The Gross Law Firm notifies investors that a class action has commenced in the United States District Court for the Central District of California on behalf of shareholders of Compass Group Diversified Holdings, LLC who purchased securities between May 1, 2024 and May 7, 2025.
According to the complaint, throughout the class period, defendants failed to disclose to investors that Compass lacked effective internal controls over its financial reporting; that Compass failed to disclose critical information regarding Lugano Holding, Inc. (“Lugano”) which kept undisclosed financing arrangements and exhibited irregularities in its sales, cost of sales, inventory and accounts receivable; and that, as a result of the foregoing, defendants’ positive statements about the Company’s financial reporting were materially misleading. The truth emerged on May 7, 2025, after the market closed, the Company announced that its financial statements for fiscal 2024 could no longer be relied upon due to an ongoing internal investigation into its subsidiary, Lugano. Specifically, Compass reported that its Audit Committee launched an investigation over “concerns about how Lugano was potentially financing inventory.” The Company also announced that it intends to delay the filing of its first quarter 2025 Form 10-Q. Further, effective May 7, 2025, Lugano’s founder and CEO, Moti Ferder, resigned from Lugano and will not receive any severance compensation. Following this news, the price of Compass’ common stock declined dramatically. From a closing market price of $17.25 per share on May 7, 2025 to $6.55 per share on May 8, 2025.
If you wish to choose counsel to represent you and the class, you must apply to be appointed lead plaintiff and be selected by the Court. The lead plaintiff will direct the litigation and participate in important decisions including whether to accept a settlement for the class in the action. The lead plaintiff will be selected from among applicants claiming the largest loss from investment in the respective securities during the class periods. Members of the class will be represented by the lead plaintiff and counsel chosen by the lead plaintiff. No class has yet been certified in the above action. Appointment as Lead Plaintiff is not required to partake in any recovery.
Shareholders have until July 8, 2025 to request that the court appoint them lead plaintiff.
To receive more information, please fill out the form.
