Lumber Liquidators to Pay $33 Million for Securities Fraud Related to Customs Violations
Lumber Liquidators will pay a $33 million penalty for giving investors false statements about the U.S. sale of its laminate flooring from China, according to a March 12 Department of Justice press release. The settlement stems from the underlying issues…
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involved in a 2016 case in which the company allegedly sold flooring that did not meet California Air Resources Board emission standards for formaldehyde (see 1603230014). After the original allegations were levied, and aired in a 2015 "60 Minutes" segment, DOJ said, the company knowingly filed false information with the Securities and Exchange Commission, “broadly denying” the allegations and insisting that it followed regulations. The $33 million in penalties represents the net profits from Lumber Liquidators’ sale of Chinese laminate flooring between January and May 2015, the release said. As part of the settlement, the company also agreed to cooperate with DOJ in its ongoing investigation, and to “implement rigorous internal controls” and “remedial efforts,” including installing new compliance policies and replacing its senior executive management team.