General Electric

[MrButtons]

Not sure where to toss this. If it should be in an existing thread let me know and I can put it in there.

Either way, this GE fraud story that is materializing is pretty insane.

Harry Markopolos, a whistleblower on the Madoff ponzi scheme, has the potential to make millions from his recent call that General Electric has committed billions of dollars in accounting fraud.

The former financial executive is reportedly working with an undisclosed hedge fund that's betting GE's share price will drop, and Markopolos has an agreement to receive a portion of the trading profits, according to the Wall Street Journal.

- From my brief and extremely limited knowledge on this, this isn't uncommon but if he didn't disclose his short position that is the issue right?

Markopolos' group has also sent its 175-page report to securities regulators in the hope of claiming a cash reward through a government whistleblower program.

GE's stock plunged 11% on Thursday — its biggest decline in 11 years — after Markopolos' accusatory report was made public.

https://markets.businessinsider.com/...9-8-1028452690

[OMG!WTF!]

- From my brief and extremely limited knowledge on this, this isn't uncommon but if he didn't disclose his short position that is the issue right?

If you mean Markopolos, no. I don't think there is an issue with him having a short position by proxy. It's not illegal to have better information than anyone else. It's just a really bold investigation and accusation by a guy who has some credibility.

[Ashasx]

GE back up over 8% today. This is going to be an interesting follow.

[HockeyIlliterate]

GE has probably engaged in some fraudulent accounting practices since Jack Welch was the CEO, if not before then.

[AnonymousStranger]

My understanding is that GE is simply understating the reserve account required to pay off long term expected liabilities by the 20 billion or whatever. So the balance sheet is way out of whack, but claims that they are going bankrupt as a result of this seems very unlikely, although he did state they don't present working capital projections or current ratios for whatever reason, which is worrying, kinda. I have zero idea how much money GE has borrowed from banks, but maybe this is an attempt to hide breach of covenants or something? (although that seems like a really amateurish way to do it, so I'm probably off base) Don't know, just speculating. Mostly likely result of this, I'm guessing, is a restatement of their financials going back 3 years, which will tank their stock, but again, actual declaration of bankruptcy seems unlikely.