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Rio Tinto (New York Stock Exchange: RIO) agreed to pay a fine of 28 million dollars to settle an SEC lawsuit that accused him of fraud in his handling of a failed investment in a coal project in Mozambique, ending a civil suit filed six years ago, Reuters reported late Friday.
Former CEO Tom Albanese agreed to pay a $50,000 civil penalty to resolve related SEC claims; Neither he nor the company admitted wrongdoing, while former CFO Guy Elliott remains accused.
The defendants had been accused of misleading investors about the value of Rio Tinto Coal Mozambique, which was bought in 2011 for $3.7 billion through the acquisition of the former Riversdale Mining.
The SEC said Rio Tinto (RIO) was able to raise more than $5.5 billion from unsuspecting U.S. investors by overvaluing coal assets, despite an internal assessment that the assets were worth a negative $680 million.
Albanese was accused of misleading investors by describing the Moatize basin, where Rio Tinto Coal Mozambique was located, as a world-class coal deposit.
Rio Tinto (RIO) took a writedown of more than $3 billion on the deal in 2013 and sold the assets in late 2014 for $50 million.
