Madoff Whistleblower: GE has Committed Accounting Fraud on a Larger Scale than Enron

[Teh_Diplomat 2,054]

https://www.theguardian.com/business/2019/aug/15/general-electric-stock-harry-markopolos-fraud-claims

 

 

 

Quote

The whistleblower who exposed Bernard Madoff’s Ponzi scheme has accused General Electric of wide-scale fraud, sending the US conglomerate’s share price into a tailspin.

 

In a report titled General Electric, a Bigger Fraud Than Enron, investigator Harry Markopolos claims GE is engaging in accounting fraud worth $38bn. He said GE is heading for bankruptcy and is hiding $29bn in long-term care losses.

 

“GE’s $38bn in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds,” Markopolos wrote, referencing two of the largest corporate scandals in history.

 

Quote

This report is “going to make this company probably file for bankruptcy”, Markopolos told CNBC’s Squawk on the Street. “WorldCom and Enron lasted about four months … We’ll see how GE does.”

 

In a statement, GE said it “stands behind its financials” and operates to the “highest level of integrity” in its financial reporting. “We remain focused on running our business every day and will not be distracted by this type of meritless, misguided and self-serving speculation.”

 

GE’s share price sank close to 15% after the report was released.

 

General Electric is already under investigation by the Securities and Exchange Commission (SEC), the US’s top financial watchdog, and the justice department over accounting irregularities related to its insurance and power divisions.

 

Once the world’s most valuable company, GE has struggled in recent years. The former chief executive and chairman John Flannery was abruptly removed last year after only a year on the job and replaced by former Lawrence Culp, once the head of the Danaher conglomerate.

 

 

[SheepKilla 473]

Crazy if true. Enron is still talked about to this day.

[jehurey 3,228]

This reminds me of the the days in the early 2000's of Enron and Worldcom, coinciding with an economic downturn.

 

The thing is, companies who have been doing shady accounting practices to keep themselves afloat can hide it when the economy is booming. But when it starts stalling, and the money-lending slows down, the companies running on shady practices don't have anymore moves and they start falling.

 

Which is only going to exacerbate an incoming recession, or worse.

[Ike★ 2,906]

This on top of an upcoming recession can't be great for the economy. Where is that extra income/jobs that the Trump tax cut was supposed to generate?

[jehurey 3,228]

17 hours ago, Ike said:

This on top of an upcoming recession can't be great for the economy. Where is that extra income/jobs that the Trump tax cut was supposed to generate?

Trump is trying to create diversions like crazy to get people to stop paying attention about ominous economic news.

 

He's also trying to PRE-emptively place the blame with the Fed, even though the Fed did the right thing in raising the rate a few weeks ago. They're gonna need it in order to stave off the downturn as much as possible.

 

If this baby starts falling during the middle of the 2020 campaign season, then he knows he's fucked.