In re THE GOODYEAR TIRE &

   
  
   
    
   
 UNITED STATES OF AMERICA 
Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 74356 / February 24, 2015 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 3640 / February 24, 2015 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-16400 
 
 
In the Matter of 
 
THE GOODYEAR TIRE & 
RUBBER COMPANY,  
 
Respondent. 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS, PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
 
   
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”) against The Goodyear Tire & Rubber Company 
(“Goodyear” or “Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
and-Desist Proceedings Pursuant to Section 21C of the Exchange Act, Making Findings, and 
Imposing a Cease-and-Desist Order (“Order”), as set forth below.    
 
  

 2 
III. 
  
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that:  
 
Summary 
 
1. This case involves violations of the books, records, and internal control provisions of 
the Foreign Corrupt Practices Act (“FCPA”) by Goodyear.  Goodyear, headquartered in Akron, 
Ohio, is one of the world’s largest tire companies.  From 2007 through 2011, Goodyear 
subsidiaries in Kenya (Treadsetters Tyres Ltd., or “Treadsetters”) and Angola (Trentyre Angola 
Lda., or “Trentyre”) routinely paid bribes to employees of government-owned entities and 
private companies to obtain tire sales.  These same subsidiaries also paid bribes to police, tax, 
and other local authorities.  In all, between 2007 and 2011, Goodyear subsidiaries in Kenya and 
Angola made over $3.2 million in illicit payments.     
 
2. All of these bribery payments were falsely recorded as legitimate business expenses 
in the books and records of these subsidiaries which were consolidated into Goodyear’s books and 
records.  Goodyear did not prevent or detect these improper payments because it failed to 
implement adequate FCPA compliance controls at its subsidiaries in sub-Saharan Africa.   
 
Respondent 
 
 3. Goodyear, an Ohio corporation headquartered in Akron, Ohio, is one of the 
world’s largest tire manufacturers.  Goodyear has manufacturing facilities in 22 countries and sells 
tires in most countries around the world.  Goodyear’s common stock is registered with the 
Commission pursuant to Section 12(b) of the Exchange Act and is listed on The NASDAQ Stock 
Market. 
 
Other Relevant Entities 
 
 4. Magister Ltd. (“Magister”) is a wholly-owned subsidiary of Goodyear 
incorporated in Mauritius, and headquartered in South Africa.  Magister holds the shares and 
oversees the operations of the Goodyear subsidiaries in sub-Saharan Africa.  During the relevant 
time period this included Treadsetters in Kenya and Trentyre in Angola. 
 
 5. Treadsetters is a retail tire distributor incorporated and located in Kenya.  During 
the relevant time period, Treadsetters was an indirect subsidiary of Goodyear, and had annual 
revenues of approximately $20 million.  Goodyear divested its ownership interest in Treadsetters 
in 2013. 
 
 6. Trentyre is a retail tire distributor incorporated and located in Angola.  Trentyre 
is a wholly owned subsidiary of Goodyear.  During the relevant time period, Trentyre had 
annual revenues between $6 million and $20 million.   
                                                 
1
 The findings herein are made pursuant to Respondent's Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  

 3 
Improper Payments in Kenya 
 
7. Treadsetters is a retail tire distributor in Kenya.  In 2002, Goodyear acquired a 
minority ownership interest in Treadsetters.  By 2006, Goodyear had acquired a majority ownership 
interest in the company, though the day-to-day operations of Treadsetters continued to be run by 
Treadsetters’ founders and the local general manager.  During the relevant time period, Treadsetters 
had annual revenues of approximately $20 million. 
 
8. From 2007 through 2011, Treadsetters’ management regularly authorized and paid 
bribes to employees of government-owned or affiliated entities, and private companies, to obtain 
business.  The practice was routine and appears to have been in place prior to Goodyear’s 
acquisition of Treadsetters.  The bribes generally were paid in cash and falsely recorded on 
Treadsetters’ books as expenses for promotional products. 
 
