Business

Does General Electric hide the largest fraud in history?

Google+ Pinterest LinkedIn Tumblr

“It’s too huge to fall.” The mantra was continual to repletion with Enron, an American energy company that in 2001 had to lower its blind, leaving 21,000 employees in the street, after discovering the fraud that hid their accounts: makeup their titanic losses with the activity of their own subsidiaries, with the endorsement of the then almighty Arthur Andersen, one of the 5 largest auditors within the world, that doesn’t exist these days.

General Electric is not Enron. It is actually much bigger. With over four hundred thousand staff worldwide and over four thousand in Spain -, a most diversified business, ranging from electrical infrastructure to the media, and that this week is on everyone’s lips because of a controversial report.

Their actions bounced yesterday on Wall Street, however did not overcome the twelve-tone system crash they suffered on weekday, after analyst Harry Markopolos made public a devastating report of 175 pages, accusing the corporate of concealing behind false accounts a fraud even “greater than Enron”, which might are continual since 1995 and would quantity to thirty-eight hundred million dollars.

“My team has spent seven months analyzing General Electric’s accounting and that we believe that the $ thirty-eight billion fraud we’ve encountered is simply the tip of the iceberg,” Markopolos said after making his report public.

As before long because it saw the sunshine, the titles of General electrical went into free fall, until closing with a decline of 11.3%. But what quantity power will one analyst’s report have?
In this case, it’s been the name of the signer that has dragged the investors. Markopolos was the one WHO in 1999 gave the alarm to the SEC, the Securities and Exchange Commission (the North American nation CNMV), on the practices of these days and renowned capitalist Bernard Madoff.

At first, they didn’t pay much attention. Moreover, it’s been virtually ten years since his grievance concerning Madoff’s fallacious Ponzi theme was seriously investigated, ending him in jail, sentenced to 150 years, and emerging a pyramid scam of about 52,000 million.

Against this background, the devastating report printed by Markopolos on a weekday had AN virtually immediate impact on the NY exchange and General Electric’s titles quickly deflated. The company directly stepped out, accusing the analyst of deliberately seeking a fall in the value of its shares for its own interests.

“Mr. Markopolos brazenly acknowledges that he’s paid for unidentified hedge funds. These funds area unit financially actuated to undertake to come up with short sales in company shares to form supererogatory volatility, ”General electrical aforementioned in an exceeding statement.

General Electrical operates with the best levels of integrity and supports its monetary reports, ” he said.

Markopolos didn’t amendment his position yesterday when the reaction of the corporate. Although the shareholders seemed to do it. The chief executive officer of General electrical (GE), Larry Culp, threw the remainder and invested with, in step with Europa Press, virtually $ a pair of million to shop for 252,200 shares of the transnational. Their titles traced above 8%.

Write A Comment