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Compass Diversified (CODI) Plunges 59% as Lugano Unit Probe Reveals Deep Accounting Problems - Hagens Berman

1. CODI stock fell 59% after financial irregularities were disclosed. 2. An internal investigation is underway at the Lugano Holding subsidiary. 3. The investigation revealed inventory irregularities prompting restatement of 2024 results. 4. Lugano's CEO resigned amid the fallout without receiving severance. 5. Hagens Berman is investigating potential violations of U.S. securities laws.

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FAQ

Why Very Bearish?

A 59% drop in CODI's stock indicates severe market loss confidence. Historical examples show similar announcements often lead to prolonged dips in stock value.

How important is it?

The article covers significant regulatory and financial issues affecting CODI's core operations, implying a high likelihood of price impacts.

Why Long Term?

The restatement of financial results and ongoing investigations can result in long-lasting damage to investor confidence and company reputation.

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Firm Investigating Possible Violations of U.S. Securities Laws , /PRNewswire/ -- Compass Diversified (NYSE: CODI), a Westport, Connecticut-based investment firm, saw its stock plunge 59% on Thursday, May 8, after announcing that its 2024 financial statements could no longer be relied upon due to irregularities uncovered at its Lugano Holding subsidiary.  Hagens Berman is investigating potential violations of the U.S. securities laws and urges investors who purchased Compass shares and suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge that may assist the firm's investigation to contact its attorneys. Visit: www.hbsslaw.com/investor-fraud/codiContact the Firm Now: [email protected]                                       844-916-0895 Stock Rout Follows Internal Investigation at Lugano Subsidiary The steep selloff followed the company's disclosure of an ongoing internal investigation into Lugano's financing and accounting practices. The probe, led by outside counsel and a forensic accounting firm, has already identified irregularities in Lugano's inventory and non-Compass financing arrangements. As a result, the company said it would delay filing its first quarter 2025 financial report and restate its 2024 results. Leadership Shake-Up and Corporate Fallout The fallout extended to Lugano's founder and chief executive, Moti Ferder, who resigned from all positions on May 7 and will not receive severance. The probe has already exposed significant irregularities in Lugano's financing and accounting practices, prompting the company to disavow its 2024 financials and acknowledge the need for a comprehensive restatement. "What has been uncovered through the investigation thus far does not reflect who we are as a business and the values we uphold," said Elias Sabo, Compass Diversified's chief executive, signaling both the seriousness of the issues at Lugano and the company's attempt to distance itself from the subsidiary's conduct. Hagens Berman's Investigation Hagens Berman, a national investor rights firm, has launched an investigation into potential securities violations by Compass Diversified, scrutinizing the company's disclosures and practices. "We are carefully reviewing Compass Diversified's recent disclosures and the circumstances surrounding the accounting irregularities at Lugano," said Reed Kathrein, the Hagens Berman partner leading the investigation. "Our focus is on whether shareholders were misled and whether the company's disclosures met their obligations under federal securities laws." Mr. Kathrein, a seasoned litigator in securities and investor fraud cases, has previously led high-profile investigations into corporate governance and financial reporting failures. If you invested in Compass Diversified and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now » If you'd like more information and answers to frequently asked questions about the Compass Diversified investigation, read more » Whistleblowers: Persons with non-public information regarding Compass Diversified should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected]. About Hagens BermanHagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. SOURCE Hagens Berman Sobol Shapiro LLP WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

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