 9.  Treadsetters’ general manager and finance director were at the center of the 
scheme.  They approved payments for phony promotional products, and then directed the finance 
assistant to write-out the checks to cash.  Treadsetters’ staff then cashed the checks and used the 
money to make improper payments to employees of customers, which included both government-
owned entities and private companies. 
 
 10. Between 2007 and 2011, Treadsetters paid over $1.5 million in bribes in connection 
with the sale of tires.  This included improper payments to employees of government-owned or 
affiliated entities including the Kenya Ports Authority, the Armed Forces Canteen Organization, 
the Nzoia Sugar Company, the Kenyan Air Force, the Ministry of Roads, the Ministry of State for 
Defense, the East African Portland Cement Co., and Telkom Kenya Ltd.  During that same time 
period, Treadsetters also made approximately $14,457 in improper payments to local government 
officials in Kenya, including city council employees, police, and building inspectors. 
 
 11.  Goodyear did not detect or prevent these improper payments because it failed to 
conduct adequate due diligence when it acquired Treadsetters, and failed to implement adequate 
FCPA compliance training and controls after the acquisition.   
 
Improper Payments in Angola 
 
 12. Trentyre was incorporated in 2007, and is a wholly-owned subsidiary of Goodyear.  
Trentyre is primarily engaged in selling new tires for mining equipment.  During the relevant time 
period, Trentyre had annual revenues between $6 million and $20 million.  
 
 13. From 2007 through 2011, Trentyre paid over $1.6 million in bribes to employees of 
government-owned or affiliated entities, and private companies, to obtain tire sales.  Trentyre paid 
approximately $1.4 million of these bribes to employees of government-owned or affiliated 
entities in Angola, including the Catoca Diamond Mine, UNICARGAS, Engevia Construction 
and Public Works, the Electric Company of Luanda, National Service of Alfadega, and Sonangol.  
A majority of these  improper payments were paid to employees of Trentyre’s largest customer at 
the time, the Catoca Diamond Mine, which is owned by a consortium of mining interests, 
including Endiama E.P., Angola’s national mining company, and ALROSA, a Russian mining 

 4 
company.  During the same time period, Trentyre also made approximately $64,713 in improper 
payments to local government officials in Angola, including police and tax authorities. 
 
 14. The bribery scheme was put in place by Trentyre’s former general manager.  To 
hide the scheme and generate funds for the improper payments, Trentyre falsely marked-up the 
costs of its tires by adding to its invoice price phony freight and customs clearing costs.  On a 
monthly basis, as tires were sold, the phony freight and clearing costs were reclassified to a 
balance sheet account.  Trentyre made improper payments to employees of customers both in cash 
and through wire transfers.  As bribes were paid, the amounts were debited from the balance sheet 
account, and falsely recorded as payments to vendors for freight and clearing costs. 
 
 15. Goodyear did not prevent or detect these improper payments because it failed to 
implement adequate FCPA compliance training and controls at this subsidiary.   
 
Legal Standards and Violations 
 
 16. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-
and-desist order upon any person who is violating, has violated, or is about to violate any provision 
of the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, or 
would be a cause of the violation, due to an act or omission the person knew or should have known 
would contribute to such violation. 
 
 17. Under Section 13(b)(2)(A) of the Exchange Act issuers are required to make and 
keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the 
transactions and disposition of the assets of the issuer. [15 U.S.C. §78m(b)(2)(A)]. 
 
 18. Under Section 13(b)(2)(B) of the Exchange Act issuers are required to devise and 
maintain a system of internal accounting controls sufficient to provide reasonable assurances that 
(i) transactions are executed in accordance with management’s general or specific authorization; 
(ii) transactions are recorded as necessary (I) to permit preparation of financial statements in 
conformity with generally accepted accounting principles or any other criteria applicable to such 
statements, and (II) to maintain accountability for assets; (iii) access to assets is permitted only in 
accordance with management’s general or specific authorization; and (iv) the recorded 
accountability for assets is compared with the existing assets at reasonable intervals and 
appropriate action is taken with respect to any differences. [15 U.S.C. §78m(b)(2)(B)]. 
 
