Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, December 13, 2007

Former Schnitzer Steel CEO Settles FCPA Charges

The SEC charged the former Chairman and CEO of Schnitzer Steel Industries, Inc., with violating anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) by approving cash payments and other gifts to officials at Chinese government-owned steel mills to entice their business.  Without admitting or denying the allegations, Robert W. Philip of Portland, Ore., agreed to pay more than $250,000 to settle the SEC’s charges.  The SEC alleges that from at least 1999 through 2004, Philip authorized payment of more than $200,000 in cash bribes and other gifts to managers at government-owned steel mills in China to induce them to purchase scrap metal from Portland-based Schnitzer. The Commission alleges that Schnitzer generated more than $96 million in revenue and more than $6.2 million in profits from sales to customers who had received the improper payments. The complaint further alleges that Philip authorized more than $1.7 million in payments to managers of privately owned steel mills in both China and South Korea, generating more than $500 million in additional revenue for the company.

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