In December 2007, the SEC filed a settled civil enforcement action against Robert Philip, the former Chairman and CEO of Schnitzer Steel Industries, Inc. (Schnitzer), for violating the FCPA's anti-bribery, books and records, and internal control provisions. According to the SEC, between 1999 and 2004, Schnitzer paid more than $1.9 million in bribes to managers of Chinese steel mills (owned in whole or in part by the Chinese government) and South Korean steel mills to induce the managers to purchase product from Schnitzer. The SEC charged that Philip knew of and authorized the bribe payments, aided and abetted Schnitzer's failure to make and keep accurate books and records by authorizing false descriptions for the improper payments in the company's records, and failed to implement internal controls reasonably designed to detect and prevent Schnitzer's FCPA violations. As to the later charge, the SEC alleged that Philip, as Schnitzer's CEO, had the authority to implement FCPA internal controls (including the training, education, and monitoring of employees, agents, and subsidiaries), but failed to require the company to devise sufficient internal controls to detect and prevent FCPA violations. Based on the above conduct and without admitting or denying the SEC's allegations, Philip agreed to pay $250,000 to settle the FCPA allegations (including disgorgement of approximately $170,000 the SEC alleged Philip received in bonus compensation from profits generated by the improper payments).
This is the third FCPA enforcement action against Schnitzer or its former executives. In June 2007, the SEC filed a settled civil enforcement action against Si Chan Wooh, a former Schnitzer executive, who agreed to pay approximately $40,000 in combined fees and penalties for violating the FCPA's anti-bribery provisions. In October 2006, Schnitzer settled related FCPA enforcement by the DOJ and the SEC actions by agreeing to pay approximately $15 million in combined fines and penalties.