 19. As described above, Goodyear subsidiaries in Kenya and Angola made improper 
payments to employees of government-owned entities and private companies to obtain business.  
These improper payments were falsely recorded as legitimate business expenses in the books and 
records of these subsidiaries which were consolidated into Goodyear’s books and records.  
Accordingly, Goodyear violated Section 13(b)(2)(A) of the Exchange Act.  As described above, 
Goodyear also violated Section 13(b)(2)(B) of the Exchange Act by failing to devise and maintain 
sufficient accounting controls to prevent and detect these improper payments.  
 
 
 

 5 
Goodyear’s Cooperation and Remedial Efforts 
 
 20. In determining to accept the Offer, the Commission considered remedial acts 
promptly undertaken by Respondent and cooperation afforded the Commission staff.  After 
receiving information about the bribes, Goodyear promptly halted the improper payments and 
reported the matter to Commission staff.  Goodyear also provided significant cooperation with the 
Commission’s investigation.  This included voluntarily producing documents and reports and other 
information from the company’s internal investigation, and promptly responding to Commission 
staff’s requests for information and documents.  These efforts assisted the Commission in efficiently 
collecting evidence including information that may not have been otherwise available to the staff.   
 
 21. Goodyear also has undertaken remedial efforts.  In Kenya, Goodyear divested its 
ownership interest in Treadsetters, and ceased all business dealings with the company.   In Angola, 
after Goodyear halted the improper payments its subsidiary lost its largest customer.  Goodyear is 
now in the process of divesting this subsidiary.   
 
 22. Goodyear also undertook disciplinary action against certain employees, including 
executives of its Europe, Middle East and Africa region who had oversight responsibility, for 
failing to ensure adequate FCPA compliance training and controls were in place at the company’s 
subsidiaries in sub-Saharan Africa.   
 
 23. Goodyear also implemented improvements to its compliance program, both specific 
to its operations in sub-Saharan Africa, and globally.  In Africa, the improvements include 
expanded on-line and in-person anti-corruption training for subsidiary management, sales, and 
finance personnel;  regular audits, by internal audit, specifically focused on corruption risks; 
quarterly self-assessment questionnaires required of each subsidiary regarding business with 
government-affiliated customers; quarterly management certifications from every subsidiary that 
cover among other things controls over financial reporting; and annual testing of internal controls 
at each subsidiary.  To increase oversight, Goodyear also put in place a new regional management 
structure, and added new compliance, accounting, and audit positions.  Goodyear is also making 
technology improvements, where possible, to electronically link subsidiaries in sub-Saharan 
Africa to its global network.  At the parent company, Goodyear created a new senior position of 
Vice President of Compliance and Ethics, which further elevated the compliance function within 
the company.  Goodyear has also expanded on-line and in-person anti-corruption and ethics 
training at its other subsidiaries, and implemented a new Integrity Hotline Web Portal, which 
enhanced users’ ability to file anonymous online reports to its hotline system.  With that system, 
Goodyear is also implementing a new case management system for legal, compliance and internal 
audit to document and track complaints, investigations and remediation.  Goodyear also has 
updated its policies governing third-party agents and vendors, and is in the process of 
implementing a new third-party due diligence software tool.   
 
 
 
 
 
 

 6 
IV. 
 
In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in the Respondent Goodyear’s Offer. 
 
Accordingly, it is hereby ORDERED that: 
 
A. Pursuant to Section 21C of the Exchange Act, Respondent Goodyear cease and  
  desist from committing or causing any violations and any future violations of  
  Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. 
 
