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In the news today are two separate settlements by large corporations.

One is by Massey Energy (now Alpha Natural Resources) has agreed to pay $200M in fines and penalties in connection with the accident at the Big Branch Mine. Bank of America has agreed to settle a mortgage suit for $315M.

Alpha Natural Resources doubled in the third quarter, while Bank of America reported quarterly profits of $6.2 Billion in the 3rd quarter of this year.

(Reuters) - Alpha Natural Resources has agreed to pay $200 million to resolve a range of civil and criminal penalties linked to the Upper Big Branch accident as well as other liabilities it inherited when it bought Massey Energy in June, the Wall Street Journal said, citing several people familiar with the settlement.

The global settlement will resolve civil fines expected to be issued on Tuesday by the federal Mine Safety and Health Administration (MSHA) related to last year's accident at Massey's mine that killed 29 coal miners in West Virginia, the newspaper said.

In a separate report, the paper said Federal regulators are expected to issue the largest fine ever to a U.S. mining company in connection with the Massey Energy accident.

Twenty nine miners were killed in April 2010 at Massey Energy's mine in West Virginia. The company was sold in January 2011 to Alpha Natural Resources for $7.1 Billion. The Big Branch Mine amassed over 1,100 safety violations in the three years before the accident.

In a separate development, Bank of America has agreed to pay $315 Million to settle a mortgage-backed investment suit, while not admitting any wrongdoing.  The investments affected pension funds among other investors. The settlement must be approved by a judge, and Judge Jed Rakoff is the same one who struck down the recent Citigroup settlement reached with the SEC because it admitted no wrongdoing.

NEW YORK — Bank of America agreed to pay $315 million to settle claims by investors that they were misled about mortgage-backed investments sold by its Merrill Lynch unit.

The class action lawsuit was led by the Public Employees' Retirement System of Mississippi pension fund. The fund claimed that the investments were backed by poor quality mortgages written by subprime lenders Countrywide Financial Corp., First Franklin Financial, and IndyMac Bancorp, a bank that failed in 2008.

U.S. District Judge Jed Rakoff has to approve the settlement, something that could prove difficult since the settlement includes no admission of guilt from Bank of America.

Just last week, Rakoff struck down a $285 million settlement that Citigroup Inc. reached with the Securities and Exchange Commission. The settlement would have imposed penalties on Citigroup even as it allowed the company to deny allegations that it misled investors.

Rakoff said the public has a right to know what happens in cases that touch on "the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives." In such cases, the SEC has a responsibility to ensure that the truth emerges, he wrote.

In 2009, Rakoff had rejected a $33 million settlement between the SEC and Bank of America on similar grounds, calling it a breach of "justice and morality."


Rakoff's prior action regarding the Citigroup settlement has been described as 'historic' in that judges have been typically a rubber stamp for the SEC. It will be interesting to see how he rules on this latest BofA suit.

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