Rio Tinto Beats SEC Bid to Revive Scheme Claims on Coal Assets

Misstatements and omissions alone can’t support claims of a scheme to defraud, the Second Circuit said, upholding a lower court decision that trimmed part of the SEC’s suit against Rio Tinto Group stemming from a $3.7 billion coal deal in Africa.

The US Court of Appeals for the Second Circuit affirmed a New York federal court’s decision to dismiss scheme-based claims from the SEC’s enforcement action against Rio Tinto, former Chief Executive Officer Tom Albanese and former Chief Financial Officer Guy Elliott.

The district court’s decision rested on a 2005 Second Circuit ruling, Lentell v. Merrill Lynch, which held ...