Analyst Harry Markopolos has alleged in a report that GE is hiding $38.1 Billion in potential losses. The company’s financial situation is also much worse than it is reporting. “GE’s true debt to equity ratio is 17:1, not 3:1, which will undermine its credit status,” said Markopolos. GE’s liquidity was also “more serious than either the Enron or WorldCom accounting frauds.”
GE has responded to Markopolos’ claims saying ” stands behind its financials” and operates to the “highest-level of integrity” in reporting. GE has also claimed that Markopolos has been known to work for hedge funds who would benefit from short selling of company stocks. The company stated ” We remain focused on running our business every day and … will not be distracted by this type of meritless, misguided and self-serving speculation.”
Markopolos’ report was issued by Forensic Decisions PR LLC, who disclaimed in the report itself that they would be compensated for a decline in GE’s stock price. The report did not say who would be compensating Forensic Decisions.
Source: New York Post Photo: AFP/Getty Images