The company’s stock price has plummeted over 70% this year, nearing $13 in trading today and a 4-year low.
The California Air Resources Board (CARB) regulates levels of formaldehyde in flooring sold in the state. No other states regulate the cancer-causing chemicals, although the Environmental Protection Agency (EPA) is considering federal limits for the nation.
Controversy erupted in March, when CBS News aired a “60 Minutes” investigation accusing Lumber Liquidators of selling Chinese-made laminate wood flooring with dangerous levels of formaldehyde. According to CNBC:
“Lumber Liquidators says CARB has informed the company that flooring samples obtained in March — after the CBS report — exceeded the state’s limits in preliminary testing.”
Lumber Liquidators is now facing hundreds of lawsuits, class actions, and multiple government investigations. The Justice Department has told the company to expect a $3.2 million fine for selling wood that was illegally logged in Russia, according to the Motley Fool.
The company continues to insist its flooring is safe, but has stopped selling Chinese-made laminate products “for the time being,” according to this week’s regulatory filing. Lumber Liquidators also reported spending $7.2 million on formaldehyde testing for concerned customers, and says about 10% of those kits found unacceptable levels of formaldehyde.