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GE Accused Of $38bn Fraud By The Investigator Who Warned About Madoff

Harry Markopolos, a private financial investigator who had earlier flagged the Ponzi scheme of Bernard Madoff has now given a report claiming that General Electric is concealing $38.1 billion losses. Harry had warned in advance about Madoff’s $65 billion scheme and he now raised a flag against accounting deficiencies of America’s big 4 firms. In his recent 175 page report Markopolos has alleged that the firm’s cash situation is worse than its recent disclosure. But GE CEO Lawrence Culp accused Harry of making “false statements” and called the report misguided as the man did not check his fact before publishing.

In his financial analysis of GE, Markopolos has claimed that $38 billion of the firm’s accounting fraud is worth 40 % of its market capitalization and it is likely to be worse than Enron or Worldcom’s accounting frauds. The report has focused on GE’s exposure to care insurance sector in the US and also its oil industry services sector. The reference of Markopolos to America’s most damaging financial frauds is being viewed very seriously as both of them led to long criminal proceedings.

The report led to fall in GE’s share price by 15 % representing GE’s worst single day fall in 11 years that prompted CEO Cupl to buy $2 million worth of the firm’s shares to showcase his faith in the company. Harry Markopolos has disclosed that a copy of the report has been given to a hedge-fund which will give him percentage of profits that they make from price movement of the stock. While some have dismissed the report as “silly”, Reuters stated that analysts have long been concerned about cash flow situation of GE and its opaque financial reports and the firm itself had declared that its financials are being investigated by SEC and Department of Justice.

Maria Petersen
Author Details
EDITOR AND WRITER At Industry News Coverage

Maria Petersen, one who a true enthusiast of the space, universe, and the outer world, has pursued a degree in Astrophysics. And this has made her an apt choice to write about the world of Science. Beginning a career in writing as a freelancer and then, gradually with hard work and passion, earned the position of Editor And Writer in our organization. Also loves to be called Content Crafter, Maria is given the responsibility to write blogs and news articles related to the Science field, entailing new findings & discoveries, inventions & innovations, new satellite & spacecraft liftoffs, galaxies & outer space, and much more.

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