SunPower Shares Slump Amid Financial Misconduct Allegations

(Bloomberg) -- SunPower Corp. tumbled the most in seven weeks after the struggling solar company’s accountant quit amid allegations of misconduct by senior executives. 

The company’s shares slumped as much as 18%, the most intraday since May 15, and were trading at $2.20 at 12:58 p.m. in New York. The company has declined more than 50% this year amid a broader decline in the rooftop solar market.

Ernst & Young notified the company June 27 it was resigning as SunPower’s independent accountant because it was unwilling to be associated with financial statements prepared by management, according to a filing late Wednesday. The accountant cited allegations of misconduct involving senior members of management with roles overlooking financial reporting. SunPower is looking to hire a new independent accountant, according to statement. 

SunPower also said in the filing that it received in February a subpoena from the US Securities and Exchange Commission relating to its revenue recognition practices. The company didn’t respond to inquiries Friday.

The disclosures come amid a challenging year for SunPower. The company said in April it needs to restate almost two years of financial results. It also replaced its chief executive officer and chief operating officer, defaulted on a a credit agreement in late 2023 after an earlier earnings revision that delayed results and is grappling with an installation slump in California — its home state and the country’s biggest solar market.

(Updates with accountant search in third paragraph.)

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