In re RIO TINTO PLC

 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No.  97049 / March 6, 2023 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No.   4386 / March 6, 2023 
 
ADMINISTRATIVE PROCEEDING 
File No.   3-21335 
 
 
In the Matter of 
 
RIO TINTO PLC, 
 
Respondent. 
 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 
21C of the Securities Exchange Act of 1934 (“Exchange Act”), against Rio Tinto plc (“Rio Tinto” 
or “Respondent”).   
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over Respondent and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 
Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 
 
 
 
 

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III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
Summary 
 
1. This matter concerns Rio Tinto’s violations of the books and records and internal 
accounting controls provisions of the Foreign Corrupt Practices Act (the “FCPA”) in connection 
with a bribery scheme involving a consultant to retain Rio Tinto’s existing mining rights in Guinea.  
Rio Tinto is a dual-listed metal and mining company with headquarters in Australia and the United 
Kingdom.  On July 7, 2011, Rio Tinto hired  a French investment banker and close friend of a 
former senior Guinean government official (the “Senior Government Official”) as a consultant (the 
“Consultant”) to help the company retain its mining rights in the Simandou mountain region in 
Guinea, with one of the world’s largest undeveloped iron-ore deposits, by offering or paying money 
to benefit a Guinean government official.  The Consultant began working in March 2011, without 
Rio Tinto having conducted adequate due diligence that was required for retaining third parties, 
began representing Rio Tinto without a written agreement defining the scope of his services or 
deliverables, and was paid $10.5 million notwithstanding certain red flags.  The Consultant, acting 
as Rio Tinto’s agent, offered and attempted to make an improper payment to a Guinean government 
official in connection with Rio Tinto’s successful efforts to retain its mining rights.  None of the 
payments to the Consultant were accurately reflected in Rio Tinto’s books and records, and it failed 
to have sufficient internal accounting controls in place to detect or prevent the misconduct.   
 
Respondent 
 
 2. Rio Tinto plc along with Rio Tinto Ltd makes up Rio Tinto Group (collectively 
“Rio Tinto Group”).  Rio Tinto plc is a UK company incorporated in England and Wales with 
shares listed on the London Stock Exchange and with American Depository Shares that trade on 
the NYSE.  Rio Tinto Ltd is an Australian company incorporated in Victoria, Australia with 
shares listed on the Australian Stock Exchange and with debt listed on the NYSE and registered 
pursuant to Section 12(b) of the Exchange Act.  Rio Tinto plc and Rio Tinto Ltd operate together 
as a single economic enterprise known as Rio Tinto Group and pursuant to Section 13 of the 
Exchange Act, jointly file annual reports on Form 20-F with consolidated financial statements 
and current reports on Forms 6-K.  The companies have a common board of directors, and 
shareholders have a common economic interest in both companies. 
 
                                                 
1
  The findings herein are made pursuant to Respondent's Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding. 
 

 3 
Other Relevant Individuals 
 
 3. Consultant is a former consultant to Rio Tinto and a French citizen.  Rio Tinto 
retained him in 2011 to help the company retain its mining rights in Guinea.  During the relevant 
time period, the Consultant was simultaneously a senior advisor at a French investment bank and 
the director of his own consulting company.  He was a former classmate of the Senior Government 
Official at the Paris Institute of Political Studies.   
 
4. The Rio Tinto Executive (“Rio Tinto Executive”) oversaw Rio Tinto’s 
involvement in the Simandou settlement negotiations with the Government of Guinea during the 
relevant time period.  He was also the principal point of contact for the Consultant at the company.  
As a result of his conduct discussed herein, Rio Tinto terminated the Rio Tinto Executive’s 
employment in November 2016.  The Rio Tinto Executive is a dual UK and Australian citizen. 
 
