A class action lawsuit has been filed seeking to represent purchasers or acquirers of Compass Diversified Holdings (NYSE: CODI) publicly traded securities between May 1, 2024 and May 7, 2025, inclusive (the “Class Period”).  Captioned Augenbaum v. Compass Diversified Holdings, No. 25-cv-01003 (C.D. Cal.), the Compass Diversified class action lawsuit charges Compass Diversified Holdings, Compass Group Diversified Holdings LLC, Compass Group Management LLC, and certain of Compass Diversified’s top current and former executives with violations of the Securities Exchange Act of 1934.

If you suffered substantial losses and wish to serve as lead plaintiff of the Compass Diversified class action lawsuit, or just have general questions about you rights as a shareholder, please contact attorney Timothy L. Miles of the Law Offices of Timothy L. Miles, at no cost, by calling 855/846-6529 or via e-mail at [email protected].

Lead plaintiff motions for the Compass Diversified class action lawsuit must be filed with the court no later than July 8, 2025.

1. What Are the Allegations in the Compass Diversified Class Action Lawsuit?

On September 7, 2021, Compass Diversified announced the acquisition of a majority interest in Lugano Holdings, Inc., a designer, manufacturer, and marketer of high-end jewelry, in a deal with an enterprise value of $256 million (excluding working capital and certain other adjustments upon closing).

The Compass Diversified class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that:

1. Lugano had violated applicable accounting rules and acceptable industry practices with respect to its financing, accounting, and inventory practices during Compass Diversified fiscal 2024;
2. Lugano’s 2024 financial results had been artificially distorted by these irregularities;
3.  Compass Diversified had failed to implement effective internal controls over Compass Diversified’s financial reporting; and
4. As a result, Compass Diversified’s reported 2024 financial results did not reflect the actual financial results of Compass Diversified and such reported results were materially misstated.

On May 7, 2025 Compass Diversified issued 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.” revealing that Compass Diversified “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.”

Compass Diversified’s release also announced that Compass Diversified intended to delay the filing of its first quarter 2025 Form 10-Q.  On this news, the price of Compass Diversified’s stock fell more than 62%. according to the Compass Diversified class action lawsuit.

2. What Is the Class Period in the Compass Diversified lawsuit?

The class period in the Compass Diversified class action lawsuit is defiled as purchasers or acquirers of Compass Diversified Holdings (NYSE: CODI) publicly traded securities between May 1, 2024 and May 7, 2025, inclusive.

3. What is the Lead Plaintiff Process in the Compass Diversified Class Action Lawsuit?

Under the Private Securities Litigation Reform Act of 1995 (PSLRA):

• Any investor who purchased and suffered losses in Compass Diversified stock may seek appointment as lead plaintiff in the Compass Diversified lawsuit.
• A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class.
• A lead plaintiff acts on behalf of all other class members in directing the class action lawsuit.
• The lead plaintiff can select a law firm of its choice to litigate the securities class action lawsuit.
• An investor’s ability to share in any potential future recovery of the class action lawsuit is not dependent upon serving as lead plaintiff.

4. What Is the Lead Plaintiff Deadline in the Compass Diversified Class Action Lawsuit?

Lead plaintiff motions for the Compass Diversified lawsuit must be filed with the court no later than July 8, 2025. When a securities class action is filed:

1. The person who files the first complaint is required to publish a notice announcing the filing.
2. Anyone who wants to be the lead plaintiff on behalf of the class must thereafter file a motion to be appointed as lead plaintiff(s) no later than 60 days after the notice was published.

5. What Are the Benefits of Serving as a Lead Plaintiff in the Compass Diversified Lawsuit?

1. Negotiating more competitive attorney fees and reducing litigation costs.
2. Managing the litigation by overseeing the progress of the case and reviewing important filings.
3. Participating in mediation and settlement discussions.
4. Having a voice in decision-making processes regarding the settlement.
5. No financial risk, as lead counsel covers all costs and expenses and are paid only if they secure a settlement or judgment recovery for the class
6. Potentially enjoying long-term benefits from governance reform resulting from the litigation.

6. What Are the Responsibilities the Lead Plaintiff Will Have in the Compass Diversified Lawsuit?

1. Selecting, monitoring, and overseeing Lead Counsel.​
2. Reviewing and commenting on court filings on behalf of the class.
3. Discussing litigation strategies with the Lead Counsel.
4. Attending depositions (if necessary) and giving a deposition.
5. Attending hearings (if necessary).
6. Participating in mediation and the trial (if necessary).
7. Provide input on any decision concerning the settlement of the securities class action.

7. What Are the Eligibility Criteria for Lead Plaintiff Appointment in the Compass Diversified Class Action Lawsuit?

To be eligible for appointment as the lead plaintiff in the Compass Diversified Class Action Lawsuit, an investor must meet the following criteria:

1. Securities Acquisition: The investor must have purchased or acquired Compass Diversified Holdings (NYSE: CODI) publicly traded securities between May 1, 2024 and May 7, 2025.
2. Financial Losses: The investor must have suffered financial losses as a direct result of the alleged securities fraud perpetrated by Compass Diversified and its executives.
3. Typicality and Adequacy: The investor’s legal claims must be typical of those asserted on behalf of the class, and they must demonstrate their ability to adequately represent the interests of the entire class through experience, resources, and the absence of conflicts of interest.

It is crucial to note that both domestic and international investors who meet these criteria are eligible to seek appointment as the lead plaintiff in the class action lawsuit, as courts have consistently recognized the rights of non-U.S. investors in securities class actions.

What Are the Legal Requirements for Prevailing in the Compass Diversified Lawsuit?

1. Material Misrepresentation or Omission
2. Scienter
3. Connection to Securities Transaction
4. Reliance
5. Economic Loss
6. Loss Causation