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(Sharecast News) - Shares in server maker Super Micro Computer plunged on Friday after its co-founder was arrested for allegedly violating US export controls.
The US attorney's office for the Southern District of New York has issued an indictment claiming Wally Liaw, senior vice president of business development and a board member - along with Steven Chang and Willy Sun - had conspired to smuggle $2.5bn of Nvidia's artificial intelligence chip servers to Chinese customers.
US attorney Jay Clayton said the three did so "through a tangled web of lies, obfuscation and concealment, all to drive sales and generate revenues in violation of US laws". The men alleged faked documents and used dummy equipment to avoid detection.
"Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to US national security," Clayton added.
American citizen Liaw and Sun, who is Taiwanese, were arrested on Thursday in California. The attorney's office said Chang, who is a Taiwan citizen, "remains a fugitive".
In a statement, the California-based firm - which trades as Supermicro - said Liaw and Chang, a sales manager in Taiwan, had both been placed on administrative leave, while its relationship with Sun, a contractor, had been terminated, effective immediately.
It also stressed that Supermicro had not been named in the indictment, noting: "The conduct by these individuals alleged in the indictment is a contravention of the company's policies and compliance controls.
"Supermicro maintains a robust compliance programme and is committed to full adherence to all applicable US export and re-export control laws and regulations."
That did not prevent the shares tumbling, however, and by 1430 GMT they had plunged 28%.
None of the three men have commented on the indictment.
Roman Rozhavsky, assistant director of the FBI's counterintelligence and espionage division, said: "Controlling the export of sensitive US artificial intelligence technology is essential to safeguarding our national security and defending the homeland.
"That's why combating export violations is among the FBI's highest priorities."