The shares of Lumber Liquidators are trading higher today. It is not clear if the rise is due to its announcement regarding a settlement with the U.S. Department of Justice (DOJ) related to its compliance with the Lacey Act, a conservation law that protects plants, fish and wildlife. The stock surged earlier this week after the announcement was made.
The stock price of Lumber Liquidators surged more than 21% to $19.91 per share at the time of this writing, around 1:57 in the afternoon in New York. In fact, the stock climbed as much as $21.74 per share earlier today.
Lumber Liquidators settlement details
Lumber Liquidators signed a settlement agreement with the DOJ’s Environmental and Natural Resources Division in connection with the investigation launched against it on 2013.
The investigation was related to its importation of hardwood flooring products from certain suppliers that are harvesting more timber than their permits in foreign jurisdictions such as Eastern Russia. Lumber Liquidators cooperated with federal authorities in their investigation.
As part of the settlement, Lumber Liquidators agreed to pay $10 million in fines, community service payments and forfeited proceeds. The payments include $7.8 million fine, $880,825 community service contributions, $350,000 for the National Fish and Wildlife Foundation and the Rhinoceros and Tiger Conservation fund, and $969,175 forfeited proceeds.
Lumber Liquidators T also agreed to plead guilty for violating the Lacey Act and a Customs law.According to the company, the settlement agreement includes four misdemeanors related to its violations of the Lacey Act and one felony charge due to the entry of goods using false statements.
Lumber Liquidators also agreed to implement an Environment Compliance Plan to ensure its compliance with the Lacey Act in the future.
Additionally, the company agreed to settle the compliance concerns of the DOJ related to its $3.2 million worth of engineered hardwood flooring, which were suspended for sale in the second quarter of 2015.
The DOJ agreed to accept a $3.2 million payment in lieu of a civil forfeiture and allowed the company to sell the products and keep the proceeds from the sale.
Lumber Liquidators strengthens operations
In a statement, Lumber Liquidators Chairman John M. Presley said, “We are pleased to reach this agreement and resolve a legacy issue related to the Lacey Act.”
He added, “We will continue to focus on strengthening Lumber Liquidators across every area of the organization and executing on our value proposition to improve operational efficiencies and deliver value to our stakeholders.”
On the other hand, Chief Compliance and Legal Officer Jill Witter sad the company invested significant time and resources to strengthen its quality assurance procedures from enhanced protocols to product sample testing.