- General Electric (GE -7.7%) plunges to its lowest levels since January after a prominent whistle-blower accused the company of masking financial problems, claims the company calls "meritless."
- Harry Markopolos, who once raised concerns over Bernie Madoff before his Ponzi scheme was exposed, said GE's insurance unit will need to increase its reserves immediately by $18.5B in cash with an additional non-cash charge of $10.5B when new accounting rules take effect in 2021, and alleged GE is not properly accounting for its interest in Baker Hughes (BHGE -3.8%).
- In response, GE says it "operates at the highest level of integrity and stands behind its financial reporting... We remain focused on running our businesses every day, following the strategic path we have laid out."
- Also: "Contrary to Mr. Markopolos' allegations, GE continues to maintain a strong liquidity position, committed credit lines, and several executable options to monetize assets."
- GE notes Markopolos is being "compensated by unnamed hedge funds [which] are financially motivated to attempt to generate short selling in a company's stock."