Is GE a Fraud?
This is my accounting fraud team’s ninth insurance fraud case in the past nine years and it’s the biggest, bigger than Enron and WorldCom combined. 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. Enron’s CEO, Jeff Skilling resigned on August 14, 2001, Enron was downgraded to junk status on November 28th and filed for bankruptcy protection on December 2nd. On March 11, 2002 WorldCom received document requests from the SEC related to its accounting and loans to officers; on April 30th CEO Bernie Ebbers resigns regarding his $400 million in personal loans from the company, then on June 25th CFO Scott Sullivan is fired before WorldCom files Chapter 11 on July 21st. It’s been 17 years since WorldCom so we’re long overdue for something like GE. As you read our slide deck you’ll see that GE utilizes many of the same accounting tricks as Enron did, so much so that we’ve taken to calling this the “GEnron” case
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.