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Markopolos Maintains His Stance Despite GE Stock Recovering

Fraud detector Harry Markopolos caused GE stock to fall by around 11% on a single day by publishing numerous numbers and charts along with accusations against GE’s management, analysts, and rating agencies, of displaying behaviors reminiscent of the Enron scandal. However, the stocks came back up by 10% after CEO Culp invested around $2M during this dip. Analysts defended GE as well, stating that Markopolos’ claims were inaccurate or calculated on the basis of outdated information, which had already been factored into General Electric’s stock price.

Markopolos is famous for discovering Madoff’s fraudulent schemes. He accused GE, stating that it was providing fake earnings and revenue reports, had hidden losses and debt, uninterpretable financial statements, creative accounting practices and misleading misleading disclosures, which were all perpetrating a fraud worth $38B. Markopolos stated that his report had been prepared for an anonymous hedge fund that was short on General Electric stock. On Friday, the markets swung favorably to GE’s side, decidedly dismissing his allegations.Gefraud.com, a website run by Markopolos had fashioned the company’s logo to resemble Enron’s logo. He stated that GE was making use of fraudulent accounting tricks, which had been seen in the Enron scam as well.

He accused analysts, auditors, and actuaries as well, claiming that they overlooked liabilities worth billions, accruing to GE’s insurance business. Most of Markopolos’ accusations were centered around the company’s complex accounting practices. However, this mission to expose GE isn’t winning him allies from the industry. Nick Heymann of William Blair stated that Markopolos was simply stirring trouble without having any actual evidence, which was widely unethical. Heymann stated that the stock had reached new lows for no reason at all. Markopolos was confident that GE would be filing for bankruptcy soon. He cited the case of Enron and Worldcom, who each lasted around four months after his report came out.

Arnold Miller
Arnold Miller Author
EDITORIAL MANAGER At Global Market Journal

Arnold Miller is pro at explaining and presenting the business-related complex concept in a simple way. He has the ultimate skill of effectively writing down the news related to business mergers, political & financial affairs, acquisitions, and the latest business trends being followed by the globally established organizations. He also takes part in various surveys and key interviews with professionals, industry experts, and various organizations. He is also known for his immense knowledge of economics. Arnold had gained around 5 years of experience as a Business Analyst in a well-reputed production firm before choosing the field of Content Writing.

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