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Berman Tabacco Announces Investigation of Potential Securities Law Violations By Compass Diversified Holdings (CODI)

1. Berman Tabacco investigates potential securities violations by Compass Diversified Holdings. 2. Compass commenced an internal investigation into Lugano Holding's accounting practices. 3. Irregularities may affect the company's financial statements for 2024. 4. Share prices plummeted over 60% after the announcement, closing at $6.55. 5. Audit Committee is working with outside legal counsel on the investigation.

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FAQ

Why Very Bearish?

The significant drop in share price reflects market fears of serious financial discrepancies, similar to past cases like Enron, where accounting issues led to drastic price declines and loss of investor confidence.

How important is it?

The ongoing investigation and its implications significantly impact investor confidence, making it a critical issue for CODI.

Why Short Term?

Immediate investor panic and potential legal consequences could lead to further price volatility in the short term, as seen in previous corporate scandals.

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LUGANOENRONAUDIT_COMMITTEE
BOSTON, May 09, 2025 (GLOBE NEWSWIRE) -- Berman Tabacco announces that it is investigating potential securities law violations by Compass Diversified Holdings (“Compass” or the “Company”) (NYSE: CODI). About the Investigation On May 7, 2025, after the markets closed, Compass filed a Form 8-K which stated that the Audit Committee of Board of Directors “commenced an internal investigation into the financing, accounting, and inventory practices of Lugano Holding, Inc. (‘Lugano’), a subsidiary and operating segment of the Company, based on concerns reported to Company management as to these practices. Upon being notified of the concerns, Company management immediately informed the Audit Committee, and the Audit Committee promptly retained outside legal counsel to assist in conducting the investigation.”   Compass disclosed that “[t]he investigation, which remains ongoing, focuses on certain unrecorded financing arrangements and irregularities identified in sales, cost of sales, inventory, and accounts receivable recorded by Lugano.” Further, “the Audit Committee concluded that the Company’s consolidated financial statements and other financial information for the fiscal year ended December 31, 2024 should no longer be relied upon due to the materiality of the preliminary findings of the investigation described above.” On May 8, 2025, shares of Compass closed at $6.55 per share, down from its previous close of $17.25 per share, a decline of over 60%. Contact If you would like more information concerning our investigation, please click here: Shareholder Contact | Berman Tabacco or contact us at 800-516-9926 or law@bermantabacco.com. About Berman Tabacco Since 1982, our firm has prosecuted hundreds of securities cases on behalf of investors. The firm and its attorneys have been recognized for their work on behalf of plaintiffs, including by Benchmark Litigation, which ranked the firm as a Top Plaintiffs’ Firm and as Highly Recommended. Chambers USA recognized the firm as a leading securities litigation firm in its Securities Litigation–Mainly Plaintiff category. The Legal 500 has also ranked the firm as recommended in securities litigation. The firm has offices in Boston, Massachusetts and San Francisco, California. This notice may constitute attorney advertising. Past results do not guarantee future outcomes. Jay Eng, Esq.Berman TabaccoOne Liberty SquareBoston, Massachusetts(800) 516-9926Email: law@bermantabacco.com

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