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Home / Business / GE CEO Larry Culp bought the company's shares after allegations of fraud

GE CEO Larry Culp bought the company's shares after allegations of fraud



Larry Culp, Managing Director, General Electric

Scott Mlyn | CNBC

General Electric CEO Larry Culp bought nearly $ 2 million worth of stock after Madoff warned Harry Markopolos called the company "a bigger fraud than Enron."

A Thursday night filing with the SEC revealed that Culp bought 252,200 shares for approximately $ 7.93 each. Culp, which took over the struggling industrial conglomerate last year, has roughly doubled its stake in GE shares this week, according to the filing.

GE shares increased by about 2.5% in after-hours trading.

The 1

75-page report targeted the Markopolos company and accused it of issuing false accounts to hide the extent of its accounting problems. Following these claims, GE shares plunged 11% during the normal session to $ 8.01 per share, their biggest fall since April 2008.

Culp, a former Danaher CEO, said the allegations were false and driven by market manipulation . [19659002] "GE will always take allegations of financial mismanagement seriously. But this is market manipulation – plain and simple," he said in a statement. "Mr. Markopolo's & # 39; report contains false statements of fact, and these allegations could have been corrected if he had checked them with GE before publishing the report."

An American hedge fund, which Markopolos would not name, paid Markopolos to list and publish the report, and Markopolos told CNBC that he received a "decent percentage" of the profits the hedge fund would earn from investing in GE.

Leslie Seidman, a GE board member and chair of the audit committee, also pushed back on the Markopolos report, which she said contained "numerous novel interpretations and direct errors about the actual accounting requirements."

"In his own words, he will personally be able to benefit from today's significant market reaction to the report, and he is selectively front-running widely reported regulatory processes and rigorous investigations without the benefit of access to GE's books and records," Seidman said.

The report went through a list of accounting irregularities that Markopolos says constitute a $ 38 billion scam, representing more than 40% of GE's market value. Much of the report focuses on GE's business of reinsuring long-term insurance providers.


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