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. Given that Waxman is 52 years old, it is 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. 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. (Philip Services went bankrupt, then emerged from bankruptcy protection and moved its head office to the United States.) 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.
More than two years later, the securities commission issued a 22-page statement of allegations accusing PSC founders Allen and Philip Fracassi, Waxman, former vice-presidents Marvin Boughton, Graham Hoey, John Woodcroft and Colin Soule of failing to make full disclosure. The OSC dropped allegations against Philip Services in April of 2007 and settled with some of the 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. Woodcroft and Boughton were banned for 10 years, while Hoey was banned for five years. Each also agreed to pay $100,000 toward the cost of investigation. Soule, who settled the charges against him separately, was banned for three years and paid $50,000.