GE to Pay $50 Million to Settle SEC Fraud Charges


GE allegedly used improper accounting methods to boost reported earnings and avoid disclosing negative results. (By Richard Drew -- Associated Press)

By Zachary A. Goldfarb
Washington Post Staff Writer
Wednesday, August 5, 2009

General Electric, a giant conglomerate that owns manufacturing, media and financial companies, agreed Tuesday to pay $50 million to settle federal charges that it committed accounting fraud over a two-year period.

GE settled civil fraud charges brought by the Securities and Exchange Commission, which alleged that the company used improper accounting methods that allowed it to boost its reported earnings and avoid disclosing negative results.

The alleged violations included the company's accounting for certain loans and sales of trains and aircraft parts, the SEC said, and enabled GE to boost earnings by hundreds of millions of dollars.

"GE bent the accounting rules beyond the breaking point," Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement. "Overly aggressive accounting can distort a company's true financial condition and mislead investors."

As is customary with civil settlements, GE did not admit or deny the allegations. "We have concluded that it is in the best interests of GE and its shareholders to resolve this matter and put it behind us on the basis announced today," the company said in a statement.

The SEC complaint, filed in federal court in Connecticut, alleged that GE met or surpassed analysts' earnings estimates every quarter from 1995 through 2004. A company's shares will often fall if it misses these estimates.

Four separate times in 2002 and 2003, GE executives signed off on accounting decisions that were not in compliance with the rules for how public companies must report their finances, the SEC said. Two times, the executives were committing outright fraud, and on the other two they were negligent, the agency claimed.

In one instance, the accounting changes allowed GE to avoid falling short of analysts' expectations, the agency said.

The SEC did not name the executives involved.

The alleged accounting violations ranged widely.

One involved an inappropriate application of accounting rules to certain short-term loans the company received, allowing it to book $200 million in additional profits.

Another involved improper accounting for sales of commercial aircraft engine spare parts, boosting earnings by $585 million.

A third involved reporting sales of trains that hadn't yet occurred, accelerating $370 million in revenue.

And the fourth concerned accounting for financial instruments the company invested in. The SEC did not specify a price tag associated with this violation.

The SEC said GE has taken action to address its concerns. GE said it corrected its financial statements and spent $200 million in legal and accounting expenses to fix the problems raised by the SEC.

Views: 117

Reply to This

Replies to This Discussion

KLC said:
QUOTE >> "agreed Tuesday to pay $50 million to settle federal charges"

who gets this $50 mil dollars?? I wonder...where does it go??? does it end right back up in the pockets of GE?? hmmm

and... is their 2 laws here???...one for the people and one for the companies???


Imagine if one of us was caught doing that with a mom & pop business....they'd bring out the guillotine.....geeez GE cooks the books and they get a slap slap don't do it again give us $50 mil

Yes, the money will probably go right back to GE, "And the fourth concerned accounting for financial instruments the company invested in. The SEC did not specify a price tag associated with this violation." most likely in the form of another Bail out.
The 50 mil fine is a way for the Gov to throw John Q public a bone, (the Gov holding GE accountable, LOL)
KLC said:
oh please tell me they didn't get a BAILOUT too!!!!!!!!!!!!!

ricoyung said:
KLC said:
QUOTE >> "agreed Tuesday to pay $50 million to settle federal charges"

who gets this $50 mil dollars?? I wonder...where does it go??? does it end right back up in the pockets of GE?? hmmm

and... is their 2 laws here???...one for the people and one for the companies???


