Rio Tinto (NYSE:RIO) agreed to pay a $28 million fine to settle a lawsuit against the SEC that accused it of fraud in the management 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 settle SEC-related claims; neither he nor the company has admitted wrongdoing, while former CFO Guy Elliott remains charged.
The defendants had been accused of misleading investors about the value of Rio Tinto Coal Mozambique, which was purchased in 2011 for $3.7 billion in the takeover of the former Riversdale Mining.
The SEC stated that Rio Tinto (RIO) then managed to raise more than $5.5 billion from unsuspecting American investors by overvaluing the coal assets, despite an internal valuation that the assets were worth less than $680 million.
Albanese was accused of misleading investors by describing the Moatize Basin, where Rio Tinto Coal Mozambique was located, as a world-class basin coal deposit.
Rio Tinto (RIO) wrote down the deal by more than $3 billion in 2013 and sold the assets in late 2014 for $50 million.