SoundHound AI Stock – SOUN
Kehoe Law Firm, P.C. is investigating potential securities fraud claims on behalf of investors of SoundHound AI, Inc. (“SoundHound AI” or the “Company”) (NASDAQ:SOUN).
Class Action Lawsuit Filed Against SoundHound AI
On March 28, 2025, a class action lawsuit alleging violations of the federal securities laws was filed against SoundHound AI in United States District Court, Northern District of California (Case No. 5:25-cv-02915).
The securities class action lawsuit was filed on behalf of SoundHound AI investors who purchased or otherwise acquired their securities between May 10, 2024 and March 3, 2025, both dates inclusive (the “Class Period”).
The class action seeks to recover damages caused by the SoundHound AI Defendants’ alleged violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
SoundHound AI Investors May Have Legal Claims
SoundHound AI investors who acquired their securities during the Class Period are encouraged to complete Kehoe Law Firm’s Stockholder Information Request form or send us a message to contact an attorney to discuss the class action lawsuit and receive a free, no-obligation evaluation of potential legal claims.
SoundHound AI shareholders can also contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected].
SoundHound AI Reports Delay in Filing Its Annual Report on Form 10-K
On March 4, 2025, SoundHound AI investors filed a Notification of Late Filing (Form 12b-25) with respect to its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
SoundHound AI stated that it “. . . has determined that it is unable to file the Form 10-K without unreasonable effort or expense. As previously disclosed, the Company has identified material weaknesses in its internal control over financial reporting. These material weaknesses continue to exist as of December 31, 2024.”
On this news, SoundHound’s stock price dropped during intraday trading on March 4, 2025, closing down almost 6%.
SoundHound AI Files Its Annual Report and Identifies Material Weaknesses in Its Internal Control Over Financial Reporting
In its March 11, 2025 Annual Report on Form 10-K, SoundHound AI stated that it “identified material weaknesses in internal control over financial reporting as of December 31, 2024” and “did not maintain an effective control environment as it lacked sufficient oversight of activities related to its internal control over financial reporting due to a lack of appropriate level of experience and training commensurate with its financial reporting requirements.”
The Company also reported that “due to rapid business growth, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement to financial reporting, which resulted in the Company, including the SYNQ3 and Amelia entities which were acquired during 2024, not designing and maintaining effective controls related to substantially all accounts and disclosures.”
SoundHound AI’s Identified Material Weaknesses
In its Annual Report, SoundHound AI disclosed that the material weaknesses contributed to the following additional material weaknesses as of December 31, 2024:
- SoundHound AI did not design and maintain effective controls related to the identification of and accounting for certain non-routine, unusual or complex transactions, including the accounting for complex financing transactions and acquisitions.
- The Company did not design and maintain effective controls to verify appropriate segregation of duties, including assessment of incompatible duties, identification of instances where incompatible duties were assigned to an individual, and addressing conflicts on a timely basis.
- SoundHound AI did not design and maintain effective controls over certain information technology general controls over information systems that are relevant to the preparation of the Company’s financial statements.
- Specifically, SoundHound AI reported that it did not design and maintain: (i) user access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to appropriate personnel; (ii) program change management controls to ensure that program and data changes are identified, tested, authorized and implemented appropriately; and (iii) computer operations controls to ensure that processing and transfer of data, and data backups and recovery are monitored.
Further, SoundHound AI reported in its 10-K that “the material weaknesses could result in misstatements to substantially all of our accounts and disclosures that would result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or detected.”
SoundHound AI Investors – Learn More About Your Legal Options
Again, SoundHound AI investors who acquired their securities during the Class Period and want to learn more about the class action are encouraged to complete Kehoe Law Firm’s Stockholder Information Request form. You can also send us a message or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected].
About Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action firm dedicated to protecting investors and consumers from fraud and misconduct. Our attorneys have served as Lead or Co-Lead Counsel in major securities cases, recovering over $10 billion for institutional and individual investors.
Our firm litigates securities fraud, fiduciary breaches, unfair mergers and acquisitions, and antitrust violations, while also representing whistleblowers and advocating for victims of data breaches, consumer fraud, vehicle and product defects, employment law violations, retirement plan mismanagement, and other corporate and business misconduct. With a results-driven approach, we pursue justice and substantial recoveries for those we represent.
Kehoe Law Firm’s class action legal services are provided on a contingency-fee basis, meaning clients are not responsible for any fees or litigation expenses.
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