The former chairman and ceo of Schnitzer Steel Industries, Inc. resolved charges on December 13, 2007 brought by the Securities and Exchange Commission under the U.S. Foreign Corrupt Practices Act. Robert W. Philip, 60, of Portland, Oregon, will pay about $250,000 to settle charges that he violated the antibribery, books and records and internal controls provisions of the FCPA (Section 30A of the Securities Exchange Act of 1934 [15 U.S.C. § 78dd-1], Section13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)], and Section 13(b)(2)(B) [15 U.S.C. § 78m(b)(2)(B)]). He served as Schnitzer’s president beginning in 1991, as its chief executive officer from 2002, and as chairman from 2004. He left the company in May 2005.
In October 2006 — after an internal investigation and self-disclosure to authorities — Schnitzer paid more than $15 million to resolve FCPA violations with the SEC and the Department of Justice. In June 2007, Si Chan Wooh, Schnitzer’s former executive vice president and head of a foreign subsidiary, agreed with the SEC to pay about $40,000 in disgorgement, interest and penalties for FCPA violations.
The SEC’s complaint against Mr. Philip said that from at least 1999 through 2004, Schnitzer paid more than $1.9 million in bribes to managers of steel mills in China and South Korea to induce them to purchase scrap metal from Schnitzer, generating over $500 million in gross revenue for the company. He authorized the payment of the bribes, aided and abetted Schnitzer’s failure to make and keep accurate books and records, and failed to implement internal controls reasonably designed to detect and prevent Schnitzer’s FCPA violations. The SEC’s complaint alleged that after approving the improper payments, he instructed that they be falsely recorded in Schnitzer’s books as “sales commissions,” “commission to the customer,” “refunds,” or “rebates.”
Schnitzer Steel Industries Inc. trades on NASDAQ under the symbol SCHN.
View prior posts about Schnitzer Here.
View the SEC’s Litigation Release No. 20397 (December 13, 2007) Here.
View the SEC’s complaint in Securities and Exchange Commission v. Robert W. Philip, Case No. CV 07-1836 (MO) (D. Or. filed December 13, 2007) Here.