Retail flooring giant Lumber Liquidators has agreed to pay a $33 million penalty for making fraudulent misstatements to investors.
The settlement seeks to end its legal problems that began with a CBS report four years ago that they were selling toxic flooring and then, trying to cover it up.
“This means that the company is going to pay $33 million in fines for misstatements to investors about the formaldehyde,” said Carl Tobias, Law professor at the University of Richmond. “A company cannot give misstatements that then lead investors to buy or sell stocks.”
Federal officials said all employees involved in the fraud have either been terminated or resigned. And new management promises transparency and compliance. They will pay $19 million in fines and $14 million more in restitutions.
“This is meant to send a message and the SEC does that quite frequently.”
Lumber Liquidators website says it has stores in 46 states and 1000 employees, with plans to move headquarters to Henrico later this year.