B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of   
  $14,122,525 and prejudgment interest of $2,105,540 to the United States Treasury.   
  If timely payment is not made, additional interest shall accrue pursuant to SEC Rule  
  of Practice 600.  Payments must be made in one of the following ways: 
 
1) Respondent may transmit payment electronically to the Commission, which 
 shall provide detailed ACH transfer/Fedwire instructions upon request; 
 
2) Respondent may make direct payment from a bank account via Pay.gov 
 through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 
 
3) Respondent may pay by certified check, bank cashier’s check, or United 
 States postal money order, payable to the Securities and Exchange 
 Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Goodyear as the Respondent in these proceedings, and the file number of these proceedings; a copy 
of the cover letter and check or money order must be sent to Brian O. Quinn, Assistant Director, 
Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E., Washington, 
DC 20549. 
 
C. Respondent shall report to the Commission staff periodically, at no less than twelve-  
  month intervals during a three-year term, the status of its remediation and   
  implementation of compliance measures.  Should respondent discover credible  
  evidence, not already reported to the Commission staff, that questionable or corrupt  
  payments or questionable or corrupt transfers of property or interests may have been  
  offered, promised, paid, or authorized by Respondent entity or person, or any entity  
  or person while working directly for Respondent, or that related false books and  
  records have been maintained, Respondent shall promptly report such conduct to the 

 7 
  Commission staff.   During this three-year period, Respondent shall: (1) conduct an  
  initial review and submit an initial report, and (2) conduct and prepare at least two  
  (2) follow-up reviews and reports, as described below: 
 
1) Respondent shall submit to the Commission staff a written report within one 
(1) year of the entry of this Order setting forth a complete description of its 
FCPA and anti-corruption related remediation efforts to date, its proposals 
reasonably designed to improve the policies and procedures of Respondent 
for ensuring compliance with the FCPA and other applicable anti-corruption 
laws, and the parameters of the subsequent reviews (the “Initial Report”).  
The Initial Report shall be transmitted to Brian O. Quinn, Assistant Director, 
Division of Enforcement, Securities and Exchange Commission, 100 F 
Street, N.E., Washington, DC 20549.  Respondent may extend the time 
period for issuance of the Initial Report with prior written approval of the 
Commission staff. 
 
2) Respondent shall undertake at least two (2) follow-up reviews, incorporating 
any comments provided by the Commission staff on the previous report, to 
further monitor and assess whether the policies and procedures of 
Respondent are reasonably designed to detect and prevent violations of the 
FCPA and other applicable anti-corruption laws (the “Follow-up Reports”). 
 
3) The first Follow-up Report shall be completed by no later than one (1) year 
after  the Initial Report.  The second Follow-up Report shall be completed by 
no later than one (1) year after the completion of the first Follow-up Report.  
Respondent may extend the time period for issuance of the Follow-up 
Reports with prior written approval of the Commission staff. 
 
4) The periodic reviews and reports submitted by Respondent will likely 
include proprietary, financial, confidential, and competitive business 
information.  Public disclosure of the reports could discourage cooperation, 
impede pending or potential government investigations or undermine the 
objectives of the reporting requirement.  For these reasons, among others, the 
reports and the contents thereof are intended to remain and shall remain non-
public, except (1) pursuant to court order, (2) as agreed by the parties in 
writing, (3) to the extent that the Commission staff determines in its sole 
discretion that disclosure would be in furtherance of the Commission’s 
discharge of its duties and responsibilities, or (4) is otherwise required by 
law. 
 
D.  Respondent acknowledges that the Commission is not imposing a civil penalty 
 based upon its cooperation in a Commission investigation and related 
 enforcement action.  If at any time following the entry of the Order, the Division 
 of Enforcement (“Division”) obtains information indicating that Respondent 
 knowingly provided materially false or misleading information or materials to the 
 Commission or in a related proceeding, the Division may, at its sole discretion 

 8 
 and with prior notice to the Respondent, petition the Commission to reopen this 
 matter and seek an order directing that the Respondent pay a civil money penalty.  
 Respondent may contest by way of defense in any resulting administrative 
 proceeding whether it knowingly provided materially false or misleading 
 information, but may not: (1) contest the findings in the Order; or (2) assert any 
 defense to liability or remedy, including, but not limited to any statute of 
 limitations defense. 
 
