Pomerantz Law Firm Initiates Class Action Against SoundHound AI, Inc.

On May 12, 2025, the Pomerantz Law Firm announced the filing of a class action lawsuit targeting SoundHound AI, Inc. This lawsuit, listed under docket 25-cv-02915 in the United States District Court for the Northern District of California, stems from allegations against SoundHound and its officers. The lawsuit claims that the company and certain executives made materially false and misleading statements regarding the firm's business practices, in violation of federal securities laws.

Background of the Case

The class action encompasses all individuals and entities that acquired SoundHound securities during the specified Class Period, which runs from May 10, 2024, through March 3, 2025. Investors who purchased shares within this timeframe are encouraged to step forward and ask the court to appoint them as Lead Plaintiff by May 27, 2025. The law firm is urging parties interested in the case to reach out to discuss their involvement.

SoundHound AI operates an independent voice artificial intelligence platform aimed at enhancing customer engagement across various industries. Despite its innovative goals, the company has identified notable weaknesses in its internal control systems over financial reporting. Approximately during the relevant periods, SoundHound admitted to insufficient oversight concerning its internal controls and acknowledged that rapid business growth had hampered its ability to adjust its controls to prevent material misstatements in its financial reporting. This dilemma raises alarms about SoundHound's corporate governance and financial integrity.

Allegations of Financial Misconduct

The crux of the lawsuit alleges that SoundHound misrepresented its operational capabilities and financial status to shareholders. Defendants reportedly laid out misleading statements about the extent of their controls against corporate acquisitions, creating a false impression of their financial competency. Specific assertions include claims that the company had adequately addressed the deficiencies in its internal controls and overstated the effectiveness of their remediations. As a result, any goodwill reported following the acquisition of Amelia Holdings, Inc.—which SoundHound acquired for approximately $80 million—was misleadingly inflated.

Furthermore, SoundHound made strategic acquisitions, including SYNQ3, a voice AI provider, for around $15.8 million, that year. However, the class action multitudes that due to existing weaknesses, these acquisitions were not properly accounted for, which undermined the financial statements presented to shareholders.

SoundHound was further scrutinized on March 4, 2025, when the company revealed it would fail to timely file its Annual Report for 2024, citing complexities in accounting for the recent acquisitions. Upon this announcement, the market reacted, causing the stock price to decline by nearly 6%. By March 11, 2025, SoundHound's 2024 10-K filing disclosed severe inadequacies in its financial reporting processes, marking an alarming deviation from the company's previous representations.

Moving Forward

Pomerantz LLP is recognized for its commitment to pursuing justice for victims of corporate fraud and securities misconduct. For investors who have been affected by the situation at SoundHound AI, the firm aims to provide a potential pathway to recover losses incurred due to the alleged violations of securities laws. Individuals interested in joining this class action can reach out for further details on the filing and gain information about their potential involvement.

The firm, established over 85 years ago by the pioneering Abraham L. Pomerantz, retains a strong reputation in the realm of class action lawsuits. Their unwavering legal guidance and strategic litigation efforts have resulted in billions of dollars in damages awarded to aggrieved shareholders in prior cases.

For more information on the class action lawsuit against SoundHound AI, Inc. or inquiries related to the firm’s other legal service offerings, individuals are advised to visit their official website or contact them directly. The pursuit of SEC compliance and shareholder rights has never been more vital as scrutiny over corporate accountability takes center stage in the investment community.