Background 
 
5. Between 1997 and 2006, Rio Tinto was granted mining and exploration rights to 
four section blocks of the Simandou mountain region in Guinea’s interior with one of the largest 
iron-ore deposits in the world.  In late 2008, after a change in administrations, the Government of 
Guinea revoked Rio Tinto’s rights to two of the four sections—known as blocks one and two—for 
what the government viewed as Rio Tinto’s failure to take proactive steps to develop the mine.  
The Government of Guinea ultimately awarded blocks one and two to one of Rio Tinto’s 
competitors. 
 
6. Thereafter, Rio Tinto deployed significant resources to try to develop the blocks it 
retained—blocks three and four.  High-level executives made frequent visits to the mine to 
improve the company’s relationship with the government.  In 2010, Guinea elected a new 
administration that declared all mining contracts be reexamined.  As a result of this review, one 
of Rio Tinto’s competitors was stripped of its rights to blocks one and two in the Simandou 
region. 
 
Rio Tinto Retains Consultant as its Agent  
 
7. In March 2011, while searching for an advisor to help the company retain its 
mining rights, Rio Tinto executives identified a French investment banker and former classmate 
of the Senior Government Official as a potential consultant.  Email discussions amongst the 
company’s senior executives highlighted the potential Consultant’s history and ongoing 
friendship with the Senior Government Official as the main reasons for hiring him.  At the time, 
the potential Consultant had no direct work experience relating to the mining business generally 
or in Guinea specifically.   
 
 8. The Rio Tinto Executive contacted the Consultant and confirmed his connection 
to the Senior Government Official at the time.  Afterward, a lower level Rio Tinto employee ran 
a cursory background check on the Consultant, without any additional due diligence.  The 
Consultant began working on behalf of Rio Tinto—purportedly representing the company’s 

 4 
interests during discussions with the Government of Guinea and routinely reporting information 
back to the Rio Tinto Executive—before a written agreement was executed defining the scope of 
his employment, fees, or deliverables.  No written agreement of any sort was in place for the 
majority of the Consultant’s employment and a written contract was only executed one day 
before Rio Tinto paid the Consultant.  
 
9. With the Consultant’s influence by offering money to a Guinean government 
official, Rio Tinto successfully secured its mining rights to blocks three and four by entering into 
a Settlement Agreement with the Government of Guinea on April 22, 2011, pursuant to which it 
paid $700 million to the Guinean Public Treasury.   
 
Rio Tinto Pays Consultant $10.5 Million 
 
10. The Consultant’s fees remained undetermined throughout the course of the 
settlement negotiations with the Government of Guinea and even after the settlement was 
reached on April 22, 2011.  The Consultant negotiated his fees with the Rio Tinto Executive, 
repeatedly stressing that the Senior Government Official often asked whether the company had 
paid him yet.   
 
11. At times when working on behalf of Rio Tinto, there were red flags suggesting 
that the Consultant may have also been providing advice to the Senior Government Official.  
Specifically, in an April 26, 2011 email to the Rio Tinto Executive, the Consultant wrote, “[the 
Senior Government Official] says I should remain on the Republic of Guinea’s side and not 
become a RT’s [sic] employee.  He says that if I sign a contract with RT, he cannot trust my 
advice anymore...”  In another email, the Consultant wrote “...I rendered a service that no 
investment bank could have rendered.  You are the only witness of it, with the [Senior 
Government Official] himself, of course that is why he askes [sic] whether RT treats me well.”  
A few days later, the Consultant wrote “...I was predestined to save RT’s skin in Guinea.  
Without bragging, the [Senior Government Official’s] decision would probably have been 
different if I had not happened to be there....”  He followed up with, “[The Senior Government 
Official] says I deserve a fee for the work I have done up to now, but the fee should be a lump 
amount that does not compromise my independence in the future.”  Finally, in a May 10, 2011 
email, he wrote, “the [Senior Government Official] is always asking: ‘did you find an 
arrangement with RT?  They owe you a lot because without you I would have signed with the 
Chinese....’”   
 
12. The above emails presented red flags about whether the Consultant was working 
for Rio Tinto or the Senior Government Official, and whether some portion of the Consultant’s 
fees would be paid to the Senior Government Official.  Other than these emails and other 
feedback, it is unclear what services, if any, the Consultant provided to Rio Tinto over 
approximately four months. 
 
13. Rio Tinto executives debated the amount and form of the Consultant’s payment, 
with one executive expressing concern about issuing a lump sum payment that the Consultant 
was demanding, allegedly with the Senior Government Official’s prompting, writing “tell [the 

 5 
Consultant] one big lump looks like a bribe and people will wonder where the money went.”  
Despite these concerns, Rio Tinto executives eventually approved two lump sum payments to the 
Consultant for his alleged services.  Executives debated how much the Consultant should be paid 
in emails in which the Rio Tinto Executive described “very unique and unreplicable services and 
closeness to the [Senior Government Official]” provided by the Consultant.  The CEO responded 
that, when considering the fees, they should “think about the optics to [the Government of 
Guinea].”   
 
14. Notwithstanding the aforementioned concerns, the company agreed to pay the 
Consultant $10.5 million in two tranches and entered into a written agreement with the 
Consultant on July 7, 2011, four months after the Consultant purportedly began representing the 
company’s interests and one day before Rio Tinto paid the Consultant the first tranche.   
 
 15. On July 8, 2011, Rio Tinto paid $7.5 million to the Consultant’s Swiss bank 
account and, on July 12, 2011, placed the remaining $3 million in an escrow account at the same 
Swiss bank to be released after December 31, 2015, provided that Rio Tinto continued to retain 
its mining rights over blocks three and four.  At the Consultant’s request, Rio Tinto authorized 
the release of the $3 million from escrow to the Consultant on February 25, 2016.  The Rio Tinto 
Executive initiated both payments improperly using manual payment forms generally limited for 
payments up to AUD $5,000, instead of going through the company’s prescribed process for 
higher amounts.  The payments also irregularly were made out of Hamersley Iron Pty Limited, 
an Australian-based, wholly-owned subsidiary of Rio Tinto Limited, instead of Rio Tinto plc.  
Lower level employees expressed concerns about the payments being accounted for out of 
Hamersley instead of an entity on the Rio Tinto plc side of the dual-listed structure.  In a July 21, 
2011 email, another Rio Tinto executive explained the reason for paying out of Hamersley: “[a]s 
you are aware, the urgency and confidentiality prescribed for the payment meant we needed to 
make some quick decisions at the time on how to organize the payment and subsequent transfer.”  
In 2011, Rio Tinto did not have a system in place to flag such irregularities.   
 
16. Rio Tinto ultimately never developed blocks three and four of the Simandou 
region or extracted anything of value from them because, in part, declining iron ore prices made 
mining in the Simandou region economically not viable.  The company capitalized the $700 
million Settlement Agreement on the balance sheet as a prepayment for an intangible asset until 
2014, when it was transferred into intangible assets for exploration, before being written off as 
an expense in 2015, so that it has zero current carrying value. 
 
Consultant Attempts to Pay a Bribe to a Government Official 
 
 17. Days after Rio Tinto made the initial payment to the Consultant and placed the 
remaining balance in the escrow account, the Consultant attempted to transfer $822,506 on July 
15, 2011 from his Swiss bank account to a Hong Kong company owned by a Guinean national 
with links to government officials.  The bank held up the transaction over concerns about the 
company’s ties to Guinean officials.  When the bank questioned the Consultant, he explained that 
he was making the payment on behalf of a second Guinean government official (the “Junior 
Government Official”) to the Senior Government Official. The Junior Government Official was 

 6 
a close advisor to the Senior Government Official.  The attempted transaction was ultimately 
blocked by the bank. 
 
