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In re Schnitzer Steel Industries

 
:
Schnitzer Steel -- Schnitzer Steel Industries, Inc.
:
SEC Civil
:
October 16, 2006
:
In re Schnitzer Steel Industries
:
Building Products
:
China, South Korea
:
1999; 2000; 2001; 2002; 2003; 2004
:
Government officials in China and South Korea
:
Schnitzer Steel settled this action with the SEC without admitting or denying the following facts alleged in the SEC's order.

Schnitzer Steel Industries is an Oregon-based steel company that sells scrap metal. From at least 1999 through 2004, Schnitzer paid bribes in the form of cash kickbacks and other gifts to officials at Chinese government-owned steel mills to procure sales contracts. Schnitzer employees described 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, Schnitzer also paid another $1.7 million in bribes to managers of privately-owned steel mills in both China and South Korea without disclosing such payments in its internal records and public filings. These improper payments resulted in more than $500 million in revenue for Schnitzer. Schnitzer's compliance department eventually uncovered the improper payments and the SEC took action against both Robert Philip, CEO, and the corporation. Schnitzer, in October 2006, paid $7.7 million in disgorgement and prejudgment interest.
:
Anti-bribery (Domestic Concern), Internal Controls (Individual)
:
Civil penalty, Disgorgement
:
Disgorgement of $6,279,095 and $1,446,106 in pre-judgment interest.
:
7,725,201
:
0
:
Issuer
:
Regional Sales
:
U.S.
:
Contract Procurement/Retention
:
98,000,000
:
Cash, Gifts
:
Direct
:
2,800,000
:
Japan, United States
:
South Korea
:
No