 By the Commission 
 
 
       Brent J. Fields 
       Secretary 

UNITED STATES OF AMERICA 

Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 74356 / February 24, 2015 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 3640 / February 24, 2015 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-16400 

 

 

In the Matter of 

 

THE GOODYEAR TIRE & 

RUBBER COMPANY,  

 

Respondent. 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS, PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

 

   

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”) against The Goodyear Tire & Rubber Company 

(“Goodyear” or “Respondent”).   

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-

and-Desist Proceedings Pursuant to Section 21C of the Exchange Act, Making Findings, and 

Imposing a Cease-and-Desist Order (“Order”), as set forth below.    

 

  



 2 

III. 
  

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that:  

 

Summary 
 

1. This case involves violations of the books, records, and internal control provisions of 

the Foreign Corrupt Practices Act (“FCPA”) by Goodyear.  Goodyear, headquartered in Akron, 

Ohio, is one of the world’s largest tire companies.  From 2007 through 2011, Goodyear 

subsidiaries in Kenya (Treadsetters Tyres Ltd., or “Treadsetters”) and Angola (Trentyre Angola 

Lda., or “Trentyre”) routinely paid bribes to employees of government-owned entities and 

private companies to obtain tire sales.  These same subsidiaries also paid bribes to police, tax, 

and other local authorities.  In all, between 2007 and 2011, Goodyear subsidiaries in Kenya and 

Angola made over $3.2 million in illicit payments.     

 

2. All of these bribery payments were falsely recorded as legitimate business expenses 

in the books and records of these subsidiaries which were consolidated into Goodyear’s books and 

records.  Goodyear did not prevent or detect these improper payments because it failed to 

implement adequate FCPA compliance controls at its subsidiaries in sub-Saharan Africa.   

 

Respondent 

 

 3. Goodyear, an Ohio corporation headquartered in Akron, Ohio, is one of the 

world’s largest tire manufacturers.  Goodyear has manufacturing facilities in 22 countries and sells 

tires in most countries around the world.  Goodyear’s common stock is registered with the 

Commission pursuant to Section 12(b) of the Exchange Act and is listed on The NASDAQ Stock 

Market. 

 

Other Relevant Entities 

 

 4. Magister Ltd. (“Magister”) is a wholly-owned subsidiary of Goodyear 

incorporated in Mauritius, and headquartered in South Africa.  Magister holds the shares and 

oversees the operations of the Goodyear subsidiaries in sub-Saharan Africa.  During the relevant 

time period this included Treadsetters in Kenya and Trentyre in Angola. 

 

 5. Treadsetters is a retail tire distributor incorporated and located in Kenya.  During 

the relevant time period, Treadsetters was an indirect subsidiary of Goodyear, and had annual 

revenues of approximately $20 million.  Goodyear divested its ownership interest in Treadsetters 

in 2013. 

 

 6. Trentyre is a retail tire distributor incorporated and located in Angola.  Trentyre 

is a wholly owned subsidiary of Goodyear.  During the relevant time period, Trentyre had 

annual revenues between $6 million and $20 million.   

                                                 
1 The findings herein are made pursuant to Respondent's Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding.  



 3 

Improper Payments in Kenya 

 

7. Treadsetters is a retail tire distributor in Kenya.  In 2002, Goodyear acquired a 

minority ownership interest in Treadsetters.  By 2006, Goodyear had acquired a majority ownership 

interest in the company, though the day-to-day operations of Treadsetters continued to be run by 

Treadsetters’ founders and the local general manager.  During the relevant time period, Treadsetters 

had annual revenues of approximately $20 million. 

 

8. From 2007 through 2011, Treadsetters’ management regularly authorized and paid 

bribes to employees of government-owned or affiliated entities, and private companies, to obtain 

business.  The practice was routine and appears to have been in place prior to Goodyear’s 

acquisition of Treadsetters.  The bribes generally were paid in cash and falsely recorded on 

Treadsetters’ books as expenses for promotional products. 

