pass Diversified LLC(US:CODI) Prnewswireยท2025-05-16 19:33Core Viewpoint - A securities class action lawsuit has been filed against Compass Diversified Holdings for failing to disclose significant accounting irregularities related to its acquisition of Lugano Holdings, leading to a substantial drop in stock price [1][3][4]. Company Overview - Compass Diversified Holdings is a private equity firm headquartered in Westport, Connecticut, which acquired a majority interest in Lugano Holdings, Inc., a high-end jewelry designer, in 2021 for an enterprise value of $256 million [2]. Lawsuit Details - The lawsuit claims that during the class period from May 1, 2024, to May 7, 2025, Compass did not disclose that Lugano violated accounting rules and that its 2024 financial results were distorted due to these irregularities [3]. - Compass also allegedly failed to implement effective internal controls over its financial reporting [3]. Stock Price Impact - Following the announcement of identified irregularities in Lugano's financial practices on May 7, 2025, Compass's stock price fell by $10.70 per share, a decline of over 62%, closing at $6.55 on May 8, 2025 [4].