AKRON (March 29, 2006) — Staff from the Securities and Exchange Commission (SEC) have notified Goodyear that the agency has terminated its investigation into the tire maker's 2003 restatement of earnings and will not recommend enforcement action.
The announcement comes exactly a week after Goodyear said the U.S. District Court dismissed the class-action lawsuit alleging securities fraud against the company, relating also to the restatement.
SEC staff also told Goodyear that the commission terminated its investigation into Goodyear's former chief financial officer Robert Tieken and former chief accounting officer Stephanie Bergeron. The staff said they would not recommend enforcement action against the former executives.
Last August, Goodyear received a “Wells Notice,” which indicated that the SEC staff intended to recommend civil or administrative enforcement against the company. However, the Wells Notice did not necessarily mean enforcement would happen. Companies that receive the notices still can respond to the investigation before a final recommendation is made.
The SEC launched its investigation in November 2003 after Goodyear disclosed the month before that it would restate its results back to 1998. The SEC upgraded it to a formal investigation in February 2004. By that May, Goodyear had reduced its past earnings by $280.8 million. A final restatement in late 2004 of $19.8 million led to a final tally of $300.6 million restated.
Goodyear's stock price spiked sharply following the SEC's announcement, rising 35 cents to $14.33 midday.