He also has three successful home business ideas under his belt. Timothy Walton is a law school graduate and a freelance blogger with a knack for self-sufficiency. Surprisingly, it has managed to come out and clear its name from the cases and remain as one of the long term care insurance firms. GE has gone through tough times in the past years, such as: He did so by buying two million shares from General Electric Securities at $7.93 per share post-sell-off price. The company states that he mixed the reinsurance and insurance contracts forgetting the differences between them.ĭays after the release of his statement, the CEO went ahead to clarify his position. On the accounting issue, GE questioned Markopolos’ method. The company claims that it has plenty of cash to pay its long-term care insurance firm if more money is needed. GE released a detailed explanation of the fraud cases. They term it as an elaborate company that got out of control. It could be right as Markopolos is working with an unknown hedge fund that wants to shortlist General Electric and receives a portion of any proceedings. The CEO said the claims were merely market manipulation. GE’s Response to the ClaimsĪfter Markopolos aired his fraud claims against GE, its management wasted no time and came forward to explain the ordeal. He claims they are changing the reports’ format and only providing top-line profits and revenue for every unit in the form to hide their shortcomings. Markopolos also believes General Electric has been manipulating its financial reports and misleading investors for years. Markopolos estimates 40% of GE’s capital is nonexistent and made through accounting fraud. The company is lessening from the acquisition of oilfield services that have created billions in notional value. He alleges that GE underestimated its long-term insurance unit’s future by devaluing its liabilities falsely for years.Īs many policyholders are starting to file fraud cases, Markopolos believes GE is running bankrupt by pointing out its accounting irregularities. He claims that GE’s long-term care insurance company is short billions of dollars from what it needs to pay its policies. In the 1990s, the CEO of GE outsized its companies and focused on growing its insurance company and establishing a significant long-term care insurance company.Īccording to Harry Markopolos (famous for blowing the whistle on Bernie Madoff’s Ponzi scheme), what GE is doing is a bigger fraud than Enron.
However, it is more of a commercial services company now. It still does in-house manufacturing of medical devices and jet engines. Thomas Edison founded it to manufacture and commercialize light bulbs. At this point, it is hard to know who to believe.
GE denounces the claims declaring their company to be financially stable and provide documentation to back up their declaration.
There is news that GE was created through fraud and is running bankrupt because of the reduced interest rates. As one of the long-term care insurance companies, GE doesn’t have to worry about premium claims going out or coming in as there are no surrender risks or risks of cashing out policies. Over the past years, interest rates have fallen, which shows these insurance companies are not getting their planned investment returns. Many insurance companies are struggling with long-term losses due to the growing healthcare cost and more policyholders collecting their benefits at the same time than ever before. The company helps policyholders pay for nursing homes, home health care, or assisted living, once they can no longer take care of themselves. GE is a long-term care insurance company. Many term it as market manipulation, as the company needs more cash infusion to cater to future insurance claims, causing a significant money drain on investors. The problems relate to alleged fraud in the company’s long-term care insurance business. Investors have many grievances with General Electric, both past, and present.
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