When it comes to chasing corporate miscreants the United States Securities and Exchange Commission (SEC) leaves ASIC in the shade.

Key points: After the Riversdale takeover, Rio's internal modelling found the Mozambique mine has a value of down to negative $9bn

After the Riversdale takeover, Rio's internal modelling found the Mozambique mine has a value of down to negative $9bn SEC says executives worried about a "pattern of performance failure"

SEC says executives worried about a "pattern of performance failure" Mr Albanese and Mr Elliott have both left Rio and will fight the fraud allegations

It's much more proactive, it goes in hard, it doesn't just target companies for their misdeeds, but the individual perpetrators.

Think Enron where the chief financial officer and chief accountant went to jail.

Former NASDAQ boss and ponzi scheme operator Bernie Madoff received a 150-year jail sentence and $18 billion fine.

The banks behind the GFC paid billions of dollars in fines (and some of their bosses could consider themselves fortunate not to have also ended up in jail).

Compared to the SEC, ASIC's record against the big end of town is somewhat hollow.

In typically American "out there" style, the SEC also explains itself, and offers opinions, and this is where we get a real insight into how Rio Tinto, former CEO Tom Albanese, and former chief financial officer Guy Elliott, have found themselves charged with fraud.

According to the head of corporate governance at the University of Technology Sydney, Professor Thomas Clarke, it's "one of the most serious corporate misdemeanours a large Australian corporation has been involved in".

What went wrong in Mozambique?

Rio Tinto's nearly $4 billion purchase of the Riversdale Mining Company in Mozambique in April 2011 came four years after the disastrous $40 billion acquisition of aluminium giant Alcan.

Alcan nearly sent Rio to the wall as the Global Financial Crisis took hold and its value was repeatedly written down.

In analysing the Riversdale transaction, the SEC goes straight to Alcan.

"This high-profile transaction was Rio Tinto's second large-scale acquisition under Albanese's leadership and Rio had already experienced dramatic setbacks with Albanese's first large-scale acquisition, Alcan Inc,"

"The Mozambique acquisition was expected to restore the market's confidence in Albanese's deal-making acumen, but on the ground realities in Mozambique quickly undermined that narrative."

"Quickly" being an understatement.

Everything that could go wrong with Riversdale did and within months, according to the SEC, Rio Tinto's own modelling had determined it had a value of between negative $3.45 billion and negative $9 billion.

Even those negative valuations it says, "rested on aggressive assumptions".

Rio Tinto purchased the Mozambique coal assets for $3.7bn in 2011 and sold them for $50m three years later ( Supplied: Rio Tinto )

Was the market kept informed?

It was the failure to publicly reveal the true picture of Riversdale as Rio Tinto raised billions of dollars from US investors which has led to the fraud charges.

According to the SEC, "Albanese and Elliott learned and understood the significance of the reserves and resources write down [at Riversdale]".

It quotes an email exchange between the two in which Mr Albanese says, "the market won't see what Rio Tinto assumed for the acquisition".

"In other words," said the SEC, "investors would not know that Rio Tinto's 80 per cent write down was far worse than the company had expected when it acquired Riversdale."

Former Rio Tinto chief executive Tom Albanese has been accused by US authorities of covering up the extent of the Mozambique writedown. ( Christinne Muschi, file photo: Reuters )

'Pattern of failure'

So, two big acquisitions for Rio under the Albanese/Elliott regime and two big duds, and this, according to the SEC, is why they hid the bad news from their board of directors and the market.

"Both Albanese and Elliott were familiar with the impairment process based on, among other things, their experience with Alcan," the SEC said.

"Albanese and Elliott shared responsibility for the Alcan acquisition.

"Elliott understood that further impairments on the heels of Alcan would reflect a 'pattern of evaluation failure or performance failure'."

Both Mr Albanese and Mr Elliott, as well as Rio Tinto, have denied the SEC's allegations of fraud.

And one final point, the SEC makes another interesting observation.

"Elliott had concerns that Albanese was too inclined towards growth at the expense of value."

Whether or not the two men are convicted of fraud, history will show that on that last issue, Guy Elliott's thoughts were apparently correct.