Deep Dive into the General Electric-Markopolos Case – Here: The Baker Hughes Accounting

On 15 August 2019, General Electric (GE) has been hit by a research report written by former Bernie-Madoff-whistleblower Harry Markopolos which claimed that GE hides roughly 38 bn USD of accounting losses in its numbers. “In fact, GE’s 38 bn USD in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds,” Markopolos wrote in this report. You can find the whole report here: https://gallery.mailchimp.com/199a11600490e42b3dcf6d2ee/files/fa29f469-c222-4a94-a324-ccf2cfea50ef/2019_08_15_GE_Whistleblower_Report.pdf).

In this report, Markopolos also made clear that he holds economic interest in a GE stock price decline via certain agreements with hedge funds. Furthermore, we informally heard that the Markopolos report (or parts of it) have been circulated among a group of selected hedge funds already before its publications (but couldn’t verify this). This would explain the stock price pressure that is observable already in the days before 15 August.

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