Kahn Swick & Foti is seeking lead plaintiffs by Sept. 21, 2026 in a securities fraud case against Cogent Communications Holdings, whose shares fell about 29 percent on revelations that its touted optical wavelength backlog was unlikely to convert into revenue. The complaint, filed in Washington, covers purchases from Feb. 29, 2024 to May 1, 2026.
A roughly 29 percent collapse in Cogent Communications Holdings shares has drawn a securities fraud class action over the internet provider's optical wavelength backlog. The suit, pending in the US District Court for the District of Columbia, covers investors who bought stock from Feb. 29, 2024 through May 1, 2026.
"The complaint alleges Cogent and certain executives misrepresented demand for optical wavelength services and the nature of its order backlog," Lewis Kahn, managing partner at Kahn Swick & Foti, said. The firm, whose partners include former Louisiana Attorney General Charles C. Foti Jr., is reminding investors with substantial losses they have until Sept. 21, 2026 to file lead plaintiff applications.
The case, City of Southfield Fire and Police Retirement System v. Cogent Communications Holdings, No. 26-cv-02609, charges that most orders in the company's optical wavelength "backlog" were unlikely to convert to paid orders and that many customers were unable or unwilling to accept delivery. The complaint also alleges Cogent was not on track to hit its revenue and margin targets, lacked the financial capacity to maintain its long-standing dividend, and that founder, CEO and Chairman David Schaeffer faced a material risk of being forced to sell large stock holdings tied to high-risk pledging.
Cracks in the backlog narrative emerged Feb. 27, 2025, when Cogent reported a 20 percent sequential decline in backlog and removed 1,500 orders more than a year old. Disappointing results followed on May 8, 2025 and Feb. 20, 2026, when the company stopped disclosing backlog data. On May 4, 2026, management conceded customers were pushing out wavelength acceptances even as provisioning rose. Hagens Berman Sobol Shapiro has separately filed claims over the same disclosures, with Reed Kathrein leading that investigation.
The litigation adds a legal overhang to a stock already trading near multiyear lows after the collapse. Investors will watch the Sept. 21 lead plaintiff deadline, which determines which firm steers the case, and any further disclosure from Cogent on wavelength demand and its dividend policy.
This article is for informational purposes only and does not constitute investment advice.
