Investing.com -- Shares in Lumber Liquidators Holdings Inc (NYSE:LL) gained nearly 20% on Friday after the U.S. Consumer Product Safety Commission (CPSC) announced that it has concluded a multi-year investigation into whether the company deliberately sold Chinese laminate flooring containing formaldehyde, while also ruling that it is not necessary to order a full recall of the product.
As part of the settlement, Lumber Liquidators has agreed not to resume sales of laminate wood flooring previously imported from China. Lumber Liquidators has also agreed to continue a comprehensive testing program that impacted consumers who purchased the flooring over the last three years. Under the terms of the agreement, Lumber Liquidators did not admit any wrongdoing that a substantial product hazard existed and did not admit that the flooring contained a defect that could create a substantial product hazard, according to a Form 8-K filing with the U.S. Securities and Exchange Commission.
Throughout a comprehensive testing process, Lumber Liquidators examined the air quality in more than 17,000 households and retained third-party certified laboratories to conduct formaldehyde emissions tests for about 1,300 of those consumers' floors, the CPSC said in a statement. The CPSC also determined that none of the floors tested exhibited air quality with formaldehyde above the government's remediation guideline levels.
Lumber Liquidators first came under scrutiny last March after CBS News' magazine 60 Minutes reported that the company sold laminate wood flooring with elevated levels of formaldehyde, a known cancer causing agent. Video footage obtained by 60 Minutes found that the chemical appeared in inexpensive glue used by Chinese factories which sold the flooring to the company.
Shares in Lumber Liquidators closed on Friday at 15.78, up 2.54 or 19.18%.