LUMBER LIQUIDATORS HOLDINGS INC
LL
Consumer Discretionary
2
exclusion reasons
2 themes
This page is part of our public exclusion list — a transparency tool that shows which companies we screen out and why. It is not investment advice, and it is not an accusation. But it is subject to change as our understanding of the facts evolves.
Lumber Liquidators Holdings Inc. has a documented pattern of significant regulatory violations across multiple domains, culminating in federal criminal and civil penalties. In 2016, the company was sentenced in federal court for illegal importation of hardwood flooring, paying over $13 million in criminal fines and community service payments for violating the Lacey Act by importing timber illegally harvested in Russian habitats of the Siberian tiger and Amur leopard.
This pattern of compliance failures extended to securities fraud. In 2019, the Securities and Exchange Commission charged Lumber Liquidators with making fraudulent misstatements to investors regarding the regulatory compliance of its products. The company settled these charges, agreeing to pay a total of $33 million in criminal and regulatory penalties for filing a materially false statement. The SEC order documented that the company falsely claimed its fiberboard core manufacturers were all certified by the California Air Resources Board (CARB) and that it had documentation to prove regulatory compliance when it did not.
These repeated, serious violations—spanning environmental protection laws and securities regulations—demonstrate a systemic disregard for legal compliance that harmed investors, endangered protected species, and damaged public trust.
Lumber Liquidators Inc. pleaded guilty in federal court in October 2015 to environmental crimes related to its illegal importation of hardwood flooring. The company knowingly imported wood sourced from the last remaining habitat of the Siberian tiger in Russia, a direct violation of the U.S. Lacey Act, which bans trafficking of illegally sourced wood products. In February 2016, the company was sentenced for these crimes and agreed to pay more than $13 million in fines, forfeiture, and community service. A separate investigation by the California Air Resources Board resulted in a $2.5 million settlement in March 2016 for clean air violations related to formaldehyde emissions from its flooring products.
Research Sources
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Companies appear on our exclusion list based on our investment judgment — not because they've done anything illegal. This is a difference of values and opinion, not an accusation of wrongdoing. Exclusion does not constitute a recommendation against investing in any company, and absence from the list does not constitute a recommendation to invest.
This information is provided for educational and transparency purposes only and should not be relied upon as investment advice. Data is drawn from independent watchdogs, NGOs, government registries, and Ethical Capital's ongoing research — see Research Sources for the full list.
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