SEC to drop long-running fraud case against ex-Rio Tinto CFO over African coal assets

The Securities and Exchange Commission is dropping a fraud lawsuit against former Rio Tinto Ltd. chief financial officer Guy Elliott, eight years after accusing him and others of inflating the value of African coal assets the company acquired in a disastrous 2011 deal.

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Lawyers for the SEC and Elliott jointly asked a federal judge in New York to end the case, according to a filing Friday. The agency didn’t elaborate on its decision except to say it was “in the exercise of its discretion.” Elliott’s attorneys called the dismissal “a complete vindication,” according to a statement.

The case was part of the SEC’s 2017 fraud claims against the international mining company, its former chief executive officer and Elliott over a Mozambique coal mining business. Rio Tinto purchased the business for $3.7 billion in 2011, but sold it three years later for $50 million.

According to the regulator, company executives concealed setbacks in the business and hid the true value of the assets from the board of directors, audit committee and investors. The SEC alleged the company failed to follow proper accounting rules to accurately record and value the assets.

Rio Tinto settled the SEC claims in 2023, agreeing to pay a $28 million fine, and former Rio CEO Tom Albanese agreed to pay a $50,000 penalty. Neither the company nor Albanese admitted or denied the SEC’s allegations. Elliott had continued to fight them.

The case is Securities and Exchange Commission v. Rio Tinto, 17-cv-7994, US District Court, Southern District of New York (Manhattan).