GE falls 6% after Madoff whistleblower says accounting fraudulent, inaccurate

Harry Markopolos, the accounting expert who raised red flags about Bernie Madoff's Ponzi scheme, will release today an over 170 page report on the accounting of General Electric, Thomas Gryta and Mark Maremont of Wall Street Journal report. Markopolos alleges GE has masked the depths of its problems, resulting in inaccurate and fraudulent financial filings with regulators, according to Gryta and Maremont. In an interview with the Journal, Markopolos said his group found GE's insurance unit will need to bolster its reserves by $18.5B in cash. He also faulted the way the company is accounting for its oil-and-gas business. The accounting problems amount to $38B, or 40% of GE's market value, Markopolos told the paper. Before the report was published, a GE spokeswoman told the Journal: "GE stands behind its financials. We operate to the highest level of integrity in our financial reporting and we have clearly laid out our financial obligations in great detail. While we can't comment on the detailed content of a report that we haven't seen, the allegations we have heard are entirely false and misleading." Shares of General Electric are down 6%, or 55c, to $8.48 in premarket trading.

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