Imagine if one of us was caught doing that with a mom & pop business....they'd bring out the guillotine.....geeez GE cooks the books and they get a slap slap don't do it again give us $50 mil

Yes, the money will probably go right back to GE, "And the fourth concerned accounting for financial instruments the company invested in. The SEC did not specify a price tag associated with this violation." most likely in the form of another Bail out.
The 50 mil fine is a way for the Gov to throw John Q public a bone, (the Gov holding GE accountable, LOL)

Sorry, I hate to be the bearer of bad news: General Electric Gets a $140B Bailout - What's the Point of AAA?-- "In particular, G.E. has chosen to fund its finance business with short-term commercial paper rather than secure more stable long-term funding based on its triple-A rating--which, it appears, turns out to be fiction."
ricoyung said:
KLC said:
oh please tell me they didn't get a BAILOUT too!!!!!!!!!!!!!

ricoyung said:
KLC said:
QUOTE >> "agreed Tuesday to pay $50 million to settle federal charges"

who gets this $50 mil dollars?? I wonder...where does it go??? does it end right back up in the pockets of GE?? hmmm

and... is their 2 laws here???...one for the people and one for the companies???


Imagine if one of us was caught doing that with a mom & pop business....they'd bring out the guillotine.....geeez GE cooks the books and they get a slap slap don't do it again give us $50 mil

Yes, the money will probably go right back to GE, "And the fourth concerned accounting for financial instruments the company invested in. The SEC did not specify a price tag associated with this violation." most likely in the form of another Bail out.
The 50 mil fine is a way for the Gov to throw John Q public a bone, (the Gov holding GE accountable, LOL)

Sorry, I hate to be the bearer of bad news: General Electric Gets a $140B Bailout - What's the Point of AAA?-- "In particular, G.E. has chosen to fund its finance business with short-term commercial paper rather than secure more stable long-term funding based on its triple-A rating--which, it appears, turns out to be fiction."


http://seekingalpha.com/article/105984-general-electric-gets-a-140b...
Sorry, Hyperlink wasnt showing up, so here it is.

RSS

"Destroying the New World Order"

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

TOP CONTENT THIS WEEK

Latest Activity

Burbia commented on Bob Renner's photo
Thumbnail

Just trust your television,media and Government to Fuck You Over Daily

"Luisa Marie Neubauer had been identified as a handler for Greta. Here is an article from Jew World…"
2 hours ago
Chris of the family Masters posted blog posts
10 hours ago
Chris of the family Masters posted photos
12 hours ago
Bob Renner posted photos
21 hours ago
rlionhearted_3 replied to MAC's discussion EMA, Famines & Farmicide!
" I became life on the family farm in Arizona. It’s true, farmers are being paid to…"
yesterday
Doc Vega commented on Doc Vega's blog post Short Story Entitled "The Time Tractor" by Doc Vega
"cheeki kea Good One!"
yesterday
Less Prone replied to MAC's discussion EMA, Famines & Farmicide!
"This video is unavailable. Rumble, hooktube, vimeo? New link..."
yesterday
Chris of the family Masters's 4 blog posts were featured
yesterday
Less Prone's blog post was featured

Covidiocracy Australia Sydney July 17, 2021, and...

“From midnight tonight a ring of steel will surround 110 Sydney suburbs across Liverpool, Fairfield…See More
yesterday
Patrick C Conway's blog post was featured

Veteran's Administration needs to reduce the amount of compensation

The VA apparently needs to reduce their patient load and reduce the amount of compensation being…See More
yesterday
Doc Vega's blog post was featured

Nobody Knocking at my Door Anymore

No one left to cook for Feeling like an Autumn leaf laying on the shore Can't stand to be alone…See More
yesterday
Chris of the family Masters posted blog posts
yesterday
Patrick C Conway favorited Bob Renner's photo
yesterday
Chris of the family Masters favorited Bob Renner's photo
yesterday
Chris of the family Masters favorited Bob Renner's photo
yesterday
cheeki kea commented on cheeki kea's blog post Hey MEDdleSAFE - Time To Answer Questions before the Questions Answer Themselves !
yesterday
cheeki kea commented on Doc Vega's blog post Short Story Entitled "The Time Tractor" by Doc Vega
yesterday
cheeki kea commented on Bob Renner's photo
yesterday
cheeki kea commented on Bob Renner's photo
yesterday
rlionhearted_3 commented on Bob Renner's photo
Thumbnail

Just trust your television,media and Government to Fuck You Over Daily

"Well, I saw her speech at the UN, quite dramatic! Great acting job! Then watched her at an…"
yesterday

© 2021   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted