Schnitzer settles $15.2 million for
alleged bribery charges
Schnitzer Steel Industries, Inc., headquartered
in Portland Oregon, has finalized settlements with the United States
Department of Justice and the United States Securities and Exchange
Commission resolving an investigation into their practice of payments
to purchasing managers of the Company’s customers in Asia
for export sales of recycled ferrous metals.
Schnitzer reached a $7.7 million settlement and
it will pay an additional $7.5 million fine. The aggregate payments
of $15.2 million (including interest charges) under the settlement
are consistent with the $15 million reserve that Schnitzer Steel
announced in its quarterly financial reports for the first and third
quarters of fiscal 2006.
The Company’s Korean subsidiary pled guilty
to Foreign Corrupt Practices Act anti-bribery and books and records
provisions, conspiracy and wire fraud charges and will pay a fine
of $7.5 million.
The Company agreed to an order, issued by the
Securities and Exchange Commission, to cease and desist from the
past practices that were the subject of the investigation and to
pay $7.7 million of profits and prejudgment interest.
Schnitzer Steel and the government agreed to a
deferred prosecution agreement, under which the government will
not prosecute the Company if the Company meets the conditions of
the agreement for three years.
Under the terms of the settlement, Schnitzer Steel
has employed a compliance officer and designed and implemented a
comprehensive compliance program, which will be overseen by the
Audit Committee of the Company’s Board, and will engage a
compliance consultant to advise the compliance officer and the Board
on the compliance program.