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: 129

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"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

Doc Vega posted a blog post

Buying the Last haunted House on the Left (A partial autobiography)

Not to the reader there ever events here that are true and some that are fictional.Chapter IIt was…See More
8 hours ago
Doc Vega posted a blog post

In Memory of Those Who Served

 Bullets flew and ricochetedI was on that hill todayMy Company commander got blown awayI was on…See More
yesterday
Doc Vega posted blog posts
Tuesday
Doc Vega commented on Doc Vega's blog post Plausible Explanation Behind Recent Cryptid Sightings in the Wild!
"cheeki kea I was wrong Emperor Penguins are big and powerful but still alive but this,  A size…"
Tuesday
Doc Vega commented on Doc Vega's blog post Plausible Explanation Behind Recent Cryptid Sightings in the Wild!
"Cheeki kea here's another that they say there have been modern sightings of!  The name of…"
Tuesday
Doc Vega commented on Doc Vega's blog post Plausible Explanation Behind Recent Cryptid Sightings in the Wild!
"cheeki kea, did you ever hear of the giant Imperial Penguins? They were about 6 feet tall and could…"
Tuesday
Doc Vega commented on Doc Vega's blog post Plausible Explanation Behind Recent Cryptid Sightings in the Wild!
"cheeki kea I do not think these giant two legged birds would need to have a bad attitude as long as…"
Tuesday
Olivia Brooks updated their profile
Tuesday
John Miller was featured
Tuesday
tjdavis's 2 blog posts were featured
Tuesday
Zfort Group's blog post was featured
Tuesday
Doc Vega's 6 blog posts were featured
Tuesday
Burbia commented on tjdavis's video
Thumbnail

“What’s His Motive?” - Inside The Mind of George Soros

"Trump calls for George Soros and son to face federal…"
Tuesday
Burbia commented on tjdavis's photo
Tuesday
Profile IconSeeta Sathe and Olivia Brooks joined 12160 Social Network
Tuesday
tjdavis posted a video

Mossad, Terrifying CIA Technology, Blackwater & The Most Secret CIA Unit | John Kiriakou

John Kiriakou served 15 years in the CIA as a Case Officer (Spy) and as CIA's Head of Counterterrorism Operations in Pakistan where he lead the raid that cap...
Monday
tjdavis posted a photo
Monday
tjdavis posted a video

A Critique of the Tavistock Institute - The Mother Of All Conspiracy Theories

An examination of the Tavistock Institute, a theory which seeks to explain how Western societies have been brainwashed by a cabal of social scientists and th...
Aug 31
tjdavis posted a video

“What’s His Motive?” - Inside The Mind of George Soros

In this short clip, Patrick Bet-David, Sebastian Gorka Adam Sosnick, and Tom Ellsworth George Soros and what motivates him to do the things he does. FaceTime...
Aug 27
Doc Vega posted blog posts
Aug 27

© 2025   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