SEC drops final lawsuit in long-running Rio Tinto fraud case

The United States Securities and Exchange Commission (SEC) has dropped its final lawsuit against Guy Elliott, the former chief financial officer of Rio Tinto, regarding the company’s troubled $3.7 billion acquisition of a Mozambique coal project in 2011. This dismissal concludes a fraud case initiated by the SEC in 2017. Previously, Rio Tinto settled the case against it in 2023 with a $28 million fine, and former CEO Tom Albanese paid $50,000, with neither admitting wrongdoing.

Elliott’s spokesperson stated he had consistently denied the allegations and has now been “fully vindicated” after eight years of litigation. The SEC’s filing indicated the dismissal was made “in the exercise of its discretion,” and regulators in the US, UK, and Australia have all cleared Elliott without making any adverse findings. The case centered on accusations that Rio Tinto and its executives misled investors about the value of Rio Tinto Coal Mozambique (RTCM), which suffered significant write-downs and was eventually sold for a mere $50 million after raising $5.5 billion from investors.

The SEC had argued that the acquisition faced immediate setbacks due to lower-than-expected coal quality and quantity, as well as issues with shipping plans. The SEC also alleged that Rio Tinto concealed these problems to protect its reputation following losses from the Alcan acquisition. Law firm Paul, Weiss, representing Elliott, confirmed the dismissal with prejudice, meaning the claims cannot be refiled.

(Source：The Times)