Dive Brief:

• The Securities and Exchange Commission on Friday asked a U.S. District Court to dismiss outstanding claims against Guy R. Elliott, formerly the CFO for British-Australian mining company Rio Tinto Ltd, in a joint stipulation together with Elliott Friday — after an eight-year long litigation battle concerning allegations of fraud, according to the release. 
• First filed in 2017, the civil enforcement action alleged that Eliott and other named defendants failed to follow proper accounting principles and inflated the value of coal assets previously acquired by the London and Melbourne-based mining company. The joint stipulation comes after the U.S. District Court for the Southern District of New York previously denied a motion by Elliott for summary judgement last February, with Judge Analisa Torres noting it “remains an open question of fact as to whether Elliott acted unreasonably” related to the two outstanding claims that he violated the Exchange Act. 
•  The joint stipulation filed Friday asks the court to dismiss the claims with prejudice against Elliott, without costs or fees to either party. The SEC cited its ability to exercise its discretion in the case and noted its decision to do so is “based on the specific facts and circumstances of this case and, as stated in the joint stipulation, ‘does not necessarily reflect the commission’s position on any other case,’” according to its litigation release. 

Dive Insight:

Attorneys with the law firm of Paul, Weiss, who represented Elliott, called the joint stipulation to dismiss a “complete vindication for our client” in a Friday statement.

“Mr. Elliott denied the allegations from the outset and, after eight years of SEC litigation, has been fully vindicated,” a spokesperson for Elliott told CFO Dive in an emailed statement. “The SEC dismissal closes this matter, with regulators in the US, UK and Australia all clearing Mr. Elliott, making no findings against him whatsoever.”

The SEC declined to comment beyond its public filings on the matter.

The joint stipulation marks a tepid ending to an eight-year court battle between the SEC and former company executives that left Elliott, who served as the international mining business’ finance chief for 11 years before departing in 2013, as the final holdout. Elliott currently serves as chair for mental health service researcher Prudence Trust, and as Chairman and CIO for the Venice in Peril Fund, according to his LinkedIn profile.

The SEC in 2017 charged Rio Tinto, Elliott and its former CEO Thomas Albanese, with perpetuating fraud to conceal the “the rapid and dramatic decline in value of a coal business in Mozambique, Africa,” that it had acquired in April 2011 for $3.7 billion, according to its complaint.  

The acquisition of the business, subsequently operating as Rio Tinto Coal Mozambique, was the business’ second-largest under Albanese’s leadership, who served as top executive from 2007 to 2013. It quickly ran into difficulties, with RTCM executives informing Elliott and Albanese that its valuation “under the best configuration was negative $680 million” as of May 2012, according to the complaint. However, the named executives concealed this from and misled the company’s board of directors, audit committee and independent auditors, before the misconduct was identified and Rio Tinto ultimately sold RTCM for $50 million in 2014.

The SEC sought permanent injunctions, the return of ill-gotten gains and to bar both Albanese and Elliott from serving as officers or directors in public companies, as well as civil penalties for all parties. The watchdog settled with Rio Tinto and Albanese in 2023, requiring Rio Tinto to pay a $28 million fine while Albanese was required to pay a $50,000 penalty. Albanese and the company neither confirmed nor denied the allegations, according to court documents.

The closing of the eight-year case came shortly before the Justice Department set its sights on the central bank, with prosecutors issuing subpoenas to the Federal Reserve regarding Chair Jerome Powell’s testimony in June concerning a $2.5 billion renovation project for its headquarters.

In a video statement posted to the Fed’s website, Powell critiqued the DOJ’s actions as part of an ongoing push to weaken the central bank’s historic independence, with Donald Trump having repeatedly pushed the Fed to lower interest rates at a more rapid rate.

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation,” Powell said.