Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Enron 2.0: Next chapter in GE's history is chapter 11

In a 175-page report posted online, forensic accountant Harry Markopolos and his fraud team allege that GE is committing $38 billion in accounting fraud. The man himself, Harry Markopolos, joined The Final Round to discuss. Markopolos -whose research on GE is allegedly being used by a hedge fund that reportedly shorts the industrial giant’s stock- dubs the company “GEnron.” GE Stock Plunges on that Suspicious $38 Billion Fraud 'Bombshell'

Markopolos is dusting off the legendary whistle he blew on Ponzi schemer Bernie Madoff years ago and is now tooting it out front of GE’s Boston-based headquarters... and the world at large. In a scathing new 170-plus page research report, the financial fraud expert and certified financial analyst (CFA) alleges GE is committing accounting fraud.

“I believe I have a few smoking guns on GE,” Markopolos told Yahoo Finance’s The Final Round, adding that information was held back from the report for law enforcement. He added that it took seven and half months to complete the report and it was “self-funded.”

Markopolos said the next chapter for GE is Chapter 11 bankruptcy.

Several allegations from Markopolos’ report includes:

    GE has committed a $38 billion fraud primarily by hiding losses.

    GE will not be cash flow positive by 2021 as executives have suggested.

    GE is not liquid right now.

    A recession could tip GE into Chapter 11 bankruptcy.

Suffice it to say, GE sees it a vastly different way.

GE declined to make any member of its executive team available for an interview by Yahoo Finance. But a GE spokesperson moved quickly to downplay Markopolos’ findings and play up his motivations (reportedly to get paid by the short hedge funds that wanted his research) via an email to Yahoo Finance this morning.

“We have never met, spoken to or had contact with this person. While we can’t comment on the detailed content of a report that we haven’t seen, the allegations we have heard are entirely false and misleading. It’s widely known and the Wall Street Journal has previously reported that he works for and is compensated by unnamed hedge funds. Such funds are usually financially motivated to try to generate short selling in a company’s stock to create unnecessary volatility,” the GE spokesperson said by email.

The person continued, “GE stands behind its financials. We operate to the highest-level of integrity in our financial reporting and we have clearly laid out our financial obligations in great detail. We remain focused on running our business every day and following the strategic path we have laid out. We will not be distracted by this type of meritless, misguided and self-serving speculation and neither should anyone in the investor community.”

“GE continues to maintain a strong liquidity position, committed credit lines, and several executable options to monetize assets,” the spokesperson added.

GE then came out Thursday afternoon with a statement from its chairman and CEO Larry Culp.

“GE will always take any allegation of financial misconduct seriously. But this is market manipulation — pure and simple. Mr. Markopolos’s report contains false statements of fact, and these claims could have been corrected if he had checked them with GE before publishing the report. The fact that he wrote a 170-page paper but never talked to company officials goes to show that he is not interested in accurate financial analysis, but solely in generating downward volatility in GE stock so that he and his undisclosed hedge fund partner can personally profit,” Culp said.

Markopolos told Yahoo Finance that he didn’t reach out to GE because he “didn’t want to engage in a cover up. Who wants to talk to fraudsters,” he added, noting that GE’s financial statements were used to compile the report. “We used their words against them.”

The Wall Street analysts that cover GE — which Markopolos says have been duped by GE’s accounting practices for years — were slow to weigh in on the report. One analyst at Barclays did wade slightly into the muck, saying Markopolos’ research was concerning.

“The bottom line is he estimates GE still has a $18.5 billion shortfall in its LTC [long-term care] reserves. We are not currently in a position to say whether that estimate is reasonable, although it is certainly concerning,” said Barclays analyst Jay Gelb in a research note.

GE shares plunged more than 12% on the news Thursday.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
×