General Electric shares fell more than 13% 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 to as early as 1995, when it was run by Jack Welch.
“It’s going to make this company probably file for bankruptcy,” Markopolos told CNBC’s “Squawk on the Street. ” “WorldCom and Enron lasted about four months. ... We’ll see how GE does.”
