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Kirby McInerney LLP Announces Investigation of Claims Against Compass Diversified Holdings (CODI) on Behalf of Investors

1. Compass Diversified Holdings is under investigation for potential securities law violations. 2. An internal investigation was initiated regarding Lugano Holding’s financial practices. 3. Compass's financial statements for 2024 are deemed unreliable due to preliminary findings. 4. CEO of Lugano, Moti Ferder, resigned amid the ongoing investigation. 5. Compass's stock price plummeted approximately 61% following these revelations.

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FAQ

Why Very Bearish?

The significant drop in share price indicates serious investor concerns about compliance and governance. Historical cases, like Enron, show similar stock collapses due to financial misconduct investigations.

How important is it?

The ongoing investigation directly affects financial credibility and investor perceptions of CODI. Such issues often lead to shareholder lawsuits and long-term financial implications.

Why Short Term?

Immediate market reactions suggest significant short-term uncertainty, affecting investor confidence and trading patterns. Past instances of similar corporate investigations show sharp short-term price declines.

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Lugano
NEW YORK, May 08, 2025 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP is investigating potential claims against Compass Diversified Holdings (“Compass” or the “Company”) (NYSE:CODI). The investigation concerns whether Compass and/or certain of its officers have violated the federal securities laws and/or engaged in other unlawful business practices. [LEARN MORE 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.” Further, 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.” Additionally, Compass also disclosed that, “[i]n connection with the ongoing investigation, on May 7, 2025, Mordechai Haim ‘Moti’ Ferder, resigned from his position as Chief Executive Officer of Lugano, and from all offices and directorships previously held with Lugano and its subsidiaries and affiliates.” On this news, the price of Compass fell $10.64 per share, or approximately 61%, from $17.25 per share on May 7, 2025, to close at $6.61 on May 8, 2025. If you purchased or otherwise acquired Compass securities, have information, or would like to learn more about this investigation, contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out the form below to discuss your rights or interests with respect to these matters without any cost to you. [CONTACT US] Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules. ContactsKirby McInerney LLPThomas W. Elrod, Esq.212-699-1180https://www.kmllp.cominvestigations@kmllp.com

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