Lumber Liquidators to Pay $33 Million in Fines for Investor Fraud

Earlier this week, Lumber Liquidators agreed to pay $33 million in fines and forfeiture to the federal government for false public statements in response to media allegations that the company was selling laminate flooring that exceeded California regulatory emissions levels.  Specifically, federal prosecutors alleged that the company had misled investors about its product testing and regulatory compliance programs in responding to the 60 Minutes special that aired in 2015.  As the Securities and Exchange Commission (SEC) states in its announcement of the settlement, Lumber Liquidators at the time “knew that its largest Chinese supplier had failed third-party formaldehyde emissions testing and was unable to produce documentation showing regulatory compliance.”  The SEC also notes that Lumber Liquidators falsely stated that the factory employees in the 60 Minutes report were not its suppliers.  See SEC Announcement and Washington Post article.  More info: Jackson Morrill


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