Kehoe Law Firm, P.C. is investigating potential securities fraud claims on behalf of investors of Compass Group Diversified Holdings, LLC, d/b/a Compass Diversified Holdings (“Compass Diversified” or the “Company”) (NYSE: CODI).
Compass Reports Financial Statement Issues; Subsidiary CEO Resigns Amidst Internal Investigation
On May 7, 2025, Compass Diversified reported that in April 2025 its Audit Committee “. . . commenced an internal investigation into the financing, accounting, and inventory practices of Lugano Holding, Inc. (‘Lugano’), a subsidiary and operating segment of the Company, based on concerns reported to Company management as to these practices.”
Compass Diversified further reported that “[o]n May 7, 2025 . . . the Audit Committee concluded that the Company’s consolidated financial statements and other financial information for the fiscal year ended December 31, 2024 should no longer be relied upon due to the materiality of the preliminary findings of the investigation described above. Any previously issued or filed reports, press releases, earnings releases and investor presentations or other communications describing the Company’s consolidated financial statements and other related financial information covering the fiscal year ended December 31, 2024 should also no longer be relied upon.”
Additionally, Compass Diversified reported that “[i]n connection with the ongoing investigation, on May 7, 2025, Mordechai Haim ‘Moti’ Ferder, resigned from his position as Chief Executive Officer of Lugano, and from all offices and directorships previously held with Lugano and its subsidiaries and affiliates.”
On this news, the stock price of Compass Diversified closed down more than 60% on May 8, 2025.
Class Action Filed Against Compass Diversified
On May 9, 2025, a class action complaint alleging violations of federal securities laws was filed against Compass Diversified in United States District Court, Central District of California, on behalf of investors who purchased or otherwise acquired Compass Diversified securities between May 1, 2024 and May 7, 2025, both dates inclusive (the “Class Period”).
The class action lawsuit seeks to recover compensable damages caused by the Compass Diversified Defendant’s alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
To read a copy of the complaint, click Compass Group Class Action Complaint.
Compass Diversified Investors May Have Legal Claims
Investors who acquired Compass Diversified stock 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 for a free, no-obligation evaluation of potential legal claims.
Compass Diversified shareholders can also contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [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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