Class Action Lawsuit Against Compass Diversified Holdings: Key Information for Investors

Class Action Lawsuit Overview

On July 2, 2025, Pomerantz LLP announced the initiation of a class action lawsuit targeting Compass Diversified Holdings (CODI), listed on the NYSE under the symbol CODI. The lawsuit centers on allegations of securities fraud involving several of the company's key officers and directors. This development comes as a precautionary measure for investors who have experienced losses due to supposed illegal business practices within the company.

Key Details and Steps for Investors

Investors who believe they may have been affected are encouraged to reach out to Pomerantz LLP. This can be done through direct communication with Danielle Peyton at [email protected], or by calling 646-581-9980. For those calling toll-free, the number is 888-4-POMLAW, with an extension directly to the investments team at 7980. When contacting them, investors should provide their mailing address, contact number, and the amount of CODI shares purchased.

The critical deadline for interested parties to request appointment as Lead Plaintiff, should they fit the criteria, is July 8, 2025. This timely action is crucial because it can significantly affect an individual’s standing in the lawsuit. Detailed information regarding the complaint and the process can be accessed on the Pomerantz Law Firm's official website: www.pomerantzlaw.com.

Background of the Lawsuit

The class action stems from a troubling announcement by CODI made on May 7, 2025. The company disclosed a non-reliance on its financial statements for the fiscal year 2024 due to an ongoing internal investigation concerning its subsidiary, Lugano Holding, Inc. According to the press release, concerns were raised regarding the financial practices employed by Lugano, especially pertaining to how it financed its inventory.

The Audit Committee at CODI reacted promptly, launching an internal investigation into these practices. It is reported that early findings from this investigation have revealed irregularities in the accounting and financing approaches used by Lugano, leading to the conclusion that the previously issued financial statements for 2024 need to be restated. Consequently, investors were cautioned against relying on these documents, raising alarm bells regarding the integrity of CODI’s reporting.

As a direct result of this disclosure, CODI's stock witnessed a drastic decline, plummeting by $10.70 per share, a staggering 62.03% loss and bringing its closing price down to $6.55 per share by May 8, 2025. This sharp drop signifies a troubling turn for shareholders, many of whom are now grappling with substantial financial losses due to the unfolding events.