Lumber Liquidators (NYSE:LL) agreed to pay $33 million in penalty to settle the securities fraud charges filed against it by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).
Under its deferred prosecution agreement (DPA) with the DOJ, Lumber Liquidators agreed to pay a criminal fine of around $19 million and $14 million in forfeiture.
Under the terms of its resolution with the SEC, the hardwood flooring retailer agreed to a total of $6,097,298.42 in disgorgement of profits and prejudgment interest. The DOJ agreed to credit the amount of disgorgement paid to the SEC as part of the DPA. Therefore, the total amount of its criminal and regulatory penalties is $33 million.
LL stock price declined more than 6 percent to $10.25 per share on Thursday.
Allegations against Lumber Liquidators
The DOJ and SEC alleged that Lumber Liquidators filed materially false and misleading statement to investors regarding its laminate flooring from China.
In March 2015, an episode from CBS’ 60 Minutes alleged that the company violated health and safety standards based on the fact that its laminate flooring products from China contain a high level of formaldehyde.
