Submitted via IRC for SoyCow2718
GE stock has worst day in 11 years after Madoff whistleblower calls it a bigger fraud than Enron
General Electric shares plunged more than 11% Thursday after Harry Markopolos, who is famous for blowing the whistle on Bernie Madoff's Ponzi scheme in 2008, accused GE of orchestrating a massive fraud.
GE CEO Larry Culp on Thursday bought 252,200 shares at $7.93 per share, a purchase worth almost $2 million, according to an SEC filing. The buy helped bump GE's share price around 2% in after-hours trading. Culp's ownership of GE stock nearly doubled this week after an earlier purchase Tuesday. GE Board Director Leslie Seidman called the fraud allegations "baseless" and "inflammatory" in an interview on CNBC's "Closing Bell" Thursday evening. She said Markopolos' claims do not "reflect the GE I know." Seidman chairs of the board's audit committee.
Markopolos said in a report released Thursday that GE was hiding nearly $40 billion of losses in its insurance business. He said this is the largest case of accounting fraud he and his team have investigated. "In fact, GE's $38 billion 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 in the report, referring to the scandals that eventually helped bankrupt energy giant Enron in 2001 and long-distance telco WorldCom in 2002. GE strongly denied Markopolos' allegations.
(Score: 1) by khallow on Saturday August 17 2019, @04:13AM
Only if they break the rules. Merely profiting handsomely from the release of well presented public information doesn't count.