 

 9.  Treadsetters’ general manager and finance director were at the center of the 

scheme.  They approved payments for phony promotional products, and then directed the finance 

assistant to write-out the checks to cash.  Treadsetters’ staff then cashed the checks and used the 

money to make improper payments to employees of customers, which included both government-

owned entities and private companies. 

 

 10. Between 2007 and 2011, Treadsetters paid over $1.5 million in bribes in connection 

with the sale of tires.  This included improper payments to employees of government-owned or 

affiliated entities including the Kenya Ports Authority, the Armed Forces Canteen Organization, 

the Nzoia Sugar Company, the Kenyan Air Force, the Ministry of Roads, the Ministry of State for 

Defense, the East African Portland Cement Co., and Telkom Kenya Ltd.  During that same time 

period, Treadsetters also made approximately $14,457 in improper payments to local government 

officials in Kenya, including city council employees, police, and building inspectors. 

 

 11.  Goodyear did not detect or prevent these improper payments because it failed to 

conduct adequate due diligence when it acquired Treadsetters, and failed to implement adequate 

FCPA compliance training and controls after the acquisition.   

 

Improper Payments in Angola 

 

 12. Trentyre was incorporated in 2007, and is a wholly-owned subsidiary of Goodyear.  

Trentyre is primarily engaged in selling new tires for mining equipment.  During the relevant time 

period, Trentyre had annual revenues between $6 million and $20 million.  

 

 13. From 2007 through 2011, Trentyre paid over $1.6 million in bribes to employees of 

government-owned or affiliated entities, and private companies, to obtain tire sales.  Trentyre paid 

approximately $1.4 million of these bribes to employees of government-owned or affiliated 

entities in Angola, including the Catoca Diamond Mine, UNICARGAS, Engevia Construction 

and Public Works, the Electric Company of Luanda, National Service of Alfadega, and Sonangol.  

A majority of these  improper payments were paid to employees of Trentyre’s largest customer at 

the time, the Catoca Diamond Mine, which is owned by a consortium of mining interests, 

including Endiama E.P., Angola’s national mining company, and ALROSA, a Russian mining 



 4 

company.  During the same time period, Trentyre also made approximately $64,713 in improper 

payments to local government officials in Angola, including police and tax authorities. 

 

 14. The bribery scheme was put in place by Trentyre’s former general manager.  To 

hide the scheme and generate funds for the improper payments, Trentyre falsely marked-up the 

costs of its tires by adding to its invoice price phony freight and customs clearing costs.  On a 

monthly basis, as tires were sold, the phony freight and clearing costs were reclassified to a 

balance sheet account.  Trentyre made improper payments to employees of customers both in cash 

and through wire transfers.  As bribes were paid, the amounts were debited from the balance sheet 

account, and falsely recorded as payments to vendors for freight and clearing costs. 

 

 15. Goodyear did not prevent or detect these improper payments because it failed to 

implement adequate FCPA compliance training and controls at this subsidiary.   

 

Legal Standards and Violations 

 

 16. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-

and-desist order upon any person who is violating, has violated, or is about to violate any provision 

of the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, or 

would be a cause of the violation, due to an act or omission the person knew or should have known 

would contribute to such violation. 

 

 17. Under Section 13(b)(2)(A) of the Exchange Act issuers are required to make and 

keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the 

transactions and disposition of the assets of the issuer. [15 U.S.C. §78m(b)(2)(A)]. 

 

 18. Under Section 13(b)(2)(B) of the Exchange Act issuers are required to devise and 

maintain a system of internal accounting controls sufficient to provide reasonable assurances that 

(i) transactions are executed in accordance with management’s general or specific authorization; 

(ii) transactions are recorded as necessary (I) to permit preparation of financial statements in 

conformity with generally accepted accounting principles or any other criteria applicable to such 

statements, and (II) to maintain accountability for assets; (iii) access to assets is permitted only in 

accordance with management’s general or specific authorization; and (iv) the recorded 

accountability for assets is compared with the existing assets at reasonable intervals and 

appropriate action is taken with respect to any differences. [15 U.S.C. §78m(b)(2)(B)]. 

