SoundHound AI Investors Encouraged To Pursue Class Action Lawsuit Against The Company

SoundHound AI Investors Urged to Consider Class Action Lawsuit

In a significant development, Robbins Geller Rudman & Dowd LLP has recently announced that investors who purchased or acquired SoundHound AI, Inc. (NASDAQ: SOUN) securities between May 10, 2024, and March 3, 2025, are given a vital chance to step forward as lead plaintiffs in a class action lawsuit. This legal action is filed in the Northern District of California, under the case caption Liles v. SoundHound AI, Inc.

Understanding the Legal Situation

The class action lawsuit accuses SoundHound AI and its senior executives of breaching the Securities Exchange Act of 1934 by failing to maintain accurate financial reporting mechanisms. Investors who suffered substantial financial losses during the specified class period have the opportunity to represent their interests by applying to lead this important legal endeavor. The deadline for potential lead plaintiffs to register is set for May 27, 2025.

Allegations Against SoundHound

The allegations initiated by the lawsuit indicate that during the class period, the defendants allegedly made misleading statements regarding the company's internal controls over financial reporting. The lawsuit outlines numerous grievances, including:

1. Material Weaknesses: SoundHound reportedly had significant weaknesses in its internal controls that hindered effective accounting for corporate acquisitions.
2. Misrepresentation of Remediation: The lawsuit suggests that the company overstated its ability to remedy these weaknesses.
3. Inflated Goodwill: After acquiring Amelia Holdings, SoundHound's reported goodwill may have been improperly inflated, necessitating a future corrective action.
4. Timing Issues: Anticipated delays and additional expenses for accounting certain acquisitions were allegedly not communicated. These concerns raised the likelihood that the company would be unable to file timely financial reports with the U.S. Securities and Exchange Commission.

The situation escalated when SoundHound publicly announced on March 4, 2025, that it would not be able to submit its 2024 annual report within the anticipated timeline. This disclosure noted complexities in accounting for previous acquisitions, a factor which led to a near 6% drop in stock prices following the announcement.

The Role of a Lead Plaintiff

The Private Securities Litigation Reform Act of 1995 provides any investor who purchased SoundHound securities during the class period the ability to apply as lead plaintiff. A lead plaintiff is typically an investor with the largest financial stake in the outcome of the lawsuit, representing the entire class. This position grants them the authority to choose the legal representation for the case.

Importantly, being appointed lead plaintiff is not a necessity for investors to partake in any potential recovery resulting from the class action. The process is designed to ensure that those with significant interest can steer the legal proceedings.

About Robbins Geller Rudman & Dowd LLP

Robbins Geller Rudman & Dowd LLP stands as one of the preeminent law firms in the world focusing on investor representation in securities fraud and shareholder litigation. This firm has been recognized as a leader in the field, securing significant monetary relief for investors in numerous class action cases. In the previous year alone, they successfully recovered over $2.5 billion on behalf of investors, reflecting their capability and dedication in representing the financial interests of shareholders.

For stakeholders of SoundHound AI, this class action offers an essential pathway to address concerns raised during a tumultuous investing period. Investors wishing to participate or learn more can contact Robbins Geller via their website or reach out directly to attorneys J.C. Sanchez or Jennifer N. Caringal at 800/449-4900.

With a looming deadline for lead plaintiff applications, affected investors are encouraged to take prompt action to safeguard their rights and interests in this unfolding legal scenario.