Lumber Liquidators to pay $33 million for securities fraud

Lumber Liquidators to pay $33 million for securities fraud

RICHMOND, VA (WWBT) - Lumber Liquidators Holdings, Inc. will pay $33 million for a false statement to investors in regards to the sale of laminate flooring from China to U.S. customers.

“This resolution holds Lumber Liquidators accountable for misleading the investing public,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia.

“It also recognizes that the company has cooperated with the government’s investigation, completely replaced its senior executive team, and installed experienced executives who have displayed a commitment to building an ethical corporate culture. We will continue to ensure that market participants can trust information communicated by public companies when making investment decisions."

Lumber Liquidators knowingly filed a false statement to investors broadly denying the allegations featured in a March 2015 episode of 60 Minutes.

The company also said they 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,” said Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division. “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.”

The combined amount of criminal and regulatory penalties amount to a total of $33 million.

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