CarMax Faces Investigation Over Financial Disclosures

Kahn Swick & Foti, LLC Probes CarMax's Officers and Directors

Mar. 14, 2026 at 2:10am

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Kahn Swick & Foti, LLC, a law firm, has initiated an investigation into CarMax, Inc. (NYSE: KMX) and its officers and directors. This follows CarMax's disclosure of disappointing Q2 2026 financial results, including a 5.4% decrease in retail unit sales, a 6.3% drop in comparable store unit sales, and a 2.2% decline in wholesale units. The company also reported lower net earnings per diluted share and net income compared to the prior year. Additionally, CarMax's CEO unexpectedly departed, and the company provided a weak preliminary Q3 2025 outlook. As a result, CarMax and certain executives have been sued in a securities class action lawsuit for allegedly failing to disclose material information during the Class Period, violating federal securities laws.

Why it matters

The investigation by Kahn Swick & Foti, LLC, a prominent securities litigation law firm, suggests that there may have been potential breaches of fiduciary duties or other legal violations by CarMax's officers and directors. This could have significant implications for the company and its shareholders, potentially leading to legal actions and financial consequences.

The details

Kahn Swick & Foti, LLC, led by former Louisiana Attorney General Charles C. Foti, Jr., is investigating whether CarMax's officers and/or directors breached their fiduciary duties to shareholders or violated state or federal laws. The investigation follows CarMax's disclosure of disappointing Q2 2026 financial results, including a 5.4% decrease in retail unit sales, a 6.3% drop in comparable store unit sales, and a 2.2% decline in wholesale units. The company also reported lower net earnings per diluted share and net income compared to the prior year. Additionally, CarMax's CEO unexpectedly departed, and the company provided a weak preliminary Q3 2025 outlook. As a result, CarMax and certain executives have been sued in a securities class action lawsuit for allegedly failing to disclose material information during the Class Period, violating federal securities laws.

  • On September 25, 2025, CarMax announced its Q2 Fiscal Year 2026 financial results.
  • On November 6, 2025, CarMax disclosed the unexpected departure of its CEO and a weak preliminary Q3 2025 outlook.

The players

Kahn Swick & Foti, LLC

A prominent securities litigation law firm, led by former Louisiana Attorney General Charles C. Foti, Jr., that has initiated an investigation into CarMax.

CarMax, Inc.

A publicly traded used car retailer (NYSE: KMX) that is the subject of the investigation by Kahn Swick & Foti, LLC.

Charles C. Foti, Jr.

A partner at Kahn Swick & Foti, LLC and the former Attorney General of Louisiana, who is leading the investigation into CarMax.

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What they’re saying

“KSF's investigation is focusing on whether CarMax's officers and/or directors breached their fiduciary duties to its shareholders or otherwise violated state or federal laws.”

— Charles C. Foti, Jr., Partner, Kahn Swick & Foti, LLC (PRNewswire)

The takeaway

The investigation by Kahn Swick & Foti, LLC, a prominent securities litigation firm, suggests that there may have been potential wrongdoing or mismanagement at the highest levels of CarMax. This could have significant consequences for the company and its shareholders, potentially leading to legal actions and financial repercussions.