The U.S. Securities and Exchange Commission announced in February that it had entered into a settlement agreement with Goodyear Tire & Rubber Co. to resolve claims that Goodyear violated the books and records provisions of the Foreign Corrupt Practices Act (FCPA). The allegations involved bribes paid by two of the company’s African subsidiaries. Goodyear agreed to pay $14.1 million in disgorgement and $2.1 million in prejudgment interest, but no civil fine, in connection with the administrative order entered by the SEC.
On balance, the result was favorable for Goodyear, as it escaped paying a fine for its conduct. In this respect, the case highlights the benefits when a company cooperates with the SEC. It also underscores, however, the risks of inadequate due diligence in acquisitions, which is perhaps the most significant takeaway from the settlement for companies and their counsel.
The Alleged Misconduct
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