Staff of the Ontario Securities Commission v. Robert Waxman, 2008 ONSEC 1

Citation: Robert Waxman, 2008 ONSEC 1

Date: 2008-01-08

IN THE MATTER OF THE SECURITIES ACT R.S.O. 1990, c. S.5, AS AMENDED

and -

IN THE MATTER OF ROBERT WAXMAN

HEARING HELD PURSUANT TO SECTION 127 OF THE ACT

SETTLEMENT HEARING RE: ROBERT WAXMAN

HEARING: Friday, December 21, 2007

PANEL: Paul K. Bates - Commissioner and Chair of the Panel David L. Knight - Commissioner Suresh Thakrar - Commissioner

APPEARANCES: Karen Manarin Melanie Adams

for Staff of the Ontario Securities Commission

Alan Lenczner Ed Lederman

for Robert Waxman

ORAL RULING AND REASONS

The following text has been prepared for the purpose of publication in the Ontario Securities Commission Bulletin and is based on excerpts of the transcript of the hearing. The excerpts have been edited and supplemented and the text has been approved by the Chair of the Panel for the purpose of providing a public record of the decision.

Chair:

1This was a hearing under section 127 of the Securities Act, R.S.O. 1990, c. S.5, as amended, (the "Act") for the Ontario Securities Commission (the "Commission") to consider whether it is in the public interest to approve a proposed Settlement Agreement between Staff of the Commission ("Staff") and the respondent Robert Waxman ("Mr. Waxman").

2We have read the written submissions, and heard the oral submissions and we have decided to approve the Settlement Agreement as being in the public interest.

3By way of context, during the summer of 1997, Philip Services Corp. ("Philip") commenced a process to identify and calculate potential items to be included in a restructuring charge. In the fall of 1997, Philip issued a prospectus for a public offering, which did not contain any provision with respect to these items.

4This proceeding is concerned with the role of Mr. Waxman as a director of Philip and as president of the Metals Group – as we have heard this morning, the largest operating division of Philip. This case involved the failure to ensure that Philip filed financial statements in a prospectus that contained full, true and plain disclosure.

5In the Settlement Agreement, Mr. Waxman admits that:

(a) he acted contrary to the public interest by failing to ensure that Philip filed financial statements in the prospectus that contained full, true and plain disclosure of a restructuring charge in the amount of $155.7 million. A significant portion of the restructuring charge included goodwill write-downs relating to a number of acquisitions the Company had concluded over the period 1993 to 1996;

(b) he acted contrary to the public interest by failing to ensure that Philip filed financial statements in the prospectus that contained full, true and plain disclosure of approximately $31 million for holding certificates. The use of holding certificates involved the "sale and repurchase" of metal inventory without a corresponding physical movement of the inventory, which immediately generated cash for Philip;