Super Micro Computer (NASDAQ:SMCI) shares fell about 6% in New York trading Tuesday following the release of a critical report by short seller Hindenburg Research.

The research firm highlighted several concerns regarding the company's accounting practices and corporate governance, which could raise red flags among investors and shareholders.

SMCI, a server maker valued at $35 billion, has been under scrutiny since a 2018 delisting from Nasdaq for not filing financial statements. Despite a $17.5 million settlement with the SEC in August 2020 for accounting violations, Hindenburg said the company resumed questionable practices shortly thereafter.

Allegations include improper revenue recognition and rehiring executives involved in past accounting scandals.

"Less than 3 months after paying a $17.5 million SEC settlement, Super Micro began re-hiring top executives that were directly involved in the accounting scandal, per litigation records and interviews with former employees," it is said in the short report.

Further issues pointed out by Hindenburg Research involve Super Micro's relationships with related parties.

Super Micro CEO Charles Liang's brothers reportedly control suppliers Ablecom and Compuware, which have been paid $983 million over three years. These relationships, described as circular, involve transactions that are not fully disclosed and pose risks to revenue recognition and reported margins, according to Hindenburg.

Super Micro's integrity was also questioned in its dealings with sanctioned countries. Despite a guilty plea for exporting banned components to Iran in 2006 and assurances of compliance with U.S. export bans to Russia following the Ukraine invasion, the report suggests exports to Russia have increased, potentially violating sanctions.

The report also cites competition and quality issues leading to the loss of key customers. Major companies like Nvidia (NASDAQ:NVDA), CoreWeave, and Tesla (NASDAQ:TSLA) have reduced their reliance on Super Micro, opting for competitors like Dell (NYSE:DELL).

Customer service and product reliability issues have further tarnished the company's reputation, with some clients reportedly experiencing high malfunction rates and service problems.

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