If you thought the Madoff swindle was big, check out GE accounting fraud!
Former Madoff Whistleblower Attacks GE Over $40 Billion Accounting Shortfall
With markets looking to open in the red following Wednesday’s stunning drop, the infamous Madoff Whistleblower (who was ignored for years) Harry Markopolos has picked Thursday to publish a report about GE’s accounting strategies, claiming that the company’s ‘cash situation’ is a lot worse than the company’s filings would suggest.
GE, for its part, has said Markopolos’s allegations are ‘Entirely False and Misleading’, of course, that didn’t stop shares from plunging 7% in pre-market trading.
Markopolos told WSJ ahead of the report’s release, his group found GE’s insurance unit will need to bolster its reserves by $18.5 billion in cash and faulted the way the company is accounting for its oil-and-gas business. All told, he said, the accounting problems amount to $38 billion, or 40% of the conglomerate’s market value.
He added that this fraud was bigger than Enron and Worldcom.
GE shares were off 7% in premarket trade thanks to Markopolos’s report, even though he’s not saying anything that JPM’s Tusa hasn’t said already.
Readers can download the report here:
And read it here: