The SEC sought permanent injunctions, return of allegedly ill-gotten gains plus interest, and civil penalties from all the defendants, and sought to bar Albanese and Elliott from serving as public company officers or directors. The SEC said the acquisition of the coal assets in Mozambique came shortly after the disclosure of huge losses associated with its previous large-scale acquisition of Alcan. As well as finding that the coal could not be shipped out by barge the SEC said the executives also discovered that there was less coal and this was of a lower quality than expected.

The complaint alleges that after already impairing Alcan twice, Rio Tinto, Albanese, and Elliott knew that publicly disclosing its second failure and rapidly declining value would call into question their ability to pursue the core of Rio Tinto’s business model to identify and develop long-term, low-cost, and highly-profitable mining assets.  Instead, the SEC alleged that Rio Tinto concealed the adverse developments, allowing Rio Tinto to release misleading financial statements days before a series of U.S. debt offerings.  Rio Tinto raised $5.5 billion from U.S. investors, approximately $3 billion of which was raised after May 2012, when executives at Rio Tinto Coal Mozambique had already told Albanese and Elliott that the subsidiary had lost value. The complaint alleges Albanese then repeated and reinforced the false positive outlook for the project in public statements.

Rio Tinto said it intends to vigorously defend itself against the SEC’s allegations. There has been a report in the Australian media that a class action against the company could be launched by investors following the fraud allegations in the US.