Jump to content Jump to menu
Why Register?

Shearman FCPA Website: Cases Logo Shearman & Sterling LLP FCPA.Shearman.com: The One-Stop Resource on the Foreign Corrupt Practices Act

SEC v. Robert Philip, 07-cv-1836 (D. Ore. 2007)

 
:
Schnitzer Steel - Robert Philip
:
SEC Civil
:
December 13, 2007
:
SEC v. Robert Philip, 07-cv-1836 (D. Ore. 2007)
:
Manufacturing/Engineering
:
China, South Korea
:
1999; 2000; 2001; 2002; 2003; 2004
:
Managers of Chinese government-owned steel mills; Schnitzer's government-owned customers in China; managers of privately-owned steel mills in China and South Korea.
:
Robert Philip served in the role of President and Chief Executive Officer of Schnitzer Steel Industries, Inc. during the period from 1999 through 2004. Schnitzer Steel, an Oregon-based corporation, manufactured and sold steel around the world. From at least 1999 through 2004, Philip authorized Schnitzer to pay bribes in the form of cash kickbacks and other gifts to officials at Chinese government-owned steel mills to procure sales contracts. Philip had Schnitzer employees describe these improper payments as "sales commissions" and "rebates." Schnitzer generated more than $96 million in revenue due to these bribes. In addition, during this period, Philip also authorized Schnitzer to pay another $1.7 million in bribes to managers of privately-owned steel mills in both China and South Korea without disclosing such payments in Schnitzer's internal records and public filings. These improper payments resulted in more than $500 million in revenue for Schnitzer. Philip also failed to implement internal controls related to the FCPA during this time. Schnitzer's compliance department eventually uncovered the improper payments and the SEC took action against both Philip and Schnitzer Steel. Philip agreed to disgorge bonuses, as well as pay prejudgment interest and a civil penalty for violating the anti-bribery, recordkeeping and internal control provisions of the FCPA. He also agreed to an order enjoining him from further violations of the FCPA. Schnitzer, prior to this, in October 2006, paid $7.7 million in disgorgement for related charges brought by the SEC and an additional $7.5 million in penalties to settle criminal charges brought by the Department of Justice.
:
Aiding and abetting books and records, Anti-bribery (Other Persons), Internal Controls (Individual)
:
Civil penalty, Disgorgement, Prejudgment Interest
:
Disgorgement of $169,863.79 in bonuses paid to him by Schnitzer Steel plus a $75,000 civil penalty plus $16,536.63 in prejudgment interest.
:
261,400
:
0
:
Officer of Issuer
:
CEO, President
:
U.S.
:
Contract Procurement/Retention
:
600,000,000
:
Cash
:
Direct
:
1,900,000
:
China, South Korea
:
China, South Korea
:
No