Shares in KB Home advanced early Thursday after billionaire hedge-fund manager Edward Lampert bought shares of KB and another homebuilder, betting on a U.S. housing recovery. In a separate matter, KB was fined by the Environmental Protection Agency.

Lampert's ESL Investments Inc., which owns half of department-store giant Sears Holdings Corp., acquired "small stakes" in Los Angeles-based KB and Centex Corp., according to a Securities and Exchange Commission filing. The investments are worth about $10.8 million and $10.4 million, respectively.

Separately, KB Home, along with three other homebuilders, agreed to pay $4.3 million in combined fines to resolve alleged violations of the Clean Water Act, the U.S. Justice Department and the EPA said Wednesday afternoon.

The separate settlements stem from a federal investigation into allegations that the homebuilders violated storm-water runoff regulations at construction sites. KB Home's tab was $1.2 million for its alleged violations.

Shares in KB were up 6.3 percent to $19 in early trading Thursday.

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