On February 28, 2017, Pomerantz LLP was appointed Lead Counsel in a class action lawsuit against Rio Tinto plc (“Rio Tinto” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 16-cv-09572, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Rio Tinto American Depositary Receipts (“ADRs”) between March 16, 2012 and November 14, 2016, both dates inclusive (the “Class Period”), seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
Rio Tinto, a mining and metals company, finds, mines, and processes mineral resources. The Company mines and produces aluminum products, including bauxite, alumina, and aluminum; copper, gold, silver, and molybdenum, as well as nickel; diamonds, titanium dioxide feedstocks, borates, and salt, as well as high purity iron, metal powders, zircon, and rutile; uranium; iron ore; and thermal coal, and coking or metallurgical coal. Rio Tinto has operations in Australia, North America, Asia, Europe, Africa, and South America. At all relevant times, Rio Tinto has held a significant stake in the Simandou iron mine, located in southern Guinea.
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Rio Tinto violated anti-corruption laws in connection with its operations with respect to the Simandou project; (ii) the foregoing violations would expose the Company to significant scrutiny and large fines; and (iii) as a result of the foregoing, Rio Tinto’s public statements were materially false and misleading at all relevant times.
On November 9, 2016, Rio Tinto announced that on August 29, 2016, “Rio Tinto became aware of email correspondence from 2011 relating to contractual payments totalling US$10.5 million made to a consultant providing advisory services on the Simandou project in Guinea,” that the Company had suspended Energy & Minerals chief executive Alan Davies, and that the Company’s Legal & Regulatory Affairs group executive Debra Valentine had resigned from her role.
On November 14, 2016, post-market, Bloomberg News published an article entitled “Rio CEO Says Staff ‘Shocked’ by Probe That May Take Years.” On this news, as the market processed the significance and scope of the investigation that the Company faced, Rio Tinto’s ADR price fell $1.52, or 3.83%, to close at $38.13 on November 15, 2016, the following trading day.
On November 15, 2016, post-market, Rio Tinto announced the termination of Mr. Davies and Ms. Valentine. On this news, Rio Tinto’s ADR price fell $0.77, or 2.02%, to close at $37.36 on November 16, 2016.
On November 18, 2016, pre-market, Bloomberg News reported that Guinea’s Mines and Geology Minister, Abdoulaye Magassouba, had written a letter to Rio Tinto’s Chief Executive Officer, Jean-Sébastian Jacques, asking him to provide details of the internal inquiry. On November 18, 2016, pre-market, Bloomberg News also published an article entitled “Rio Tinto Offered Bribe for Mine, Ex-Guinea Minister Says,” reporting that the head of Rio Tinto’s Guinea operation had offered the country’s former mining minister a bribe in connection with the Simandou project.
On these disclosures, Rio Tinto’s ADR price fell $1.01, or 2.69%, to close at $36.55 on November 18, 2016.