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Rio Tinto Pays $15 Million Penalty for Foreign Corrupt Practices Violation in Guinea

Rio Tinto, a global mining and metals company, has agreed to pay a $15 million civil penalty to the Securities and Exchange Commission (SEC) for violating the Foreign Corrupt Practices Act (FCPA). The violation is related to a bribery scheme involving a consultant in Guinea.

The Hiring of a Consultant in Guinea

In 2011, Rio Tinto hired a French investment banker and a close friend of a former senior Guinean government official as a consultant to help the company retain its mining rights in the Simandou mountain region in Guinea. However, the consultant began working without a written agreement defining the scope of his services or deliverables.

Violation of the FCPA

The SEC’s investigation found that the consultant acted as Rio Tinto’s agent and offered and attempted to make an improper payment of at least $822,000 to a Guinean government official in connection with the consultant’s efforts to help Rio Tinto retain its mining rights. Rio Tinto failed to have sufficient internal accounting controls in place to detect or prevent misconduct. Additionally, none of the payments to the consultant were accurately reflected in Rio Tinto’s books and records.

Lack of Adequate Internal Accounting Controls

Rio Tinto’s failure to have sufficient internal accounting controls in place to detect or prevent misconduct is a clear violation of the FCPA. The company’s deficient controls were no match for managers determined to hire a consultant whose only ostensible qualification was a personal relationship with a senior government official.

Consent to the SEC’s Order

Rio Tinto consented to the SEC’s order without admitting or denying the findings that it violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934.

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Securities Attorney at Sallah Astarita & Cox | 212-509-6544 | | Website | + posts

Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page -, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.

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