Data center owner Equinix disclosed it launched an independent investigation to review matters referenced in a recent short seller report that also caught the attention of the Department of Justice.

Equinix announced in a press release Monday the audit committee of its board of directors decided to initiate the probe following short seller Hindenburg Research’s investigative report published Wednesday that accused the company of accounting manipulation.

The company said after the report was published that it received a subpoena from the U.S. Attorney’s Office for the Northern District of California.

“Receipt of these types of inquiries is not unusual in these circumstances, and Equinix intends to fully cooperate in this matter,” the company stated in the release. “The company does not expect to comment further on such matters until appropriate to do so.”

The company added it takes its obligations of transparency and accuracy in financial reporting seriously.

In its report, Hindenburg accused Equinix of boasting artificial intelligence as a boon to business when power consumption costs related to implementing AI could be detrimental to its profitability. Former employees projected the company could struggle to update old facilities to meet new power requirements brought on by the AI revolution.

Hindenburg alleged accounting manipulation since the company became a real estate investment trust in 2015, when it started using adjusted funds from operations as a key metric in determining executive bonuses and allegedly began misclassifying capital expenditures as growth.

Jeff Dale is Managing Editor, Editorial Projects and Analytics, at Compliance Week. He previously served as Compliance Week's Digital Editor and has worked as a copy editor at the Boston Herald and city editor at The Hour Publishing Co. in Norwalk, Conn.View full Profile

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