Lumber Liquidators to pay $33 million for allegedly lying to investors about laminate flooring

By Marian Johns | Mar 19, 2019

WASHINGTON (Legal Newsline) — Lumber Liquidators has agreed to a $33 million settlement for allegedly making false statements to investors relating to the sale of laminate flooring from China.

According to a U.S. Department of Justice March 12 news release, Lumber Liquidators agreed to a deferred prosecution agreement (DPA) stemming from charges by the Eastern District of Virginia that the company committed securities fraud by knowingly filing false and misleading information to investors.  According to the Department of Justice, Lumber Liquidators denied allegations made in a March 2015 60 Minutes piece, saying the flooring product retailer complied with California Air Resources Board (CARB) regulations. 

“Lumber Liquidators lied to investors and to the public about its compliance with formaldehyde regulations for the flooring it sold – all to protect its stock price,” DOJ Assistant Attorney General Brian Benczkowski said in a statement.  

“False and misleading financial reports undermine the integrity of our securities markets and harm investors.  The department and our law enforcement partners are committed to doing everything we can to ensure that those who commit securities fraud are held accountable.”

Lumber Liquidators' criminal penalty fee includes a criminal fine of about $19 million and $14 million in forfeiture. The DPA includes Lumber Liquidators' deferred prosecution of securities fraud for three years in order to allow the company "to demonstrate goodwill," the Department of Justice said. 

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