International mining company Rio Tinto and two of its former executives were accused of fraud by the U.S. Securities and Exchange Commission Tuesday for allegedly inflating the value of coal assets that ultimately sold for a little more than one one-hundredth of what it was bought for only a few years earlier.

Former CEO Thomas Albanese and former CFO Guy Elliott are alleged to have orchestrated the purchase of the coal assets for $3.7 billion. According to regulators, they then failed to follow accounting standards and internal policies regarding the coal assets, which were located in Mozambique, according to the SEC. The defendants are variously charged with a dozen anti-fraud, reporting, books and records and internal controls provisions.

According to the SEC in Securities and Exchange Commission v. Rio Tinto, 17-cv-07994, the coal acquisition’s costs were based on incorrect assumptions made by Rio Tinto about the mining and shipping operations associated with it. The project, regulators said, suffered setbacks almost immediately, as the defendants learned there was less coal and of a lower quality than expected. Additionally, the transportation plan the company was counting on was rejected by the Mozambique government.

The coal mining operation came on the heels of other financial problems associated with Rio Tinto’s acquisition of Canadian aluminum manufacturer Alcan. The SEC alleges that Albanese and Elliott feared the consequences of another costly business decision. Rather than acknowledge the challenges faced at the Mozambique coal operation, the defendants attempted to conceal the problems through misleading financial statements ahead of stateside debt offerings. Rio Tinto raised $5.5 billion that was raised from investors, the majority after local executives at the coal site told Albanese and Elliott the operation was likely in the red $680 million.

“As alleged in our complaint, Rio Tinto’s top executives allegedly breached their disclosure obligations and corporate duties by hiding from their board, auditor and investors the crucial fact that a multibillion-dollar transaction was a failure,” Stephanie Avakian, co-director of the SEC’s Enforcement Division, said in a statement.

Regulators said the fraud continued until early 2013, when top officials at the company discovered the inflated coal asset value. An internal review by the company was quickly followed by news Albanese was resigning, and the coal assets were reduced by more than 80 percent, or more than $3 billion. The assets would later sell at an even greater discount of $50 million.

Gibson, Dunn & Crutcher partners Mark Kirsch and Richard Grime represent Rio Tinto in the action. Neither could be reached for comment. A request for comment from the company was also not returned.

Albanese is represented by Jones Day partners David Woodcock and Peter Romatowski. In a statement, Albanese denied the allegations.

“I echo Rio Tinto’s confidence that these will be proved baseless in court,” he said.

Paul, Weiss, Rifkind, Wharton & Garrison partner Walter Ricciardi is representing Elliott.

A spokeswoman said in a statement that he too “fully refutes” the charges and will “be vigorously contesting them.”

The suit was filed in the U.S. District Court for the Southern District of New York.