Leading media in United States of America have made claims that General Electric (GE) of using accounting tricks to mask the extent of its financial problems and called it a bigger fraud than Enron. Harry Markopolos, who is famous for blowing the whistle on Bernie Madoff’s Ponzi scheme in 2008, said in a report released on Thursday (local time) that GE was hiding nearly 40 billion dollars of losses in its insurance business. He said this is the largest case of accounting fraud he and his team have investigated.
“In fact, GE’s 38 billion dollars in accounting fraud amounts to over 40% of GE’s market capitalisation, making it far more serious than either the Enron or WorldCom accounting frauds,” Markopolos wrote in the report, referring to the scandals that eventually helped bankrupt energy giant Enron in 2001 and long-distance telco WorldCom in 2002. GE shares fell 11%, to 8.01 dollars on Thursday. The stock traded near 12 dollars a year ago and 30 dollars at the start of 2017.
Markopolos made several comparisons to Enron in his report and also on a new website with the URL www.gefraud.com. He accused GE of using what he dubbed the GEnron’ playbook.