Rio Tinto plc (NYSE: RIO)
Hagens Berman reminds purchases of Rio Tinto (NYSE: RIO) of the securities class action filed by the firm against Rio Tinto and certain former senior executives related to the SEC's allegations that they publicly overstated the value of Rio Tinto Coal Mozambique ("RTCM") by billions of dollars. The Lead Plaintiff deadline in pending in the U.S. District Court for the Southern District of New York is December 22, 2017.
The complaint alleges that Rio Tinto, its former Chief Executive Officer (Thomas Albanese), and its former Chief Financial Officer (Guy Robert Elliott), were fully aware that RTCM’s business was essentially worthless but they nevertheless continued to fraudulently tout its value in the billions of dollars.
As of August 2012, an executive in charge of Rio Tinto’s Technology & Innovation (“TI”) division informed CFO Elliott that RTCM was worth between negative $4.9 billion to $300 million but Elliott did not inform Rio Tinto’s board or its investors during meetings with them in October and November 2012. The TI executive brought RTCM’s enormous overvaluation directly to the attention of Rio Tinto’s board of directors and, on January 15, 2013, the board determined that an 80 percent write-down of RTCM’s value to $611 million should be recorded. The Company reported this write down in its financial statements filed with the SEC on February 15, 2013.
Both CEO Ablanese and Elliott departed from their positions shortly after the board’s decision. Rio Tinto ultimately sold RTCM for a mere $50 million after recording an additional $470 million RTCM writedown.
“By filing this complaint, at least a portion of the investors, who purchased during the short Class Period, may still be able to recover those damages,” said Hagens Berman partner Reed Kathrein. “We continue to investigate this and other matters hidden from investors.”
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