SEC settles enforcement action for misleading sustainability report

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Last April, the SEC filed a complaint against Vale S.A. charging that it made false and misleading claims about the safety of its dams prior to the January 2019 collapse of its Brumadinho dam. This week, Vale settled those charges with the SEC by paying $56 million.

Here is one excerpt from this blog by Cooley’s Cydney Posner:

Significantly, these statements were contained, not just in Vale’s SEC filings, but also, in large part, in its sustainability reports. In discussing the charges, the press release made reference to the SEC’s Climate and ESG Task Force formed in 2021 in the Division of Enforcement “with a mandate to identify material gaps or misstatements in issuers’ ESG disclosures, like the false and misleading claims made by Vale.”

And here’s another excerpt:

It’s worth emphasizing that the complaint frequently looked to Vale’s sustainability reports (to which Vale’s SEC filings sometimes made reference) for many of the alleged deceitful statements. In addition, a number of Vale executives reviewed, approved and certified statements, which the SEC contended were false, in Vale’s 2016 and 2017 Sustainability Reports.