Compass Diversified (CODI) Faces Securities Class Action After Admitting to Accounting “Irregularities” – Hagens Berman

Core Viewpoint - A securities class action lawsuit has been filed against Compass Diversified due to the company's announcement of a restatement of its 2024 financial statements, linked to undisclosed financing arrangements and irregularities in its Lugano business unit [1][4][6] Group 1: Lawsuit Details - The lawsuit, Matthews v. Compass Diversified Holdings, LLC, seeks to represent investors who purchased Compass securities between May 1, 2024, and May 7, 2025 [1][2] - Allegations include false and misleading statements made by Compass regarding its Lugano unit, which operates in the branded consumer goods sector, and the failure to disclose critical information about financing arrangements and irregularities in sales, cost of sales, inventory, and accounts receivable [2][3] Group 2: Financial Impact - The alleged irregularities necessitated a restatement of Compass Diversified's 2024 financial statements, rendering them unreliable [3] - Following the disclosure of these issues, Compass's stock price fell by 60% in a single trading day, resulting in significant losses for shareholders [5] Group 3: Regulatory and Investigative Actions - The lawsuit claims that Compass violated the Securities Exchange Act of 1934 by making untrue statements and omitting material facts [6] - Hagens Berman, a law firm, is investigating potential securities violations by Compass and is encouraging affected investors to come forward [7][8]