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Thu Aug 15, 2019, 11:12 AM

GE Shares Drop After Madoff Whistleblower Harry Markopolos Calls It a Bigger Fraud than Enron

General Electric shares fell more than 11% Thursday after Madoff whistleblower Harry Markopolos targeted the conglomerate in a new report, accusing it of issuing fraudulent financial statements to hide the extent of its problems.

A website has been set up to disseminate the report, www.GEfraud.com, where Markopolos calls it “a bigger fraud than Enron.” The financial investigator, who was probing GE for an unidentified hedge fund, writes that after more than a year of research he has discovered “an Enronesque business approach that has left GE on the verge of insolvency.”

“My team has spent the past 7 months analyzing GE’s accounting and we believe the $38 Billion in fraud we’ve come across is merely the tip of the iceberg,” Markopolos said in the 175-page report. Markopolos alleges that GE has a “long history” of accounting fraud, dating back to as early as 1995, when it was run by Jack Welch.

Markopolos’s case centers around GE’s long-term care insurance unit, which the company had to boost reserves for by $15 billion last year. By examining the filings of GE’s counterparties in this business, he alleges that GE is hiding massive losses that will only increase as policy-holders grow older. He claims that GE has filed false statements to regulators on the unit, or eight other insurance regulators have done so. Separately, he goes on to find issues with GE’s accounting on its oil and gas unit Baker Hughes.

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https://www.cnbc.com/2019/08/15/ge-shares-drop-after-madoff-whistleblower-harry-markopolos-raises-red-flags-on-its-accounting.html

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Reply GE Shares Drop After Madoff Whistleblower Harry Markopolos Calls It a Bigger Fraud than Enron (Original post)
RCW2014 Aug 15 OP
Gunslinger201 Aug 15 #1
uncledad Aug 16 #2

Response to RCW2014 (Original post)

Thu Aug 15, 2019, 11:56 AM

1. Um, Enron wasnt a fraud

Enron was Andrew Weissmann being a Douchebag

Like he was against Trump

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Response to Gunslinger201 (Reply #1)

Fri Aug 16, 2019, 09:44 AM

2. Really?



Several of Enron's executives were charged with conspiracy, insider trading, and securities fraud. Enron's founder and former CEO Kenneth Lay were convicted on six counts of fraud and conspiracy and four counts of bank fraud. Prior to sentencing, he died of a heart attack in Colorado.

Enron's former star CFO Andrew Fastow pled guilty to two counts of wire fraud and securities fraud for facilitating Enron's corrupt business practices. He ultimately cut a deal for cooperating with federal authorities and served more than five years in prison. He was released from prison in 2011.

Ultimately, former Enron CEO Jeffrey Skilling received the harshest sentence of anyone involved in the Enron scandal. In 2006, Skilling was convicted of conspiracy, fraud, and insider trading. Skilling originally received a 24-year sentence, but in 2013 it was reduced by 10 years. As a part of the new deal, Skilling was required to give $42 million to the victims of the Enron fraud and to cease challenging his conviction. Skilling remains in prison and is scheduled for release on February 21, 2028.

https://www.investopedia.com/updates/enron-scandal-summary/

Enron's collapse and the financial havoc it wreaked on its shareholders and employees led to new regulations and legislation to promote the accuracy of financial reporting for publicly held companies. In July 2002, President George W. Bush signed into law the Sarbanes-Oxley Act. The Act heightened the consequences for destroying, altering, or fabricating financial statements, and for trying to defraud shareholders.

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