8/15, 4:59 PM (Source: TeleTrader)
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GE rejects accounting fraud allegations

General Electric Co. stated on Thursday that the allegations that the company was "on the verge of insolvency" or that it was posting fraudulent financial statements were meritless and unsubstantiated. The claims were published earlier today by a forensic accounting and financial fraud investigator Harry Markopolos.

"Mr. Markopolos openly acknowledges that he is compensated by unnamed hedge funds. Such funds are financially motivated to attempt to generate short selling in a company’s stock to create unnecessary volatility," the company said in a statement, adding that said third-party hedge funds may have leveraged position in order to generate profits after the price of GE securities decrease.

The company also said that GE Insurance's current reserves are well-supported for its portfolio characteristics and that its subsidiary Baker Hughes reports its results on a consolidated basis under the United States Generally Accepted Accounting Principles​, contrary to the allegations made by Markopolos​. "Contrary to Mr. Markopolos’ allegations, GE continues to maintain a strong liquidity position, committed credit lines, and several executable options to monetize assets," the statement concluded.

The company's stock lost 6.37% after the opening bell, changing hands for $8.45 at 10:40 am ET.

Breaking the News / MA