Emerging Markets Law

SEC Fines Goodyear $16 Million Over FCPA Violations

The SEC this week announced a settlement with Goodyear that finds the company $16 million for alleged violations of the Foreign Corrupt Practices Act.

The settlement concerns actions by Goodyear subsidiaries in Kenya and Angola where the subsidiaries are alleged to have made roughly $3.2 million in bribes from 2007 to 2011.

For practitioners this is a cautionary tale.  Goodyear is a well-established company and undoubtedly had some kind of corporate compliance program.  Nevertheless, notwithstanding those efforts,  it appears that elements of the Goodyear sales organization succeeded in a long-term arrangement involving behavior that was clearly prohibited by the FCPA.  The mis-conduct was discovered and the penalty demanded by regulators effectively required disgorgement of all the profits involved in the sales associated with the wrongful behavior.

U.S. companies with sales activities outside the U.S. need to remain vigilant with their compliance efforts.

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