Robbins LLP is Investigating Allegations that Compass Group Diversified Holdings, LLC (CODI) Had Insufficient Disclosure Controls

Robbins LLP informs stockholders that a class action was filed on behalf of all persons or entities who purchased or otherwise acquired Compass Group Diversified Holdings, LLC (NYSE: CODI) securities between May 1, 2024 and May 7, 2025. Compass is a statutory trust that acquires and manages a group of small and middle-market businesses, including Lugano Holdings, Inc., a designer, manufacturer, and marketer of high-end jewelry.

The Allegations

According to the complaint, during the class period, defendants failed to disclose certain unrecorded financing arrangements and irregularities identified in sales, cost of sales, inventory, and accounts receivable recorded by Compass' subsidiary, Lugano Holdings, Inc.

The complaint alleges that on May 7, 2025, Compass issued an 8-K and attached a press release titled “Compass Diversified Discloses Non-Reliance on Financial Statements for Fiscal 2024 Amid an Ongoing Internal Investigation into its Subsidiary, Lugano Holding, Inc.” In this release, Compass announced that it “has preliminarily identified irregularities in Lugano’s non-CODI financing, accounting, and inventory practices. After discussing with senior leadership and investigators, the Audit Committee of CODI’s Board has concluded that the previously issued financial statements for 2024 require restatement and should no longer be relied upon.”  The release also announced that Compass intended to delay the filing of its first quarter 2025 Form 10-Q. On this news, the price of Compass stock fell significantly, harming investors.  

What Now: You may be eligible to participate in the class action against Compass Group Diversified Holdings, LLC. Shareholders who want to serve as lead plaintiff for the class are required to file their papers with the court by July 8, 2025. The lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation.  You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.