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SOUN.US
id: 1549
SoundHound AI ($SOUN) Misleading Accounting and Internal Controls Case
N.D. California
Court5:25-cv-02915
Case number05/10/2024
Class period Start03/03/2025
Class period End05/27/2025
Lead Plaintiff motion deadline- $SOUN investors filed a claim against SoundHound for misrepresenting the effectiveness of its internal controls and overstating its ability to integrate recent acquisitions.
- After disclosing material weaknesses in accounting and correcting goodwill related to its $80M Amelia acquisition, $SOUN dropped nearly 6%.
Case Details:
Between May 10, 2024, and March 3, 2025, SoundHound promoted itself as a rising leader in conversational AI, making high-profile acquisitions of SYNQ3 in January 2024 and Amelia in August 2024. Executives repeatedly claimed these deals would accelerate growth, position the company as an industry leader, and be smoothly integrated.
Throughout 2024, SoundHound acknowledged some internal control issues but downplayed their severity, assuring investors that remediation efforts were underway. The company’s SEC filings and earnings calls consistently highlighted momentum and synergy from acquisitions, with no indication that accounting for these deals posed risks.
But on March 4, 2025, SoundHound announced it would delay its 2024 10-K, citing complex acquisition accounting and ongoing material weaknesses in financial reporting controls. The next day, $SOUN dropped 5.86%.
A week later, on March 11, 2025, the company revealed that due to these weaknesses, it had overstated goodwill from the Amelia acquisition and made millions in accounting adjustments, including to earnout estimates, tax liabilities, and accounts payable.
Based on these events, $SOUN investors filed a claim against SoundHound, accusing the company of the following:
- It misled investors about their ability to integrate major acquisitions and account for them properly.
- It overstated progress in fixing internal controls, while concealing the true risk of delayed filings and accounting errors.
Considering all the representations, investors believe SoundHound misrepresented its financial integrity to maintain investor confidence and stock value during a critical growth period.
Case Status
Lead Plaintiff Appointment
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Omissions
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
03/04/2025
Filing date
03/28/2025
Lead Plaintiff Deadline
05/27/2025