Lumber Liquidators to Pay $33M for Misleading Investors

Lumber Liquidators, one of the largest flooring retailers in the country, has agreed to pay a $33 million penalty for misleading investors about formaldehyde-laced laminate flooring from China. Under a deferred prosecution agreement, the company will pay a $19 million criminal fine and $14 million in forfeiture, and if it meets its obligations within three years, the U.S. Justice Department will dismiss a charge of securities fraud. The investigation began after a 2015 "60 Minutes" investigation found dangerous levels of formaldehyde in Lumber Liquidators' laminate flooring, which violated California's formaldehyde emission standards for composite wood products that were adopted at the national level. The company has already agreed to pay $36 million in settlements to 760,000 customers who bought the laminate flooring, and it stopped selling the laminate flooring from China in 2015. U.S. Attorney G. Zachary Terwilliger said the company has now "installed experienced executives who have displayed a commitment to building an ethical corporate culture."