Brazilian mining company Vale has reached a $56 million settlement with the Securities and Exchange Commission to resolve charges for allegedly making “false and misleading disclosures about the safety of its dams,” the SEC announced. In January 2019, Vale’s Brumadinho dam collapsed, killing 270 people, and “causing immeasurable environmental and social harm,” the SEC said.
According to the SEC’s complaint, filed in April 2022 in U.S. District Court for the Eastern District of New York, “Vale manipulated multiple dam safety audits; obtained numerous fraudulent stability certificates; and regularly misled local governments, communities, and investors about the safety of the Brumadinho dam through its environmental, social, and governance (ESG) disclosures.”
The SEC further alleged, “for years, Vale knew that the Brumadinho dam, which was built to contain potentially toxic byproducts from mining operations, did not meet internationally recognized standards for dam safety. However, Vale’s public sustainability reports and other public filings fraudulently assured investors that the company adhered to the ‘strictest international practices’ in evaluating dam safety and that 100 percent of its dams were certified to be in stable condition.”
The settlement, which must be approved by the court, requires Vale to pay a $25 million civil penalty, and $31 million in disgorgement and pre-judgment interest.
In a statement acknowledging the settlement, the company said, “the SEC will not oppose Vale’s motion to dismiss all claims that the company acted with fraudulent or reckless intent regarding its disclosures. Vale continues with its commitment to remediate and repair the damage caused by the dam collapse in Brumadinho.” 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.