 18. During an interview with the bank, the Consultant told bank employees that he 
would make the payment out of one of his other accounts at another bank.  Subsequently, the 
Hong Kong company paid $200,000 for re-election campaign t-shirts to a t-shirt company in 
China on July 29, 2011.  That same t-shirt company eventually made shirts for the Senior 
Government Official’s reelection campaign.  Those shirts match the description on the invoice 
the Consultant submitted to the Swiss bank when attempting the $822,506 payment, further 
corroborating that the attempted payment from funds that Rio Tinto paid him was intended as a 
political contribution to the Senior Government Official’s reelection campaign or, at the very 
least, a payment to the Junior Government Official. 
 
LEGAL STANDARDS AND VIOLATIONS 
  
 19. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-
and-desist order upon any person who is violating, has violated, or is about to violate any provision 
of the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, or 
would be the cause of the violation, due to an act or omission the person knew or should have 
known would contribute to such violation.    
 
Rio Tinto Violated Exchange Act Section 13(b)(2)(A) 
 
 20. As a result of the conduct described above, Rio Tinto violated Section 
13(b)(2)(A) of the Exchange Act, which requires issuers to make and keep books, records, and 
accounts, which, in reasonable detail, accurately and fairly reflect the transactions and 
disposition of the assets of the issuer.   
 
Rio Tinto Violated Exchange Act Section 13(b)(2)(B) 
 
 22. In addition, as a result of the conduct described above, Rio Tinto violated Section 
13(b)(2)(B) of the Exchange Act, which requires issuers to devise and maintain a system of 
internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 
executed in accordance with management’s general or specific authorization; (ii) transactions are 
recorded as necessary (I) to permit preparation of financial statements in conformity with 
generally accepted accounting principles or any other criteria applicable to such statements, and 
(II) to maintain accountability for assets; (iii) access to assets is permitted only in accordance 
with management’s general or specific authorization; and (iv) the recorded accountability for 
assets is compared with the existing assets at reasonable intervals and appropriate action is taken 
with respect to any differences.   
 
 
 
  

 7 
COOPERATION AND REMEDIATION 
 
 23. In determining to accept the Offer of Settlement, the Commission considered 
remedial acts promptly undertaken by Respondent and cooperation afforded the Commission 
staff.  Rio Tinto cooperated in the Commission’s investigation by identifying and timely 
producing key documents identified in the course of its own internal investigation, providing the 
facts developed in its internal investigation, and making current or former employees available to 
the Commission staff. 
 
 24. Rio Tinto’s remedial efforts included termination of employees responsible for 
the misconduct and enhancements to its internal accounting controls.  Rio Tinto strengthened its 
ethics and compliance organization; enhanced its code of conduct, policies and procedures 
regarding, among other things, gifts, hospitality, due diligence, and the use of third parties; 
enhanced its whistleblower program; improved its monitoring systems and internal controls 
related to manual payments and third parties; enhanced its anticorruption risk assessments and 
transaction testing of compliance controls; and increased training of employees and third parties 
on anti-bribery issues.  
 
IV. 
 
In view of the foregoing, the Commission deems it appropriate to impose the 
sanctions agreed to in Respondent’s Offer of Settlement. 
 
 Accordingly, it is hereby ORDERED that: 
 
A. Pursuant to Section 21C of the Exchange Act, Respondent shall cease and desist 
from committing or causing any violations and any future violations of Sections 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act. 
 
B. Respondent shall, within thirty days of the entry of this Order, pay a civil money 
penalty in the amount of $15,000,000 to the Securities and Exchange Commission for transfer to 
the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 
timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.  
Payment must be made in one of the following three ways: 
 
1. Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request; 
 
2. Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofin.htm; or 
 
3. Respondent may pay by certified check, bank cashier’s check, or United States 
postal money order, made payable to the Securities and Exchange Commission 
and hand-delivered or mailed to: 
 

 8 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Rio Tinto as a Respondent in these proceedings, and the file number of these proceedings; a copy 
of the cover letter and check or money order must be sent to Ansu N. Banerjee, Assistant 
Regional Director, Division of Enforcement, Securities and Exchange Commission, 444 South 
Flower Street, Los Angeles, California 90071.    
 
C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 
By the Commission. 
 
