Madoff whistleblower targets GE2019|01:11
The whistleblower who warned regulators about Bernard Madoff's Ponzi scheme is now crying foul about GE. Forensic accountant Harry Markopolos alleges General Electric's cash situation is far worse than what the industrial conglomerate disclosed in its latest annual filing. Markopolos released a research report that accuses GE of hiding more than $38 billion in potential losses. He said the company's liquidity situation was - in his words - "more serious than either the Enron or WorldCom accounting frauds." The news sent GE's beleaguered shares down more than 8% in early trading Thursday, making it the second biggest decliner on the S&P 500. Once a stock market darling and one of the most admired companies in the U.S., GE shares have fallen 86% from their peak 19 years ago. GE said it "stands behind its financials." It also said Markopolos is known to work for unnamed hedge funds that typically engage in short selling, in other words, making bets that a company's stock would fall. A disclaimer in the research report says it was drafted by Forensic Decisions--a company funded by an unnamed third-party entity that could benefit from a decline in GE's share price.