General Electric Fined For Accounting Fraud
General Electric Co. has been charged with misleading its investors through improper accounting aimed to make the company seem more attractive to potential investors. The charges against General Electric were brought on by the Securities and Exchange Commission, the leading US securities watchdog. General Electric settled the claim by paying the SEC a $50 million penalty
The charges followed an exhaustive investigation into the conglomerate's finance, aviation, healthcare and energy divisions, which saw it assess more than 2.9m internal company documents and e-mails and which twice led GE to restating its profits.
The Securities and Exchange Commission accused General Electic of four breaches of accounting standards. They found that high level executives at GE had signed off on accounting that did not comply with common accounting standards on several occasions between 2002 and 2003, and this lead to a $585 million increase in the company's profit. General Electric has admitted that two of the faulty financial statements were intentional, but states that two others were a result of negligence.