Lumber Liquidators didn’t warn its customers it was selling toxic products, but the company did warn Wall Street investors. Lumber Liquidators was well aware of the risks it took dealing with Chinese suppliers. In the latest SEC 10-K filing, Lumber Liquidators thoroughly warned Wall Street investors of the risks inherent in buying stock in the company. (Potentially bad scenarios are listed on every company’s 10K.) Below are some of the warnings Lumber Liquidators gave investors, even as it failed to give ample warnings to its customers. From the Lumber Liquidators 10-K:
“If our suppliers do not use ethical business practices, comply with applicable laws and regulations and ensure that their products meet our quality standards, our reputation could be harmed due to negative publicity and we could be subject to legal risk… their failure to operate in a legal, ethical and responsible manner, could reduce demand for our products… While we do monitor our suppliers’ adherence to such standards, there is no guarantee that we will identify every instance of non-compliance, if any.”
Here is the Lumber Liquidators 10-K “Risk Factors” section.