 
 
Vanessa A. Countryman 
        Secretary 
 
 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No.  97049 / March 6, 2023 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No.   4386 / March 6, 2023 

 

ADMINISTRATIVE PROCEEDING 

File No.   3-21335 

 

 

In the Matter of 

 

RIO TINTO PLC, 

 

Respondent. 

 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

   

 

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 

21C of the Securities Exchange Act of 1934 (“Exchange Act”), against Rio Tinto plc (“Rio Tinto” 

or “Respondent”).   

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over Respondent and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-

and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 

 

 

 

 



 2 

 

 

 

 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

Summary 
 

1. This matter concerns Rio Tinto’s violations of the books and records and internal 

accounting controls provisions of the Foreign Corrupt Practices Act (the “FCPA”) in connection 

with a bribery scheme involving a consultant to retain Rio Tinto’s existing mining rights in Guinea.  

Rio Tinto is a dual-listed metal and mining company with headquarters in Australia and the United 

Kingdom.  On July 7, 2011, Rio Tinto hired  a French investment banker and close friend of a 

former senior Guinean government official (the “Senior Government Official”) as a consultant (the 

“Consultant”) to help the company retain its mining rights in the Simandou mountain region in 

Guinea, with one of the world’s largest undeveloped iron-ore deposits, by offering or paying money 

to benefit a Guinean government official.  The Consultant began working in March 2011, without 

Rio Tinto having conducted adequate due diligence that was required for retaining third parties, 

began representing Rio Tinto without a written agreement defining the scope of his services or 

deliverables, and was paid $10.5 million notwithstanding certain red flags.  The Consultant, acting 

as Rio Tinto’s agent, offered and attempted to make an improper payment to a Guinean government 

official in connection with Rio Tinto’s successful efforts to retain its mining rights.  None of the 

payments to the Consultant were accurately reflected in Rio Tinto’s books and records, and it failed 

to have sufficient internal accounting controls in place to detect or prevent the misconduct.   

 

Respondent 

 

 2. Rio Tinto plc along with Rio Tinto Ltd makes up Rio Tinto Group (collectively 

“Rio Tinto Group”).  Rio Tinto plc is a UK company incorporated in England and Wales with 

shares listed on the London Stock Exchange and with American Depository Shares that trade on 

the NYSE.  Rio Tinto Ltd is an Australian company incorporated in Victoria, Australia with 

shares listed on the Australian Stock Exchange and with debt listed on the NYSE and registered 

pursuant to Section 12(b) of the Exchange Act.  Rio Tinto plc and Rio Tinto Ltd operate together 

as a single economic enterprise known as Rio Tinto Group and pursuant to Section 13 of the 

Exchange Act, jointly file annual reports on Form 20-F with consolidated financial statements 

and current reports on Forms 6-K.  The companies have a common board of directors, and 

shareholders have a common economic interest in both companies. 

 

                                                 
1  The findings herein are made pursuant to Respondent's Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding. 

 



 3 

Other Relevant Individuals 

 

 3. Consultant is a former consultant to Rio Tinto and a French citizen.  Rio Tinto 

retained him in 2011 to help the company retain its mining rights in Guinea.  During the relevant 

time period, the Consultant was simultaneously a senior advisor at a French investment bank and 

the director of his own consulting company.  He was a former classmate of the Senior Government 

Official at the Paris Institute of Political Studies.   

 

4. The Rio Tinto Executive (“Rio Tinto Executive”) oversaw Rio Tinto’s 

involvement in the Simandou settlement negotiations with the Government of Guinea during the 

relevant time period.  He was also the principal point of contact for the Consultant at the company.  

As a result of his conduct discussed herein, Rio Tinto terminated the Rio Tinto Executive’s 

employment in November 2016.  The Rio Tinto Executive is a dual UK and Australian citizen. 

