Coal Mine Safety Cover-Up Exposed, Resulting in a $265 Million All-Cash SettlementIn re Massey Energy Co. Securities Litigation
Massey's public campaign on "safety over production" had its investors believing that the coal giant learned its lesson from a deadly fire at one of its mines in 2006. While the company was enthusiastically touting its new safety improvement initiatives to investors, Labaton Sucharow and lead plaintiff Commonwealth of Massachusetts Pension Reserves Investment Trust (Massachusetts PRIT) discovered the contrary. Massey had hundreds of safety violations and it systematically concealed these violations from federal safety inspectors.
On April 5, 2010, 29 miners died in an explosion at Massey's Upper Big Branch mine, one of the worst U.S. mine disasters in more than 40 years. News of the explosion, subsequent criminal indictments, and Congressional testimony revealed to the public that Massey had not become an "industry leader in safety" at all. By July 27, 2010, Massey shares had hit a new low-representing a staggering decline that reduced Massey's market capitalization by more than $3 billion and caused massive losses to the class.
On June 4, 2014, the court granted final approval to the $265 million all-cash settlement with Alpha Natural Resources, Massey's parent company.