concerns of outright wrongdoing to rest, but the Committee didn't shy away from recommending governance changes to shore up weaknesses.

Governance Overhaul At SMCI: CFO, Compliance Team In Focus

Super Micro's board has accepted the committee's recommendations, including appointing a new CFO to replace David Weigand, who will stay on until his successor is named. Kenneth Cheung, formerly VP of Finance, has stepped into the newly created role of chief accounting officer. Additional hires include a chief compliance officer and a general counsel.

The company has also committed to "expand and enhance its training programs related to financial controls and compliance processes" while improving governance oversight.

JPMorgan Flags Two Key Concerns

Despite these actions, Chatterjee advises investors to remain cautious. He pointed to two key risks:

1. Whether Super Micro's independent auditor, BDO, will "accept the findings of the Special Committee or decide to undertake their own independent review."

2. Whether Nasdaq will extend the time for Super Micro to regain compliance with listing requirements. The company has already outlined its intention to complete its 10-K and 10-Q filings and return to compliance within the discretionary period available.

For Chatterjee, the company's proactive steps are encouraging, but the road ahead is far from certain. The focus now shifts to execution.

SMCI: Cleared But Under The Microscope

Super Micro's announcement may calm immediate fears, but JPMorgan's concerns over "visibility into compliance" suggest that the company is far from out of the woods.

While investors will welcome the findings of "no evidence of misconduct/fraud," execution of governance reforms and navigating Nasdaq compliance deadlines will determine whether the stock can regain its footing.