Robert Waxman, a former senior employee of the Waxman family scrap recycling business in Hamilton, Ontario and a former Philip Services Corp. executive, has been banned for 20 years from serving as an officer or director of a public company under a settlement reached in December, 2007 with the Ontario Securities Commission (OSC). The agreement includes a ten-year ban from trading in securities and payment of $125,000 towards the OSC’s costs.
Speaking on behalf of the OSC hearing panel, Commissioner Paul Bates said the penalty is “at the lowest acceptable level” but said the decision takes into account the fact that Waxman is 52 years old, thus making it “tantamount to a life ban.”
Waxman was a key figure in a decade-old financial scandal surrounding the Hamilton-based metal recycling division of Philip Services, where a large amount of valuable scrap copper went missing.
Waxman been president of Philip Services’ main division and a director until he left the company, and his departure along with the scrap copper controversy presaged a rapid decline in the company’s shares and the eventual bankruptcy of Philip Services.
Philip Services revealed in early 1998 that it couldn’t find $88 million worth of recycled copper, and its shares tumbled from a peak of $27.90 to penny-stock levels. Around that time the company became embroiled in a financial scandal shortly after completing a US$364-million share offering. It later emerged that Waxman, who headed the division where the copper went missing, had been quietly sidelined by the company in September 1997, shortly before it revealed the problem and announced Waxman’s departure in January 1998.
The OSC had laid a complaint in August 2000 against the company and seven individuals, including Waxman. The OSC dropped allegations against Philip Services in April of 2007 and settled with five other key individuals that year. Brothers Allen and Philip Fracassi and three others agreed in March 2006 to pay $100,000 each and be barred from serving as officers or directors of public companies for between five and 12 years.
Several years ago Robert Waxman’s father Chester lost a significant civil lawsuit — the longest in Ontario history — brought by Chester’s brother Morris and another son who claimed, successfully, that Morris had been defrauded of his rightful share to half of I. Waxman and Sons in a multi-year, multi-million-dollar scheme that also excluded Morris Waxman from the proceeds of the sale of the business to the company that became Philip Services Inc. Robert Waxman testified on behalf of his father Chester Waxman in the case that his side eventually lost.
Philip Services has emerged from bankruptcy protection and has moved its head office to the United States.