By Tyler Durden
As Henry Markopolos readily admits, GE has reportedly been playing fast and loose with its revenues for decades, which is why thousands of analysts were shocked to see the dogged Madoff whistleblower publish a report Thursday morning warning about ‘Accounting Irregularities’ at the once-mighty industrial conglomerate, which amounted to almost $40 billion.
Markopolos continued that the fraud growing inside GE was “bigger than Enron and Worldcom combined” (which is difficult to imagine given GE’s relatively puny market cap), and that most of the dirt could be found within its insurance unit, which will need to bolster its reserves by $18.5 billion in cash, and faulted the way the company is accounting for its oil-and-gas business. All told, he said, the accounting problems amount to $38 billion, or 40% of the conglomerate’s market value.
But in a tough interview with CNBC Thursday morning, Markopolos defended his findings, all while repeatedly refusing to disclose with whom he is working (It’s reportedly a US-based mid-sized hedge fund)
“Years ago, I would sit down at analyst luncheons and everybody would joke about GE and how they were cooking their earnings under Jack Welch then of course again under Immelt…GE took off like a rocket under take …read more
Source:: Zero Hedge