Lumber Liquidators To Pay $33 Mln In Fine SEC, DOJ For Misleading Investors

(RTTNews) - The Securities and Exchange Commission Tuesday announced charges against Lumber Liquidators Holdings Inc. (LL) for making fraudulent misstatements to investors.

The charges are related to Lumber Liquidators' false public statements in response to media allegations that the company was selling laminate flooring that contained levels of formaldehyde exceeding regulatory standards.

Lumber Liquidators agreed to pay more than $33 million to settle the SEC action as well as a parallel criminal action filed by the Justice Department's Fraud Section and the U.S. Attorney's Office for the Eastern District of Virginia.

"Pressured by negative publicity, Lumber Liquidators misled investors about its product testing and regulatory compliance programs," said Marc P. Berger, Director of the SEC's New York Regional Office. "The relief obtained today, along with the criminal fine imposed by the Department of Justice, ensures that the company will forfeit all profit and pay a heavy price for the false assurances it provided to the market."

Lumber Liquidators' consented to the SEC's charges that it made false public statements in response to a "60 Minutes" news program episode that showed undercover video of Lumber Liquidators' suppliers stating that they provided the company with laminate flooring that contained levels of formaldehyde exceeding regulatory standards.

In response, Lumber Liquidators fraudulently informed investors that third-party test results of its flooring products proved compliance with formaldehyde emissions standards and that it had discontinued sourcing materials from suppliers that were unable to meet these standards.

In reality, Lumber Liquidators knew that its largest Chinese supplier had failed third-party formaldehyde emissions testing and was unable to produce documentation showing regulatory compliance.
See also:
Leave a comment
  • Latest
  • Read
  • Commented
Calendar Content
«    Май 2019    »