The Commonwealth of Massachusetts Pension Reserves Investment Board, the top plaintiff in the large groups of Massey Energy Company common stockholders, came to the agreement with AAH with the defendant not admitting any wrongdoing.
The board and other parties had claimed that Massey – now known as Alpha Appalachia holdings since the June 2011 acquisition of the miner by Alpha Natural Resources – had made misrepresentations regarding its safety record that subsequently resulted in an artificial inflation of its stock price.
When an April 2010 mine explosion at the Upper Big branch mine in West Virginia killed 29 workers, the investigation that followed revealed hundreds of safety violations that left the stock plunging.
In its initial claim, the Massachusetts Pension Reserves Investment Trust made claim that Massey artificially inflated its stock prices for as long as three years, from 2008 to 2010.
“Safety at Massey's mines was repeatedly sacrificed so that aggressive production goals could be met,” the group alleged in suit documentation in 2012.
“Massey had received numerous undisclosed citations arising from serious uncorrected safety and other regulatory violations at surface and underground coal mines it operates in West Virginia and neighboring states.”
A spokesperson for the pension fund told Reuters late Monday that its share of the settlement has not yet been determined.
“This settlement returns significant taxpayer money to the state pension system that was lost as a result of misleading information,” Massachusetts attorney general Martha Coakley said.
“Businesses must be truthful and honest with investors, and our office will continue working to ensure we protect these important public funds.”
The case, known formally as In re Massey Energy Co Securities Litigation, Case No. 5:10-cv-00689 in the Southern District of West Virginia, is still subject to court approval. The number of plaintiffs in the case is in the thousands.
“I am pleased with the outcome of this case,” PRMB director Michael Trotsky said.
“It is a significant win for the class and for PRIM.”
Alpha Appalachia did not release public comment Monday.
