SunPower shares fall on financial misconduct allegations

(Bloomberg) — SunPower Corp. posted its biggest drop in seven weeks after the troubled solar company's accountant resigned amid allegations of misconduct by top executives.

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The company's shares fell 18%, the biggest intraday drop since May 15, and were trading at $2.20 as of 12:58 p.m. in New York. The company has lost more than 50% of its value this year amid a broad decline in the rooftop solar market.

On June 27, Ernst & Young informed the company that it was resigning as SunPower’s independent accountant because it did not want to be involved in financial statements prepared by management, according to a filing late Wednesday. The accountant cited allegations of misconduct involving members of management whose roles did not involve financial reporting. SunPower is looking to hire a new independent accountant, the statement said.

SunPower also said in the filing that it received a subpoena from the U.S. Securities and Exchange Commission in February regarding its revenue recognition practices. The company did not respond to requests for comment Friday.

The revelations come amid a struggle for SunPower. In April, the company said it had to reassess nearly two years of financial results. It also replaced its chief executive and chief operating officer, who defaulted on a late-2023 credit agreement after an earlier earnings revision delayed results, and it is grappling with a decline in installations in California, its home state and the nation’s largest solar market.

(Updated with accountant search in third paragraph.)

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