COMPASS DIVERSIFIED SHAREHOLDER ALERT BY FORMER LOUISIANA ATTORNEY GENERAL: KAHN SWICK & FOTI, LLC REMINDS INVESTORS WITH LOSSES IN EXCESS OF $100,000 of Lead Plaintiff Deadline in Class Action Lawsui

Law firm Kahn Swick & Foti has announced a securities class action lawsuit against Compass Diversified Holdings (CODI) on behalf of investors who purchased securities between May 1, 2024, and May 7, 2025. The lawsuit follows Compass Diversified's May 7, 2025, disclosure that its 2024 financial statements required restatement due to irregularities in Lugano Holding, Inc.'s non-CODI financing, accounting, and inventory practices, which led to a 62% stock price decline. Investors have until July 8, 2025, to file lead plaintiff applications.

Analysis

Compass Diversified Holdings (CODI) is currently embroiled in a significant crisis, highlighted by a securities class action lawsuit for which investors have a lead plaintiff application deadline of July 8, 2025, concerning securities purchased between May 1, 2024, and May 7, 2025. The lawsuit alleges that CODI and its executives violated federal securities laws by failing to disclose material adverse information. This legal action stems directly from CODI's announcement on May 7, 2025, that its Audit Committee concluded the company's previously issued financial statements for fiscal year 2024 require restatement and should no longer be relied upon. The root cause is an ongoing internal investigation into CODI's subsidiary, Lugano Holding, Inc., which has preliminarily uncovered irregularities in Lugano’s non-CODI financing, accounting, and inventory practices. Indicative of the severity, Lugano’s founder and CEO, Moti Ferder, resigned from all positions effective May 7, 2025, without receiving any severance compensation. The market's reaction to these disclosures was immediate and severe, with CODI's stock price plummeting approximately 62%, from $17.25 per share on May 7, 2025, to $6.55 per share on May 8, 2025, reflecting deep investor concern over the company's financial reporting integrity, internal controls, and the potential scope of the misstatements.

Key Decisions for Investors

• Investors who purchased Compass Diversified Holdings securities between May 1, 2024, and May 7, 2025, inclusive, should evaluate their legal options concerning the class action lawsuit and the upcoming July 8, 2025, lead plaintiff deadline.
• Extreme caution is warranted for current and prospective investors due to the ongoing internal investigation at Lugano Holding, Inc., the impending financial restatements for fiscal 2024, and the significant uncertainty surrounding CODI's true financial health and internal controls.
• Investors should closely monitor all subsequent disclosures from CODI regarding the findings of the internal investigation, the specific nature and magnitude of the accounting irregularities at Lugano, the details of the restated financial statements, and any further management or governance responses to this crisis.