Georgia-based flooring manufacturer Mohawk Industries disclosed it does not expect to face enforcement from the Securities and Exchange Commission (SEC) regarding allegations of violations of securities laws raised in a class-action lawsuit that the company agreed to pay $60 million to settle.
Mohawk, in a quarterly filing Friday, said it was informed by the SEC in writing on Sept. 6 that the agency did not intend to recommend an enforcement action against the company regarding the matter. Mohawk was also subpoenaed by the U.S. Attorney’s Office for the Northern District of Georgia; the company said it was unaware of any further investigation by the office.
In December, Mohawk agreed in principle to pay the $60 million after plaintiffs in the lawsuit, including the Public Employees’ Retirement System of Mississippi, accused the company and its chief executive officer, Jeffrey Lorberbaum, of making false and misleading statements and omissions about its product quality, sales, and revenues from April 2017 through July 2019.
The complaint alleged Mohawk artificially inflated the price of its stock through fictitious sales of products not delivered to customers and improper inventory valuations.
A court approved the settlement in June, under which Mohawk did not admit fault or wrongdoing. The company, which conducted an internal investigation into the matter with the assistance of outside legal counsel, maintained it believes the allegations were without merit.