 

 19. As described above, Goodyear subsidiaries in Kenya and Angola made improper 

payments to employees of government-owned entities and private companies to obtain business.  

These improper payments were falsely recorded as legitimate business expenses in the books and 

records of these subsidiaries which were consolidated into Goodyear’s books and records.  

Accordingly, Goodyear violated Section 13(b)(2)(A) of the Exchange Act.  As described above, 

Goodyear also violated Section 13(b)(2)(B) of the Exchange Act by failing to devise and maintain 

sufficient accounting controls to prevent and detect these improper payments.  

 

 

 



 5 

Goodyear’s Cooperation and Remedial Efforts 

 

 20. In determining to accept the Offer, the Commission considered remedial acts 

promptly undertaken by Respondent and cooperation afforded the Commission staff.  After 

receiving information about the bribes, Goodyear promptly halted the improper payments and 

reported the matter to Commission staff.  Goodyear also provided significant cooperation with the 

Commission’s investigation.  This included voluntarily producing documents and reports and other 

information from the company’s internal investigation, and promptly responding to Commission 

staff’s requests for information and documents.  These efforts assisted the Commission in efficiently 

collecting evidence including information that may not have been otherwise available to the staff.   

 

 21. Goodyear also has undertaken remedial efforts.  In Kenya, Goodyear divested its 

ownership interest in Treadsetters, and ceased all business dealings with the company.   In Angola, 

after Goodyear halted the improper payments its subsidiary lost its largest customer.  Goodyear is 

now in the process of divesting this subsidiary.   

 

 22. Goodyear also undertook disciplinary action against certain employees, including 

executives of its Europe, Middle East and Africa region who had oversight responsibility, for 

failing to ensure adequate FCPA compliance training and controls were in place at the company’s 

subsidiaries in sub-Saharan Africa.   

 

 23. Goodyear also implemented improvements to its compliance program, both specific 

to its operations in sub-Saharan Africa, and globally.  In Africa, the improvements include 

expanded on-line and in-person anti-corruption training for subsidiary management, sales, and 

finance personnel;  regular audits, by internal audit, specifically focused on corruption risks; 

quarterly self-assessment questionnaires required of each subsidiary regarding business with 

government-affiliated customers; quarterly management certifications from every subsidiary that 

cover among other things controls over financial reporting; and annual testing of internal controls 

at each subsidiary.  To increase oversight, Goodyear also put in place a new regional management 

structure, and added new compliance, accounting, and audit positions.  Goodyear is also making 

technology improvements, where possible, to electronically link subsidiaries in sub-Saharan 

Africa to its global network.  At the parent company, Goodyear created a new senior position of 

Vice President of Compliance and Ethics, which further elevated the compliance function within 

the company.  Goodyear has also expanded on-line and in-person anti-corruption and ethics 

training at its other subsidiaries, and implemented a new Integrity Hotline Web Portal, which 

enhanced users’ ability to file anonymous online reports to its hotline system.  With that system, 

Goodyear is also implementing a new case management system for legal, compliance and internal 

audit to document and track complaints, investigations and remediation.  Goodyear also has 

updated its policies governing third-party agents and vendors, and is in the process of 

implementing a new third-party due diligence software tool.   

 

 

 

 

 

 



 6 

IV. 
 

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in the Respondent Goodyear’s Offer. 

 

Accordingly, it is hereby ORDERED that: 

 

A. Pursuant to Section 21C of the Exchange Act, Respondent Goodyear cease and  

  desist from committing or causing any violations and any future violations of  

  Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. 

 

B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of   

  $14,122,525 and prejudgment interest of $2,105,540 to the United States Treasury.   

