General Electric shares fell as much as 15% on Thursday after fraud investigator...
) shares fell as much as 15% on Thursday after fraud investigator Harry Markopolos, who blew the whistle on Bernard Madoff’s Ponzi scheme, said GE was concealing deep financial problems.
“GE’s true debt to equity ratio is 17:1, not 3:1, which will undermine its credit status,” Markopolos said. The report adds that “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.” GE said Markopolos was known to work for unnamed hedge funds that typically benefit from short selling a company’s stock.
The report details GE’s exposure to long-term care insurance, the subject of a federal class-action lawsuit awaiting a decision on GE’s motion to dismiss.
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