LIGHTS OUT

GE Shares Plunge After Madoff Whistleblower Claims ‘Bigger Fraud Than Enron’

Harry Markopolos, an accountant who early on called out Bernie Madoff’s Ponzi scheme, now says industry giant is hiding $38B in losses.

General Electric’s share price tumbled early Thursday after accounting guru Harry Markopolos posted a 175-page report outlining what he called illicit accounting activity that’s a “bigger fraud than Enron.” Markopolos, who was instrumental in exposing Bernie Madoff’s $64.8 billion Ponzi scheme, contends GE has buried losses of $38 billion—roughly 40 percent of its market value. “My team has spent the past seven months analyzing GE’s accounting and we believe the $38 billion in fraud we’ve come across is merely the tip of the iceberg,” Markopolos wrote in the report he posted online Thursday. In an emailed response to The Wall Street Journal, GE said it had not been contacted by Markopolos and denied the accusations of fraudulent practices. “GE stands behind its financials,” a GE spokeswoman told the Journal in an email before the report was published. “We operate to the highest level of integrity in our financial reporting and we have clearly laid out our financial obligations in great detail.” The Journal also noted that Markopolos said he and his colleagues are working with an undisclosed hedge fund that had early access to the report and is betting GE’s share price will decline.