 

Background 
 

5. Between 1997 and 2006, Rio Tinto was granted mining and exploration rights to 

four section blocks of the Simandou mountain region in Guinea’s interior with one of the largest 

iron-ore deposits in the world.  In late 2008, after a change in administrations, the Government of 

Guinea revoked Rio Tinto’s rights to two of the four sections—known as blocks one and two—for 

what the government viewed as Rio Tinto’s failure to take proactive steps to develop the mine.  

The Government of Guinea ultimately awarded blocks one and two to one of Rio Tinto’s 

competitors. 

 

6. Thereafter, Rio Tinto deployed significant resources to try to develop the blocks it 

retained—blocks three and four.  High-level executives made frequent visits to the mine to 

improve the company’s relationship with the government.  In 2010, Guinea elected a new 

administration that declared all mining contracts be reexamined.  As a result of this review, one 

of Rio Tinto’s competitors was stripped of its rights to blocks one and two in the Simandou 

region. 

 

Rio Tinto Retains Consultant as its Agent  

 

7. In March 2011, while searching for an advisor to help the company retain its 

mining rights, Rio Tinto executives identified a French investment banker and former classmate 

of the Senior Government Official as a potential consultant.  Email discussions amongst the 

company’s senior executives highlighted the potential Consultant’s history and ongoing 

friendship with the Senior Government Official as the main reasons for hiring him.  At the time, 

the potential Consultant had no direct work experience relating to the mining business generally 

or in Guinea specifically.   
 

 8. The Rio Tinto Executive contacted the Consultant and confirmed his connection 

to the Senior Government Official at the time.  Afterward, a lower level Rio Tinto employee ran 

a cursory background check on the Consultant, without any additional due diligence.  The 

Consultant began working on behalf of Rio Tinto—purportedly representing the company’s 



 4 

interests during discussions with the Government of Guinea and routinely reporting information 

back to the Rio Tinto Executive—before a written agreement was executed defining the scope of 

his employment, fees, or deliverables.  No written agreement of any sort was in place for the 

majority of the Consultant’s employment and a written contract was only executed one day 

before Rio Tinto paid the Consultant.  

 

9. With the Consultant’s influence by offering money to a Guinean government 

official, Rio Tinto successfully secured its mining rights to blocks three and four by entering into 

a Settlement Agreement with the Government of Guinea on April 22, 2011, pursuant to which it 

paid $700 million to the Guinean Public Treasury.   

 

Rio Tinto Pays Consultant $10.5 Million 

 

10. The Consultant’s fees remained undetermined throughout the course of the 

settlement negotiations with the Government of Guinea and even after the settlement was 

reached on April 22, 2011.  The Consultant negotiated his fees with the Rio Tinto Executive, 

repeatedly stressing that the Senior Government Official often asked whether the company had 

paid him yet.   

 

11. At times when working on behalf of Rio Tinto, there were red flags suggesting 

that the Consultant may have also been providing advice to the Senior Government Official.  

Specifically, in an April 26, 2011 email to the Rio Tinto Executive, the Consultant wrote, “[the 

Senior Government Official] says I should remain on the Republic of Guinea’s side and not 

become a RT’s [sic] employee.  He says that if I sign a contract with RT, he cannot trust my 

advice anymore…”  In another email, the Consultant wrote “…I rendered a service that no 

investment bank could have rendered.  You are the only witness of it, with the [Senior 

Government Official] himself, of course that is why he askes [sic] whether RT treats me well.”  

A few days later, the Consultant wrote “…I was predestined to save RT’s skin in Guinea.  

Without bragging, the [Senior Government Official’s] decision would probably have been 

different if I had not happened to be there….”  He followed up with, “[The Senior Government 

Official] says I deserve a fee for the work I have done up to now, but the fee should be a lump 

amount that does not compromise my independence in the future.”  Finally, in a May 10, 2011 

email, he wrote, “the [Senior Government Official] is always asking: ‘did you find an 

arrangement with RT?  They owe you a lot because without you I would have signed with the 

Chinese….’”   

