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On , after the markets closed, Compass filed a Form 8-K, which disclosed that the Audit Committee of the Board of Directors commenced an internal investigation into the financing, accounting, and inventory practices of (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. The Company further 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.
The Company further revealed that , 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. Mr. Ferders resignation constitutes a voluntary termination of his employment for which he will not receive any severance or additional compensation.
Compass also announced that it intends to delay the filing of its Quarterly Report on Form 10-Q for the quarter ended to provide for additional time to complete the investigation. Lastly, the Company disclosed that [a]ny previously issued or filed reports, press releases, earnings releases and investor presentations or other communications describing the Companys consolidated financial statements and other related financial information covering the fiscal year ended should also no longer be relied upon.
Following this news, the price of Compass stock fell per share, or 62%, to close at per share on .
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