  If timely payment is not made, additional interest shall accrue pursuant to SEC Rule  

  of Practice 600.  Payments must be made in one of the following ways: 

 

1) Respondent may transmit payment electronically to the Commission, which 

 shall provide detailed ACH transfer/Fedwire instructions upon request; 

 

2) Respondent may make direct payment from a bank account via Pay.gov 

 through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

 

3) Respondent may pay by certified check, bank cashier’s check, or United 

 States postal money order, payable to the Securities and Exchange 

 Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Goodyear as the Respondent in these proceedings, and the file number of these proceedings; a copy 

of the cover letter and check or money order must be sent to Brian O. Quinn, Assistant Director, 

Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E., Washington, 

DC 20549. 

 

C. Respondent shall report to the Commission staff periodically, at no less than twelve-  

  month intervals during a three-year term, the status of its remediation and   

  implementation of compliance measures.  Should respondent discover credible  

  evidence, not already reported to the Commission staff, that questionable or corrupt  

  payments or questionable or corrupt transfers of property or interests may have been  

  offered, promised, paid, or authorized by Respondent entity or person, or any entity  

  or person while working directly for Respondent, or that related false books and  

  records have been maintained, Respondent shall promptly report such conduct to the 



 7 

  Commission staff.   During this three-year period, Respondent shall: (1) conduct an  

  initial review and submit an initial report, and (2) conduct and prepare at least two  

  (2) follow-up reviews and reports, as described below: 

 

1) Respondent shall submit to the Commission staff a written report within one 

(1) year of the entry of this Order setting forth a complete description of its 

FCPA and anti-corruption related remediation efforts to date, its proposals 

reasonably designed to improve the policies and procedures of Respondent 

for ensuring compliance with the FCPA and other applicable anti-corruption 

laws, and the parameters of the subsequent reviews (the “Initial Report”).  

The Initial Report shall be transmitted to Brian O. Quinn, Assistant Director, 

Division of Enforcement, Securities and Exchange Commission, 100 F 

Street, N.E., Washington, DC 20549.  Respondent may extend the time 

period for issuance of the Initial Report with prior written approval of the 

Commission staff. 

 

2) Respondent shall undertake at least two (2) follow-up reviews, incorporating 

any comments provided by the Commission staff on the previous report, to 

further monitor and assess whether the policies and procedures of 

Respondent are reasonably designed to detect and prevent violations of the 

FCPA and other applicable anti-corruption laws (the “Follow-up Reports”). 

 

3) The first Follow-up Report shall be completed by no later than one (1) year 

after  the Initial Report.  The second Follow-up Report shall be completed by 

no later than one (1) year after the completion of the first Follow-up Report.  

Respondent may extend the time period for issuance of the Follow-up 

Reports with prior written approval of the Commission staff. 

 

4) The periodic reviews and reports submitted by Respondent will likely 

include proprietary, financial, confidential, and competitive business 

information.  Public disclosure of the reports could discourage cooperation, 

impede pending or potential government investigations or undermine the 

objectives of the reporting requirement.  For these reasons, among others, the 

reports and the contents thereof are intended to remain and shall remain non-

public, except (1) pursuant to court order, (2) as agreed by the parties in 

writing, (3) to the extent that the Commission staff determines in its sole 

discretion that disclosure would be in furtherance of the Commission’s 

discharge of its duties and responsibilities, or (4) is otherwise required by 

law. 

 

D.  Respondent acknowledges that the Commission is not imposing a civil penalty 

 based upon its cooperation in a Commission investigation and related 

 enforcement action.  If at any time following the entry of the Order, the Division 

 of Enforcement (“Division”) obtains information indicating that Respondent 

 knowingly provided materially false or misleading information or materials to the 

 Commission or in a related proceeding, the Division may, at its sole discretion 



 8 

 and with prior notice to the Respondent, petition the Commission to reopen this 

 matter and seek an order directing that the Respondent pay a civil money penalty.  

 Respondent may contest by way of defense in any resulting administrative 

 proceeding whether it knowingly provided materially false or misleading 

 information, but may not: (1) contest the findings in the Order; or (2) assert any 

 defense to liability or remedy, including, but not limited to any statute of 

 limitations defense. 

 

 By the Commission 

 

 

       Brent J. Fields 

       Secretary