equinix -- affo manipulation settlement

case overview

the largest data center reit settled a securities class action for $41.5 million after allegations it manipulated its adjusted funds from operations (affo) metric by misclassifying routine maintenance expenses as growth capital expenditures.

Case	Uniformed Sanitationmen’s Assoc. v. Equinix, Inc.
Court	U.S. District Court, Northern District of California
Filed	May 2, 2024
Class Period	May 3, 2019 — March 24, 2024
Settlement	$41.5 million
Per Share	~$2.36 (before deductions)
SEC Investigation	Closed (November 2025, no action)
Status	Settled

allegations

the complaint alleged equinix:

manipulated affo: intentionally misclassified maintenance expenses (including batteries and lightbulbs) as nonrecurring “growth capex,” inflating affo by an estimated 22% in 2023
executive enrichment: the inflated affo qualified executives for stock bonus awards totaling $150 million over five years
oversold power capacity: oversubscribed power capacity at its data centers
inadequate controls: lacked adequate internal controls over financial reporting

catalyst

hindenburg research published a report on march 20, 2024 — “equinix exposed: major accounting manipulation, core business decay and selling an ai pipe dream as insiders cashed out hundreds of millions” — based on interviews with employees, competitors, and industry experts.

the company also faced doj subpoenas and an sec investigation, though the sec formally closed its investigation in november 2025 without recommending further action.

resolution

the case settled for $41.5 million in october 2025, entirely funded by insurance. equinix denied wrongdoing. a separate shareholder derivative lawsuit filed in february 2025 alleging breach of fiduciary duties by the board remains under investigation.

sources

last updated: february 22, 2026