Lumber Liquidators Gets Deferred Prosecution Agreement and Settles SEC Case


A team of white collar attorneys including Rich Morvillo, Ellen Murphy, Scott Morvillo and Liz Marshall Anderson successfully represented Lumber Liquidators in settling DOJ and SEC investigations precipitated by a 60 Minutes segment alleging that Lumber Liquidators laminate flooring imported from China emitted levels of formaldehyde exceeding standards set by the California Air Resources Board. 

The company entered into a deferred prosecution agreement with the U.S. Attorney’s Office for the Eastern District of Virginia and the Department of Justice (DOJ) and simultaneously settled an administrative proceeding brought by the Securities and Exchange Commission. The DPA defers a single count of securities fraud related to the company’s public disclosures about its compliance with the standards set by the California Air Resources Board, including the company’s Form 8-K filing in March 2015 in response to the 60 Minutes episode, for a period of three years, after which the charges will be dismissed assuming the company meets certain obligations many of which the company has already implemented.  The DPA also references the fact the Consumer Product Safety Commission had completed its evaluation of the safety of the company’s laminate flooring in 2017 and determined that no further monitoring was required and closed the case without further action.

We have been representing the client in multiyear, cross-border investigations by the Department of Justice and Securities and Exchange Commission. Our team also included Lauren Seaton, Nicholas Peterson and Brandon McMahon.

This settlement has received a great deal of media attention, including features by The Washington and Global Investigations Review.