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Former Rio Tinto CEO Tom Albanese, ex-CFO Guy Elliott charged with fraud by SEC

Tom Albanese
Mining   The complaint by the Securities and Exchange Commission

The U.S. regulator has charged Rio Tinto and two of its former top executives with fraud for inflating the value of Mozambique coal assets acquired in 2011 for $3.7 billion ($4.65 billion) and sold a few years later for $50 million.

The complaint by the Securities and Exchange Commission (SEC), filed in federal court in Manhattan on Tuesday, alleges that Rio Tinto, its former chief executive Thomas Albanese, and its former chief financial officer Guy Elliott failed to follow accounting standards and company policies to accurately value and record its assets.

"Instead, as the project began to suffer one setback after another resulting in the rapid decline of the value of the coal assets, they sought to hide or delay disclosure of the nature and extent of the adverse developments" from Rio's board, audit committee, independent auditors and investors, the SEC complaint alleges.

"Rio Tinto and its top executives allegedly failed to come clean about an unsuccessful deal that was made under their watch," said Steven Pelkin, co-director of the watchdog's enforcement division, in a statement.

"They tried to save their own careers at the expense of investors by hiding the truth."


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