By Jonathan Stempel
NEW YORK, Jan 9 (Reuters) - The U.S. Securities and Exchange Commission on Friday dismissed its lawsuit against a former Rio Tinto chief financial officer, ending a long-running fraud
case over a bad investment in a Mozambique coal project by one of the world's largest mining companies.
In a Manhattan federal court filing, the SEC said it was dismissing its civil case against Guy Elliott "in the exercise of its discretion," without addressing the merits of its remaining claims.
Friday's dismissal ends a more than eight-year-old case in which Rio Tinto agreed to pay a $28 million civil fine and former chief executive Tom Albanese accepted a $50,000 fine, both in 2023.
Elliott denied wrongdoing. In a joint statement, his lawyers called the dismissal "a complete defense victory."
The SEC did not immediately respond to requests for comment.
In its October 2017 complaint, the SEC accused Rio Tinto of deceiving investors about the value of Rio Tinto Coal Mozambique, which the Anglo-Australian company bought in 2011 for $3.7 billion through a takeover of the former Riversdale Mining.
Rio Tinto later raised more than $5.5 billion from unsuspecting U.S. fixed-income investors by overvaluing the coal assets, despite an internal assessment showing that the assets were worth negative $680 million, the SEC said.
The internal calculation valued the assets negatively after Mozambique's government rejected Rio Tinto's proposal for barging, a means to transport coal.
Rio Tinto took a more than $3 billion writedown for Mozambique in 2013, and sold the assets the following year for $50 million.
Last February, U.S. District Judge Analisa Torres rejected Elliott's bid to dismiss the SEC's remaining claims that he misled Rio Tinto's accounting firm about Rio Tinto Coal Mozambique's finances and committed books and records violations. The judge found open factual issues best left for a jury.
Rio Tinto and rival Glencore said on Thursday they were in merger talks to potentially create the world's largest mining company.
(Reporting by Jonathan Stempel in New York; Editing by Lisa Shumaker)
