In the Matter of Goodyear Tire & Rubber Company (2015)

• Case Name
• In the Matter of Goodyear Tire & Rubber Company (2015)

• Date Filed
• 02/24/2015

• Enforcement Agency
• SEC

• Countries
• Angola, Kenya

• Foreign Official
• Employees of various Kenyan government-owned or affiliated entities; Employees of various Angolan government-owned or affiliated entities.

• Date of Conduct
• 2007 to 2011

• Nature of Business
• The Goodyear Tire & Rubber Company is an Akron, Ohio based tire manufacturer with facilities in twenty-two countries and sales around the world.  Goodyear’s common stock is registered with the SEC pursuant to Section 12(b) of the Exchange Act and is listed on the NASDAQ Stock Market.

• Influence to be Obtained
• According to the SEC, from 2007 until 2011, Goodyear’s subsidiaries in Kenya and Angola engaged in the practice of paying bribes to various government officials in exchange for business.
  
  In Kenya, the SEC claims that managers of Goodyear’s majority-owned subsidiary, Treadsetters, paid bribes totaling approximately $1.5 million to employees of several Kenyan government-owned or affiliated entities.  According to the SEC, Treadsetters’ managers also paid $14,457 in improper payments to local government officials including city council members, local police, and tax authorities.  The bribery scheme was allegedly organized by Treadsetters’ managers who approved phony promotion payments and directed the company’s finance department to issue checks to cash.  Once the checks were cashed, the payments were allegedly used as bribes but were recorded as promotional expenses on the company’s books and records.
  
  In Angola, the SEC claims that a manager of Goodyear’s subsidiary, Trentyre, paid $1.6 million in bribes to employees of Angolan government owned and affiliated entities and another $64,713 to local police and tax authorities.  According to the SEC, to generate the funds for the improper payments, Trentyre falsely marked-up the cost of its tires by adding phony freight and customs clearing costs.  Although the mark-ups were recorded as freight and customs clearing costs on the company’s books and records, the SEC alleges that they were used as bribes.

• Enforcement
• On February 24, 2015, the SEC announced that it settled its charges against Goodyear through an administrative proceeding.  According to the cease-and-desist order, Goodyear was required to disgorge $14,122,525 and pay $2,105,540 in prejudgment interest, totaling a $16,228,065 sanction.

• Amount of the Value
• Approximately $3,200,000.

• Amount of Business Related to Payment
• Not Stated

• Intermediary
• Subsidiaries 

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 16,228,065

• Compliance Monitor
• No

• Reporting Requirements
• Yes (1 Years)

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 16,228,065

Goodyear Tire & Rubber Company

• Citation
• In the Matter of Goodyear Tire & Rubber Co., Admin. Proc. File No. 3-16400 (Feb. 24, 2015).

• Date Filed
• 02/24/2015

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States