NEW YORK – Financial fraud investigator Harry Markopolos accused General Electric (GE) on August 15 of engaging in accounting fraud worth $38 billion. He said GE is heading for bankruptcy and is hiding $29 billion in long-term care losses.
Perhaps best known for his investigation of Bernie Madoff’s massive Ponzi scheme, Greek-American Markopolos will not reveal the name of the hedge fund which hired him to conduct the probe of GE, CNBC reported, adding that a website was launched to make the 175-page report public: https://www.gefraud.com.
Markopolos calls GE “a bigger fraud than Enron,” according to the website, noting that “GE utilizes many of the same accounting tricks as Enron did, so much so that we’ve taken to calling this the GEnron case.”
Markopolos’ report continues, “GE would change its reporting formats every 2-4 years to prevent analysts from being able to make comparisons across time horizons! In other words, GE went out of its way to make it impossible to analyze the performance of their business units.
“Why would a company do that? We could only think of two reasons: 1) to conceal accounting fraud or 2) because they’re so incompetent they’re not capable of keeping proper books and records. I’m not sure which reason is worse because both are bad and each is a path to bankruptcy.”
The news of the report sent GE stock tumbling more than 10% according to CNBC.
(Material from the Associated Press was used in this report.)