GE stock tumbles as Madoff whistleblower slams its accounting
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General Electric Co. shares had their biggest drop in more than a decade Thursday after a prominent financial analyst working with a short seller accused the company of an “accounting fraud.” GE Chief Executive H. Lawrence Culp Jr. called the allegation “market manipulation — pure and simple.”

Harry Markopolos, who had raised concerns over investment manager Bernie Madoff before Madoff’s fraud was exposed, said GE will need to increase its insurance reserves immediately by $18.5 billion in cash — plus an additional noncash charge of $10.5 billion when new accounting rules take effect. GE is also hiding a loss of more than $9 billion on its holdings in Baker Hughes, an oil field services company, Markopolos said.

“These impending losses will destroy GE’s balance sheet, debt ratios and likely also violate debt covenants,” Markopolos said in a report Thursday. “GE’s cash situation is far worse than disclosed in their 2018” annual report to regulators.

 

GE stock tumbles as Madoff whistleblower slams its accounting

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