Monday March 2, 2015
“Our goal is to sell a good product at a good price,” Sullivan told Anderson Cooper of “60 Minutes.” “And we don’t get the price by skimping on anything. We get the price by low overhead, huge volume and being very efficient at what we do. And we’re never [going to] sell something unsafe.”
However, “60 Minutes” sent a reporting team to China to investigate the mills that supply Lumber Liquidators. Posing as buyers and with the use of hidden cameras, the team were told by employees that the mills were indeed using core boards with higher levels of formaldehyde to save the company up to 15% on price. All three mills also admitted falsely labeling products as CARB 2–compliant.
“In 16 years of professional money management, I’ve seen hundreds of companies do all sorts of bad things to get their stock prices up,” hedge fund manager Whitney Tilson told Cooper. “But this has got to be the worst. “
I teach the accounting ethics 5308 class in the spring. As I remarked to the class, I never seem to run out of new material for the class. No matter how egregious the rogue was last year, there is always a new candidate to take their place. Read the interview to see how hollow the CEO sounded.