Fraud Bigger Than Enron
Emailed on August 16th, 2019 in The Friday Forward
If GE was one of your blue chips, I am sorry.
This week forensic accountant Harry Markopolos alleged accounting fraud in the company’s legacy long-term care insurance business.
A lot of it.
His 175-page report covered a lot of ground, but there’s one point investors should focus on above all: Markopolos alleges that GE’s legacy long-term care book of business is getting worse and will require more large cash infusions to pay future insurance claims. A new cash drain would be a big problem for the iconic American manufacturer.
“GE’s $38 Billion in accounting fraud amounts to over 40% of GE’s market capitalization,” Markopolos wrote, “making it far more serious than either the Enron or WorldCom accounting frauds.”