Goodyear FCPA Fine Highlights Benefits of Cooperation and Robust Compliance Controls

March 02, 2015

The Goodyear Tire & Rubber Company (“Goodyear”), one of the world’s largest tire companies, reached a significant settlement with the U.S. Securities & Exchange Commission (“SEC”) in connection with charges that two of its subsidiaries violated the Foreign Corrupt Practices Act (“FCPA”). The February 24 settlement, the SEC’s second of 2015, is notable because it highlights how cooperation with the SEC and adequate compliance and oversight over corporate subsidiaries can mitigate FCPA penalties.

The settlement stems from Goodyear’s alleged failure to prevent or detect more than $3.2 million in bribes by two indirect subsidiaries during a four-year period from 2007 through 2011, as a result of Goodyear’s allegedly inadequate FCPA compliance controls over its subsidiaries. Although Goodyear agreed to pay $16 million to settle charges that its indirect subsidiaries paid bribes to government owned and affiliated entities to obtain tire sales in Kenya and Angola in violation of the FCPA, the SEC did not find that Goodyear itself violated the anti-bribery provisions of the FCPA. Rather, the SEC’s order finds that Goodyear violated the FCPA’s books and records provision by falsely recording the bribes in its consolidated books and records as legitimate expenses.

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