Shareholders had sued the homebuilder, saying they were misled about business practices.
Beazer Homes USA Inc. agreed to pay $30.5 million to settle a class-action lawsuit over allegations it misled shareholders about problems with its mortgage-lending practices that led to a federal investigation.
Under terms of the settlement, the company denies any wrongdoing, Beazer said Tuesday in a statement. The settlement is subject to final approval by U.S. District Judge Clarence Cooper in Atlanta.
Shareholders sued in March 2007 and accused company directors of failing to prevent improper business practices including illegal mortgage lending. Beazer's illegal mortgage lending practices allowed the Atlanta-based company to sell more homes and conceal its declining business, shareholders said in the complaint. The lawsuit followed an Observer series that found the company arranged loans some buyers couldn't afford and violated federal lending laws.
Beazer, once a major Charlotte-area homebuilder, said insurance would cover the settlement payout. The settlement covers shareholders who purchased stock from Jan. 27, 2005, to May 12, 2008, according to court filings.
In September, Beazer settled with the U.S. Securities and Exchange Commission over claims it fraudulently misstated its earnings. The agreement didn't require the company, which denied wrongdoing, to pay any financial penalties.
Beazer rose 51 cents, or 16.7 percent, to $3.57 in New York Stock Exchange trading. The stock has climbed 126 percent this year after falling 79 percent in 2008.
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