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Time to "short" General Electric?

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The accountant who blew the whistle on Bernie Madoff’s scheme is blowing the whistle again with a new report attacking GE’s (GE) accounting practices.

In a 175-page report posted online, forensic accountant Harry Markopolos and his fraud team allege that GE is committing $38 billion in accounting fraud.

t’s the biggest, bigger than Enron and WorldCom combined,” he wrote. “In fact, GE’s $38 Billion in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds.”

 

https://finance.yahoo.com/news/madoff-whistleblower-claims-ge-committing-accounting-fraud-131211577.html

Perhaps it's too late. I see the share price is down over 12% in today's trading so far.

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I was reading some about this story and what I cannot figure out is how Harry Markopolos and his team got their information. They are not part of an official government organization, so they don't have subpoena power. How did they piece this together and nobody else did?

I don't really want to go through the 175-page report to figure it out. The guy was right about Madoff, so he certainly has some credibility.

 

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7 hours ago, Mike Friedman said:

I was reading some about this story and what I cannot figure out is how Harry Markopolos and his team got their information.

Good question. Perhaps the answer lies in the title "forensic accountant". Perhaps they dug deep into every line item in GE's statutory reports, whereas most investors and the journalists that cover the markets only focus on the headline figures. It'll be interesting to see what comes out of this whatever the truth is.

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