 

12. The above emails presented red flags about whether the Consultant was working 

for Rio Tinto or the Senior Government Official, and whether some portion of the Consultant’s 

fees would be paid to the Senior Government Official.  Other than these emails and other 

feedback, it is unclear what services, if any, the Consultant provided to Rio Tinto over 

approximately four months. 

 

13. Rio Tinto executives debated the amount and form of the Consultant’s payment, 

with one executive expressing concern about issuing a lump sum payment that the Consultant 

was demanding, allegedly with the Senior Government Official’s prompting, writing “tell [the 



 5 

Consultant] one big lump looks like a bribe and people will wonder where the money went.”  

Despite these concerns, Rio Tinto executives eventually approved two lump sum payments to the 

Consultant for his alleged services.  Executives debated how much the Consultant should be paid 

in emails in which the Rio Tinto Executive described “very unique and unreplicable services and 

closeness to the [Senior Government Official]” provided by the Consultant.  The CEO responded 

that, when considering the fees, they should “think about the optics to [the Government of 

Guinea].”   

 

14. Notwithstanding the aforementioned concerns, the company agreed to pay the 

Consultant $10.5 million in two tranches and entered into a written agreement with the 

Consultant on July 7, 2011, four months after the Consultant purportedly began representing the 

company’s interests and one day before Rio Tinto paid the Consultant the first tranche.   

 

 15. On July 8, 2011, Rio Tinto paid $7.5 million to the Consultant’s Swiss bank 

account and, on July 12, 2011, placed the remaining $3 million in an escrow account at the same 

Swiss bank to be released after December 31, 2015, provided that Rio Tinto continued to retain 

its mining rights over blocks three and four.  At the Consultant’s request, Rio Tinto authorized 

the release of the $3 million from escrow to the Consultant on February 25, 2016.  The Rio Tinto 

Executive initiated both payments improperly using manual payment forms generally limited for 

payments up to AUD $5,000, instead of going through the company’s prescribed process for 

higher amounts.  The payments also irregularly were made out of Hamersley Iron Pty Limited, 

an Australian-based, wholly-owned subsidiary of Rio Tinto Limited, instead of Rio Tinto plc.  

Lower level employees expressed concerns about the payments being accounted for out of 

Hamersley instead of an entity on the Rio Tinto plc side of the dual-listed structure.  In a July 21, 

2011 email, another Rio Tinto executive explained the reason for paying out of Hamersley: “[a]s 

you are aware, the urgency and confidentiality prescribed for the payment meant we needed to 

make some quick decisions at the time on how to organize the payment and subsequent transfer.”  

In 2011, Rio Tinto did not have a system in place to flag such irregularities.   

 

16. Rio Tinto ultimately never developed blocks three and four of the Simandou 

region or extracted anything of value from them because, in part, declining iron ore prices made 

mining in the Simandou region economically not viable.  The company capitalized the $700 

million Settlement Agreement on the balance sheet as a prepayment for an intangible asset until 

2014, when it was transferred into intangible assets for exploration, before being written off as 

an expense in 2015, so that it has zero current carrying value. 

 

Consultant Attempts to Pay a Bribe to a Government Official 

 

 17. Days after Rio Tinto made the initial payment to the Consultant and placed the 

remaining balance in the escrow account, the Consultant attempted to transfer $822,506 on July 

15, 2011 from his Swiss bank account to a Hong Kong company owned by a Guinean national 

with links to government officials.  The bank held up the transaction over concerns about the 

company’s ties to Guinean officials.  When the bank questioned the Consultant, he explained that 

he was making the payment on behalf of a second Guinean government official (the “Junior 

Government Official”) to the Senior Government Official. The Junior Government Official was 



 6 

a close advisor to the Senior Government Official.  The attempted transaction was ultimately 

blocked by the bank. 

