“While allegedly concealing the environmental and economic risks posed by its dam, Vale misled investors and raised more than $1 billion in our debt markets while its securities actively traded on the NYSE,” said Melissa Hodgman, associate director of the SEC’s enforcement division.
Vale representatives didn’t immediately respond to a request for comment. The firm’s Brazil-traded stock declined 0.6% to 81.65 reais per share at 9:53 a.m. New York time.
The SEC’s complaint, filed in federal court in Brooklyn, is seeking civil penalties, ill-gotten gains plus interest. According to the regulator, in addition to “immeasurable environmental and social harm” caused by the collapse, the incident helped shrink Vale’s market capitalization by $4 billion.
During President Joe Biden’s administration, the SEC has been increasingly focused on ESG disclosures and formed a task force in its enforcement division in last year to focus on the issue.
In its complaint, the SEC said that the Brumadinho dam collapse was one of the worst mining disasters in history, burying more than 150 people alive. The collapse released nearly 12 million cubic tons of mining waste, or “tailings” – a toxic sludge of iron, manganese, aluminum, copper, and other rare earth minerals, the regulator said.
The regulator added that Vale intentionally concealed signs of the dam’s instability from the investors and Brazilian authorities. Over a period of more than two years, Vale obtained eight fraudulent stability...
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