10th September 2019
EP Desk

General Electric shares plunged recently after an accounting expert accused the company of fraud, an allegation the industrial giant strongly denied and said was tainted by the accuser's financial incentives.

Harry Markopolos, who warned securities regulators about the Bernard Madoff investment scheme years before that firm went under, accused GE of "running a decades long accounting fraud," according to information on gefraud.com, a website set up by Markopolos and his associates.

Markopolos said that GE will need to bolster its insurance reserves by $18.5 billion in cash and should have booked billions in losses in its oil and gas division.

He is working with an unnamed hedge fund that is betting on GE's share price to fall, an investment tactic known as "shorting" a stock, and he gave the fund access to his research before it was published.

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