By Chris Prentice
WASHINGTON (Reuters) -The U.S. Securities and Trade Fee (SEC) on Thursday sued Brazilian miner Vale SA (NYSE:) for allegedly making false and deceptive disclosures in regards to the security of its dams forward of a 2019 catastrophe that killed 270 folks.
Starting in 2016, Vale manipulated dam security audits, obtained fraudulent stability certificates and misled native governments, communities and buyers with its environmental, social and governance (ESG) disclosures, the SEC alleged in a press release and courtroom submitting.
Vale Chief Monetary Officer Gustavo Pimenta mentioned in a name with analysts on Thursday that the lawsuit was anticipated and that the corporate would dispute all allegations in it.
In January 2019, the corporate’s dam within the Brazilian city of Brumadinho burst, unleashing a river of poisonous mining waste that crushed a Vale eating corridor and destroyed components of the close by countryside.
Vale, one of many world’s largest producers of iron ore, allegedly knew for years that its Brumadinho dam didn’t meet internationally acknowledged requirements for dam security, the SEC mentioned.
Along with the demise toll, the catastrophe brought about “immeasurable environmental and social hurt” and led to greater than $Four billion in losses to Vale’s market capitalization, the company mentioned.
“Whereas taking stuffed with benefit of the capital markets in the USA, Vale dedicated securities fraud by deliberately concealing the dangers that considered one of its older and extra harmful dams, the Brumadinho dam, would possibly collapse,” the SEC mentioned.
Underneath Democratic management, the SEC has pledged to crack down on public corporations which may be inflating their ESG credentials to draw buyers and burnish their repute, or which can be underplaying associated dangers.
The SEC final month unveiled a landmark proposal that required U.S.-listed corporations to reveal climate-related dangers. Final 12 months, it created an enforcement job drive to police misconduct associated to ESG points.
The SEC’s criticism, filed in federal courtroom in New York, charged Vale with violating anti-fraud and reporting provisions of U.S. securities legal guidelines.
Vale shares briefly turned unfavorable after information of the SEC costs earlier than rising to commerce about 1.3% larger in Sao Paulo.