Market Overview

Lumber Liquidators Agrees To $33M Penalty For Securities Fraud

Lumber Liquidators Agrees To $33M Penalty For Securities Fraud

Lumber Liquidators Holdings Inc (NYSE: LL) confirmed Tuesday it will pay a $33 million penalty in exchange for reaching a resolution with multiple government authorities.

What Happened

Lumber Liquidators will pay a fine in the amount of $19.1 million and restitution of $13.9 million, of which up to $6.1 million will be sent to the SEC in disgorgement and prejudgment interests. The penalty will resolve the company's charge of securities fraud in connection to its sourcing of Chinese laminate flooring.

The Department of Justice stated charges against the company are deferred and will be dismissed after three years on condition the company meets certain obligation, many of which Lumber Liquidators says in its press release "has already implemented."

"Lumber Liquidators has undergone a significant transformation in recent years and today is a new company led by an entirely new management team that is committed to our customers, compliance, transparency, and accountability across our organization," the company said.

Why It's Important

Analysts at Stifel said Lumber Liquidators' appearance in a "60 Minutes" segment back in 2015 was the focus of the investigation. Since then, the company has settled multiple legal items, including the multidistrict litigation, securities class action, California Air Resources Board, the Lacey Act and others.

As such, Tuesday's settlement is "positive as it removes a significant uncertainty moving forward," said analysts at Stifel.

Settling with government bodies also allows Lumber Liquidators to better "focus on our customers, great product lines, and our strategic vision," the company's press release said.

The stock traded around $11.12 per share at time of publication, down about 3 percent for the day.

Related Links:

The '60 Minutes' Effect On Stocks

Loop Capital Shelves Lumber Liquidators, Says Street Estimates Could Be Overly Optimistic

Photo credit: Dwight Burdette (Own work), via Wikimedia Commons

Latest Ratings for LL

Jan 2020DowngradesOverweightUnderweight
Nov 2019MaintainsOutperform
Sep 2019MaintainsOutperform

View More Analyst Ratings for LL
View the Latest Analyst Ratings

Posted-In: 60 minutes Flooring retailersAnalyst Color News Legal SEC Analyst Ratings Best of Benzinga


Related Articles (LL)

View Comments and Join the Discussion!

Latest Ratings

YAYOAegis CapitalInitiates Coverage On3.3
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at