Story on Lumber Liquidators

[Scott Hearn]

The prices of having stuff made in China is starting to go up because workers are demanding better pay and better working conditions. In some of the larger Chinese cities they are starting to realize just how much pollution lax regulations is causing. Some companies are moving production back to the USA or not going to China at all because the cost difference isn't as great anymore. Turnaround times in the USA are much faster in most cases. Some companies that manufacture in the USA want to buy all their parts in the USA if they can. There is some hardware that nobody makes in the USA anymore. It has to be bought overseas unless someone wants to have a custom order done at high cost.

I read something recently that there are basically no tanneries left in the USA. The environmental regulations here cost too much to comply with. Animals are killed here and their hides are sent overseas for tanning and then back here to be made into goods, or just as often the hides are made into goods overseas and then shipped back here.

The items that are no longer made in the USA are staggering in number. Just try to find a table saw that's completely manufactured (machined in the U.S. from U.S. materials and assembled) here. There be be a few, but they aren't made for the consumer market.

[Mike Henderson]

That's not what the story was Mike. The story wasn't about whether they were CARB compliant. That was mentioned, yes, but the story was based around the fact that they were poisoning millions of families, knowingly, and for profit.

My point is that so far, we've not seen one single case of that happening.

The story wasn't about simply not being CARB compliant, it was about poising millions of homes and all the horrific damage was being done to people.

I don't care about what the story was about and I wonder why you care about it. The financial and criminal risk to the company is simply whether they were selling product that was CARB compliant or not.

The story has run and nothing you or I do is going to change that. Let it go.

Mike

[Todd Willhoit]

I don't care about what the story was about and I wonder why you care about it.

You must care, you are the OP.

Some of us are interested because it smells of stock market manipulation and dirty money.

[Mike Henderson]

You must care, you are the OP.

Some of us are interested because it smells of stock market manipulation and dirty money.

I am interested in the story because of the allegations of selling non-CARB compliant product and the possible resulting financial and criminal sanctions that the company may face. The sensational aspects of the story that may have been in the story (I didn't see the program) are not of interest to me because I know that those shows do such things to boost their ratings.

The important question is whether the company sold non-compliant material, and only testing by independent labs, to the testing standards set by the CARB, will establish that.

Regarding any questions of stock manipulation, truth is the ultimate defense. If the material tests show that the product did not meet the CARB standards there would be no question of manipulation. Do you really think that some investors could get a national "news" program to produce a show that was patently false?

Why don't we all wait until we see the results of the tests?

Mike

[Perhaps you feel that the people who first discovered the possible selling of non-CARB product should have alerted the authorities and not shorted the stock first. While that might have been a noble approach to the issue, they were under no legal obligation to handle it in that fashion. The information they had was developed by them so it was not insider information. This is in contrast to a situation where an employee learns that the profits of the company are not going to be good this quarter so s/he goes out and shorts the stock prior to the announcement. That person is acting on insider information. They would not have that information except for their position in the company and their ability to access non-public information.]

[Jim Matthews]

Are you questioning the Federal standards on pollutants, again - as a moderator?

[Pat Barry]

It seems to me the guy was manipulating the stock and he did it in a creative way and now he should be going to a federal penitentiary in a creative way. All the rest of this is just noise.

[Scott Shepherd]

Are you questioning the Federal standards on pollutants, again - as a moderator?

Seriously? Where has anyone, including myself said that the Federal pollution standards are too tight? I certainly haven't said it. Please, don't try and paint me into the "Wants dirty air and water" character.

I thought this was a discussion, I didn't realize it was all settled. I thought it was interesting to me, at least, that so far, there's been zero confirmed cases of the materials actually violating the CARB standards. You have the test results from the news story, which is bizarre, that the person commenting on it didn't even see the news story, but outside of that news story, which was prompted by a person that had a vested interest in the stock going down, there hasn't been any mention of anyone that's found one board of non CARB compliant material. Not one. So a major story breaks on how non compliant their products are and we still haven't seen one non compliant board show up in a customers house?

Again, for the third time, that might all change, but so far, at this point in time, we're at ZERO. That number might go to 1,000,000. If so, then the story was true and they should pay for their actions.

I found that interesting. If you didn't, that's okay too, just move on and read another post, but to suggest that one shouldn't be able to post because this topic is settled is not correct.

[Pat Barry]

All this talk about the CARB standards has me wondering what the CARB standards (for formaldehyde) really are. Who actually has the info on the CARB and Federal standards related to the supposed violation?

[Mike Henderson]

It seems to me the guy was manipulating the stock and he did it in a creative way and now he should be going to a federal penitentiary in a creative way. All the rest of this is just noise.

Of course, being legally creative is what the financial people do. If you want to get really incensed, read about some the legal tax avoidance schemes that the tax lawyers come up with. That will really get you going.

Mike

[John Huds0n]

You can read one of the actual lawsuits here
https://consumermediallc.files.wordp..._complaint.pdf

I think it is interesting - one of the responses from Lumber Liquadators: (note - it is not their fault they were purchasing these products cheaper than anyone else and they didn't know why they were getting such a good deal...)

