Compass Diversified (CODI) Situation Worsens, Admits Accounting Irregularities During 2022 - 2024, Expanded Class Period In Amended Securities Class Action Complaint – Hagens Berman

Core Viewpoint - Compass Diversified (NYSE: CODI) has issued a warning to investors regarding the unreliability of its financial statements for the fiscal years ending December 31, 2022 and 2023 due to expanded accounting irregularities [1][5]. Group 1: Financial Irregularities - The company disclosed that accounting irregularities at its subsidiary, Lugano Holding, have affected financial statements not only for 2024 but also for the fiscal years 2022 and 2023 [4][5]. - Investors are advised to no longer rely on the annual and quarterly financial statements for these years [5]. Group 2: Legal Actions - A class-action lawsuit has been filed against Compass Diversified, seeking to represent investors who purchased its publicly traded securities from February 24, 2022, to May 7, 2025 [3][4]. - The lawsuit alleges that the company made false and misleading statements while failing to disclose critical information regarding its financial practices [6]. Group 3: Market Reaction - Following the announcement of the accounting irregularities, Compass Diversified's stock price fell by more than 62% [7]. Group 4: Internal Controls and Oversight - The company has been criticized for neglecting to implement effective internal controls over its financial reporting, leading to materially misstated financial results [9]. - The issues at Lugano suggest a failure of oversight by Compass Diversified, indicating a deeper problem within the subsidiary [10].