(MENAFN- ProactiveInvestors) Trading was halted Monday in Lumber Liquidators (NYSE:LL) after its shares dropped more than 20 percent following a report that the company sold flooring with higher levels of formaldehyde than permitted under California's health and safety standards.
The trading was halted for pending news. The stock had fallen 25 percent to $38.91 before the market opened today.
The TV program "60 Minutes" yesterday reported it tested Lumber Liquidators' flooring in Virginia Florida Texas Illinois and New York for levels of formaldehyde a cancer-causing chemical.
"Out of the 31 samples of Chinese-made laminate flooring only one was compliant with formaldehyde emissions standards. Some were more than 13x over the California limit" according to 60 Minutes.
The investigation used undercover reporters and hidden cameras to show that managers at three factories admitted to using false labeling that made it look like flooring produced for Lumber Liquidators met regulations when it didn’t the program said.
In a response to the allegations Lumber Liquidators said it complies with applicable regulations regarding its products including California standards for formaldehyde emissions.
"These attacks are driven by a small group of short-selling investors who are working together for the sole purpose of making money by lowering our stock price" the Toano Virginia-based company said in an e-mailed statement.
“As recently as late 2014 testing by independent third parties confirmed that 100 percent of the randomly selected cores used in the laminates from the three factories that ‘60 Minutes’ investigated came back as fully safe and compliant with California standards” it added. “We stand by every single plank of wood and laminate we sell all around the country.”
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