“While our suppliers agree to operate in compliance with applicable laws and regulations, including those relating to environmental and labor practices,
we do not control our suppliers.
Accordingly, we cannot guarantee that they comply with such laws and regulations or operate in a legal, ethical and responsible manner Violation
of environmental, labor or other laws by our suppliers or their failure to operate in a legal, ethical and responsible manner, could . . . expose us
to legal risks as a result of our purchase of product from non-compliant suppliers.”

[Scott Shepherd]

You can read one of the actual lawsuits here
https://consumermediallc.files.wordp..._complaint.pdf

I think it is interesting - one of the responses from Lumber Liquadators: (note - it is not their fault they were purchasing these products cheaper than anyone else and they didn't know why they were getting such a good deal...)

That's a class action lawsuit. It's based on the 60 minutes piece. It pulls quotes directly from the tv show. I liked the part where they said in the complaint "One internet user said their son couldn't walk on the floor without getting blisters". Really? We're now quoting comments from the internet without confirmation of the actual person existing?

Then the listed person in there said he installed it in March and in May, someone in the family started sneezing, itching, etc. When taken to the doctor, the doctors couldn't determine the cause. Really? So if I buy a new car, and 2 months later, my eyes are watering and I go to the doctor and he says "I don't know what's causing it", then that means I get to sue the car manufacturer?

I'm still not seeing any documentation of one single case where it's been measured to be outside of CARB standards in someone's house.

Maybe it's just going to take more time, which I'm fine with giving, but apparently this has been going on for 2 years or more, and there's not one documented case of it exceeding the carb standards in someone's house?

[Mike Henderson]

I'm still not seeing any documentation of one single case where it's been measured to be outside of CARB standards in someone's house.

The CARB standards are not measurements in someone's home. It's a specific test protocol that the product needs to pass. And in the complaint John posted earlier, they allege that some group tested LL product in 2013 (IIRC) and found it did not pass. That group sent the test results to LL so LL was put on notice that their product did not meet CARB requirements. I believe the complaint said that the case from that testing is still pending. I don't remember everything from the complaint - I only skimmed it.

Legal things like this do not move at the "sound bite" pace of news media. Tests will be made, the results will be contested by one side or the other, and then more test will be done. It's going to take years before this is resolved.

Remember, the question is whether the product meets the CARB standards, not whether the level of formaldehyde is excessively high in any home. The levels of formaldehyde in homes is irrelevant to the situation LL finds themselves in.

Mike

[Todd Willhoit]

The sensational aspects of the story that may have been in the story (I didn't see the program) are not of interest to me because I know that those shows do such things to boost their ratings.

The important question is whether the company sold non-compliant material, and only testing by independent labs, to the testing standards set by the CARB, will establish that.

...

[Perhaps you feel that the people who first discovered the possible selling of non-CARB product should have alerted the authorities and not shorted the stock first. ]

If you are saying that the selling of products that are "possibly" non-CARB is sensational, then we agree 100%. However, in real life we deal with whether they are actually CARB or non-CARB. If it is only "possible" at this point, and prior complaints are still pending, then this thread should have died long ago without supporting facts. Everything is speculation.

Note that the complaint also states, "Similar products tested from Lumber Liquidators’ competitors also showed significantly lower formaldehyde levels that generally complied with the CARB formaldehyde emission standards." Either they comply or they don't. Who is the next competitor on the chopping block?

We also don't know who actually performed and paid for the prior testing. Was it truly independent?

Legal things like this do not move at the "sound bite" pace of news media.

Legal things do, but the market doesn't. That is why we should wait for some solid facts before LL becomes everyone's punching bag and all of the other investors take a hit. I wonder if anyone here has exposure directly or through a mutual find?

What about the "investors" shorting the stock? Are they "possibly" crooks? Is this a single play? Is shorting a stock and making accusations about an infraction the standard MO? Only time will tell.

I am interested in the story for two reasons: I, like you, care about our planet, and I also care about corruption in the US financial system. It appears certain that someone is gaming (my definition) our financial system by bashing a stock they have shorted. I haven't read everything, but that is the only fact I have read so far.

[Jerome Stanek]

Don't auto makers sell cars that are not Carb certified in states that don't use Carb

[Brian Holcombe]

If you are saying that the selling of products that are "possibly" non-CARB is sensational, then we agree 100%. However, in real life we deal with whether they are actually CARB or non-CARB. If it is only "possible" at this point, and prior complaints are still pending, then this thread should have died long ago without supporting facts. Everything is speculation.

Note that the complaint also states, "Similar products tested from Lumber Liquidators’ competitors also showed significantly lower formaldehyde levels that generally complied with the CARB formaldehyde emission standards." Either they comply or they don't. Who is the next competitor on the chopping block?

We also don't know who actually performed and paid for the prior testing. Was it truly independent?



Legal things do, but the market doesn't. That is why we should wait for some solid facts before LL becomes everyone's punching bag and all of the other investors take a hit. I wonder if anyone here has exposure directly or through a mutual find?

What about the "investors" shorting the stock? Are they "possibly" crooks? Is this a single play? Is shorting a stock and making accusations about an infraction the standard MO? Only time will tell.

I am interested in the story for two reasons: I, like you, care about our planet, and I also care about corruption in the US financial system. It appears certain that someone is gaming (my definition) our financial system by bashing a stock they have shorted. I haven't read everything, but that is the only fact I have read so far.

Look up Bill Ackman and Herbalife.