U.S. regulators yesterday sued Rio Tinto PLC and two former top executives over claims they misled investors about the value of Mozambique coal assets obtained in a disastrous acquisition that caused huge losses for the global mining giant, the Wall Street Journal reported today. Rio Tinto continued to value the mining assets in Mozambique at more than $3 billion despite an internal assessment that they were worth negative $680 million, according to a lawsuit filed in Manhattan federal court. The Securities and Exchange Commission’s lawsuit alleges that former Chief Executive Thomas Albanese and former Chief Financial Officer Guy Elliott knew about the project’s rapidly declining value but didn’t disclose it to investors and misled their board of directors about the scope of the problems, the SEC said. The SEC is pursuing civil monetary penalties and disgorgement of ill-gotten gains through its lawsuit, and seeking a bar on Albanese and Elliott from serving as officers or directors of a public company. The regulator’s investigation began in 2013, Rio Tinto disclosed in December, when the firm said that it was cooperating with the probe.