 

 18. During an interview with the bank, the Consultant told bank employees that he 

would make the payment out of one of his other accounts at another bank.  Subsequently, the 

Hong Kong company paid $200,000 for re-election campaign t-shirts to a t-shirt company in 

China on July 29, 2011.  That same t-shirt company eventually made shirts for the Senior 

Government Official’s reelection campaign.  Those shirts match the description on the invoice 

the Consultant submitted to the Swiss bank when attempting the $822,506 payment, further 

corroborating that the attempted payment from funds that Rio Tinto paid him was intended as a 

political contribution to the Senior Government Official’s reelection campaign or, at the very 

least, a payment to the Junior Government Official. 

 

LEGAL STANDARDS AND VIOLATIONS 
  

 19. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-

and-desist order upon any person who is violating, has violated, or is about to violate any provision 

of the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, or 

would be the cause of the violation, due to an act or omission the person knew or should have 

known would contribute to such violation.    

 

Rio Tinto Violated Exchange Act Section 13(b)(2)(A) 

 

 20. As a result of the conduct described above, Rio Tinto violated Section 

13(b)(2)(A) of the Exchange Act, which requires issuers to make and keep books, records, and 

accounts, which, in reasonable detail, accurately and fairly reflect the transactions and 

disposition of the assets of the issuer.   

 

Rio Tinto Violated Exchange Act Section 13(b)(2)(B) 

 

 22. In addition, as a result of the conduct described above, Rio Tinto violated Section 

13(b)(2)(B) of the Exchange Act, which requires issuers to devise and maintain a system of 

internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 

executed in accordance with management’s general or specific authorization; (ii) transactions are 

recorded as necessary (I) to permit preparation of financial statements in conformity with 

generally accepted accounting principles or any other criteria applicable to such statements, and 

(II) to maintain accountability for assets; (iii) access to assets is permitted only in accordance 

with management’s general or specific authorization; and (iv) the recorded accountability for 

assets is compared with the existing assets at reasonable intervals and appropriate action is taken 

with respect to any differences.   

 

 

 

  



 7 

COOPERATION AND REMEDIATION 

 

 23. In determining to accept the Offer of Settlement, the Commission considered 

remedial acts promptly undertaken by Respondent and cooperation afforded the Commission 

staff.  Rio Tinto cooperated in the Commission’s investigation by identifying and timely 

producing key documents identified in the course of its own internal investigation, providing the 

facts developed in its internal investigation, and making current or former employees available to 

the Commission staff. 

 

 24. Rio Tinto’s remedial efforts included termination of employees responsible for 

the misconduct and enhancements to its internal accounting controls.  Rio Tinto strengthened its 

ethics and compliance organization; enhanced its code of conduct, policies and procedures 

regarding, among other things, gifts, hospitality, due diligence, and the use of third parties; 

enhanced its whistleblower program; improved its monitoring systems and internal controls 

related to manual payments and third parties; enhanced its anticorruption risk assessments and 

transaction testing of compliance controls; and increased training of employees and third parties 

on anti-bribery issues.  

 

IV. 

 

In view of the foregoing, the Commission deems it appropriate to impose the 

sanctions agreed to in Respondent’s Offer of Settlement. 

 

 Accordingly, it is hereby ORDERED that: 

 

A. Pursuant to Section 21C of the Exchange Act, Respondent shall cease and desist 

from committing or causing any violations and any future violations of Sections 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act. 

 

B. Respondent shall, within thirty days of the entry of this Order, pay a civil money 

penalty in the amount of $15,000,000 to the Securities and Exchange Commission for transfer to 

the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 

timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.  

Payment must be made in one of the following three ways: 

 

1. Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request; 

 

2. Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofin.htm; or 

 

3. Respondent may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange Commission 

and hand-delivered or mailed to: 

 

http://www.sec.gov/about/offices/ofin.htm


 8 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Rio Tinto as a Respondent in these proceedings, and the file number of these proceedings; a copy 

of the cover letter and check or money order must be sent to Ansu N. Banerjee, Assistant 

Regional Director, Division of Enforcement, Securities and Exchange Commission, 444 South 

Flower Street, Los Angeles, California 90071.    

 

C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 

By the Commission. 

 

 

 

Vanessa A. Countryman 

        Secretary