The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of investors who purchased Compass Diversified (“Compass” or the “Company”) (NYSE: CODI) securities between May 1, 2024 and May 7, 2025, inclusive (the “Class Period”). Compass investors have until July 8, 2025 to file a lead plaintiff motion.

What Happened?

On May 7, 2025, after the market closed, Compass disclosed that its financial statements for fiscal year 2024 should no longer be relied upon in response to an ongoing internal investigation into the Company’s subsidiary, Lugano Holding, Inc. The Company revealed that the investigation “has preliminarily identified irregularities in Lugano’s non-CODI financing, accounting, and inventory practices.” Additionally, the Company disclosed that it would delay the filing of its first quarter 2025 10-Q.

On this news, Compass’ stock price fell $10.70, or 62%, to close at $6.55 per share on May 8, 2025, thereby injuring investors.

What Is The Lawsuit About?

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) certain unrecorded financing arrangements and irregularities identified in sales, cost of sales, inventory, and accounts receivable recorded by Compass’ subsidiary, Lugano Holdings, Inc.; and (2) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.