The FCA said that Rio Tinto, had it complied with its obligation to carry out an impairment test, would have impaired RTCM in its August 2012 half year results.
The SEC's complaint, which was filed in federal court in Manhattan, alleges that Rio Tinto, its former CEO Thomas Albanese, and its former CFO Guy Elliott failed to follow accounting standards and company policies to accurately value and record its assets.
Rio Tinto was separately fined £27.4m by the UK's financial watchdog for breaching disclosure and transparency rules over its handling of the Mozambique mining assets. 2010 - Mozambique's transport ministry says that Mozambique will use the Zambezi river to enable inland coal assets to get to a port, which has yet to be fully developed.
The FCA said Rio Tinto was required to carry out an impairment test and its failure to do so demonstrated a "serious lack of judgement".
"Rio Tinto raised a total of $5.5 billion in USA debt offerings that incorporated materially misleading statements and omissions concerning RTCM's valuation", the lawsuit alleges.
When Rio Tinto acquired the Mozambique mine, its valuation was based on a plan to move rapidly into coal production.
In its complaint filed Tuesday, the SEC accused Rio Tinto, Albanese and Elliott of trying "to hide the rapid and dramatic decline in value" of the coal business.
The Anglo-Australian giant bought its Mozambique assets for US$3.7 billion in 2011 and sold them for just US$50 million three years later, forced to write off $US3.0 billion from its value.
"They tried to save their own careers at the expense of investors by hiding the truth", Paikin said.
Rio Tinto says it will defend itself vigorously against the SEC's allegations.
In light of the case, Shell (LON:RDSA) announced that Guy Elliott was leaving his role as a non-executive director at the oil company, effective immediately, as a result of his involvement in the ongoing legal investigation.
In a statement, Shell said: "We hope he satisfactorily resolves those proceedings and, that in that event, he would like to be considered for rejoining the Board". Zacks Investment Research raised shares of Rio Tinto PLC from a "hold" rating to a "strong-buy" rating and set a $56.00 target price for the company in a research report on Saturday, October 7th.
Rio Tinto recognised the impairment in January 2013 after an executive at the company's Technology & Innovation Group discovered the assets were being carried at an inflated rate. After a second reduction, Rio Tinto sold the Mozambique subsidiary for $50 million, billions of dollars below the acquisition price.
The FCA maintained that the penalty would have been a larger £39.1 million, yet had been reduced because Rio Tinto had agreed to settle more promptly. BidaskClub cut shares of Rio Tinto PLC from a "strong-buy" rating to a "buy" rating in a report on Tuesday, July 25th.
"Rio Tinto and its top executives allegedly failed to come clean about an unsuccessful deal that was made under their watch", Steven Paikin, co-director of the the commission's enforcement division, said in a statement.
"Reflecting the size of the company", Steward added, "this is the largest fine imposed to date by the FCA for a breach of rules relating to a firm's official listing".
Equities researchers at Jefferies Group upped their FY2017 EPS estimates for Rio Tinto PLC in a report issued on Thursday. It added that the case was now closed.