Through those investigations, investors also learned that Massey schemed to control its injury rate. One miner told investigators Massey would "just pay guys to sit in the bathhouse or stay home if they got hurt -- anything but fill out the paperwork."
Berger wrote that the various disclosures "would suggest that defendants perpetrated a fraud on the market by omitting the extent of its safety compliance record," and that "the materialization of the risk of Massey's misleading statements was realized" in the blast.
She ruled that the shareholders "have sufficiently alleged particular facts supporting an allegation that its losses were caused by Massey's misleading and false statements about the safety of its mines."
The shareholders argued that Massey began a concerted campaign to mislead them after the 2006 fire that killed two men at Massey's Aracoma Coal Co. Alma No. 1 mine in West Virginia.
In its 2007 annual report, for example, Massey declared that "a safe mine is a productive mine." It also said its formula for success was "safety first, production second and measurement third."
The investigations of UBB, however, found that Massey valued profits over people, and that upper management had production reports faxed out of the mine every 30 minutes. At a congressional hearing Tuesday, officials testified that the longwall mining machine made the company $700,000 per shift.
The explosion also triggered a continuing criminal investigation by the U.S. Department of Justice.
The mine's former superintendent is set to plead today to a charge of conspiracy to defraud the federal government. Gary May is apparently cooperating with federal prosecutors in a continuing criminal investigation. He is accused, among other things, of disabling a methane gas monitor and falsifying records.
Former security chief Hughie Elbert Stover, meanwhile, is appealing his conviction for lying to investigators and attempting to destroy records. He was sentenced in February to three years in prison -- one of the stiffest punishments ever handed down in a mine safety case.