SEC issues Wells Notice to Goodyear

By Shawn Langlois
MarketWatch
August 16, 2005

SAN FRANCISCO (MarketWatch) - Goodyear Tire & Rubber Co. said Tuesday it has received notice that federal regulators expect to recommend civil or administrative action be brought against the company for accounting errors detailed almost two years ago. Following the announcement, shares of the Akron, Ohio-based tire giant (GT: news, chart, profile) fell 60 cents, or 3.4%, to close at $16.91.

The notification, which is known as a Wells Notice, stems from an investigation into the company's restated financial results unveiled in October 2003. At that time, Goodyear disclosed that it overstated earnings for the prior 5 1/2 years by as much as $100 million due to mistakes in its billing and accounting software systems. See full story.

Goodyear, the world's third largest tire maker, added that Wells Notices have also been issued to its former chief financial officer and chief accounting officer. "Goodyear and its former officers are continuing to cooperate with the SEC in connection with this matter," the company said. The news comes less than two weeks after Goodyear's stock got a lift from second-quarter earnings that nearly doubled from the year earlier period.