Cogent Communications Faces Class Action Over Dividend Cuts and Stock Sales

The litigation covers investors who purchased CCOI securities between February 29, 2024, and May 1, 2026. According to the complaint, Cogent repeatedly touted a record of 52 consecutive quarters of dividend growth, even as the company’s financial health deteriorated under high debt loads and acquisition costs. By 2025, the dividend yield had reached 9.2% before the company slashed payouts by 98%.

Beyond dividend instability, the suit addresses the involuntary sale of $82.5 million in pledged company stock. While management reportedly reassured shareholders about the safety of these pledges, lenders triggered margin calls that led to the liquidation of the shares, further destabilizing the stock price. Joseph E. Levi, lead attorney for the firm, argues that shareholders were denied a complete picture of the material risks threatening their investments. Interested parties have until September 21, 2026, to apply for appointment as lead plaintiff in the case.