SEC Files Settled Accounting Fraud Case Against GE

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August 4, 2009 at 10:41 am

The SEC filed a settled enforcement action against General Electric Co. today alleging that it used improper accounting methods to increase its reported earnings or revenues and avoid reporting negative financial results. GE has agreed to pay a $50 million penalty to settle the SEC’s charges.

“GE bent the accounting rules beyond the breaking point,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Overly aggressive accounting can distort a company’s true financial condition and mislead investors.”

David P. Bergers, Director of the SEC’s Boston Regional Office, added, “Every accounting decision at a company should be driven by a desire to get it right, not to achieve a particular business objective. GE misapplied the accounting rules to cast its financial results in a better light.”

The SEC stated that it uncovered the accounting violations in a risk-based investigation of GE’s accounting practices that “identified the potential misuse of hedge accounting as a possible risk area.” The SEC also noted that the terms of the settlement took into account the remedial acts taken by GE and its audit committee during the investigation, including improvements to its internal audit and controllership operations. The charges announced today conclude the SEC’s investigation with respect to the company.

GE is represented by former SEC Enforcement Director William McLucas, a partner with WilmerHale in Washington DC.

Quoted:
I remember the left could not stop screaming about the corruption of Bush and Haliburton. The corruption of Obama and GE is 10x as disturbing and the silence from the left is deafening!