Lumber Liquidators Compliance Officer Quits

Lumber Liquidators Holdings Inc (NYSE: LL) spiked slightly on Wednesday before falling back on news that its compliance officer Ray Cotton has quietly resigned.

Lumber Liquidators appeared to gain about 3 percent on news of Cotton's departure, but traded recently at $21.98, down $0.03.

The information may have been first ferreted out Wednesday by short-seller Whitney Tilson, who has been on a long campaign to discredit the building supplies retailer.

"The company's failure to disclose this information strikes me as a serious breach of disclosure rules," Tilson wrote in an opinion piece Tuesday for Seeking Alpha.

The retailer, under multiple investigations related to its sale of Chinese-made flooring, hasn't announced Cotton's departure.

Tilson pointed instead to Cotton's current LinkedIn page.

"At best, this is further evidence of a company in chaos and, at worst, one that is trying to hide something," Tilson said.

Tilson has previously criticized Cotton, calling him "unqualified" and predicting he would depart in the wake of recent resignations of Chief Executive Robert Lynch and Chief Financial Officer Daniel Terrell.

Tilson served as a source for a "60 Minutes" report in March that raised the issue of whether Lumber Liquidators laminate flooring met California air quality standards regarding formaldehyde emissions.

Since that report, shares are off more than 60 percent.