Nearly a decade after opening a fraud lawsuit against the former CFO of British-Australian mining company Rio Tinto, the Securities and Exchange Commission is dropping the case.
On Friday, the SEC announced it had dismissed its civil case against Rio Tinto’s former finance chief Guy Elliott. The commission is dropping the case “with prejudice,” which means it cannot be relitigated.
In a joint stipulation to dismiss filed Jan. 9, the SEC said it is moving to “dismiss this case in the exercise of its discretion.” The filing also noted that the move does “not necessarily reflect the Commission’s position on any other case.”
The filing didn’t contain any more details on the SEC’s reasoning for dropping the case. When reached for comment, an SEC spokesperson declined to comment “beyond our public filings.”
Back in October 2017, the SEC charged Elliott and Rio Tinto’s former CEO Thomas Albanese with fraud for allegedly inflating the value of the company’s coal mining operations in Mozambique. At the time, the commission alleged that the two men “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 Tinto’s Board of Directors, Audit Committee, independent auditors and investors,” the SEC said.
Rio Tinto had earlier purchased a Mozambique mining business for $3.7 billion but sold it for just $50 million, according to the SEC.
The case was filed in the U.S. District Court for the Southern District of New York.
The SEC in November 2023 secured a final judgment that required Rio Tinto to pay a $28 million civil penalty. Former CEO Albanese, for his part, was ordered to pay a $500,000 penalty, though the former CFO was never ordered to make such payments. Elliott has denied wrongdoing. In a statement Friday, the former CFO’s lawyers said that the dismissal is “a complete defense victory.”
“Mr. Elliott denied the allegations from the outset and, after eight years of SEC litigation, has been fully vindicated,” a spokesperson for Elliott said in an email. “The SEC dismissal closes this matter, with regulators in the U.S., U.K. and Australia all clearing Mr. Elliott, making no findings against him whatsoever.”
As part of the joint stipulation filed last week, Elliott agreed to waive any rights to seek from the U.S. government “reimbursement of attorney’s fees or other fees, expenses, or costs … that in any way relate to the Litigation.”
