General Electric has agreed to pay a $50-million fine in response to charges made by the Securities and Exchange Commission that the conglomerate violated a number of accounting rules. The SEC alleges that GE misled investors by releasing false and/or misleading financial statements. SEC officials say that GE broke a number of accounting rules so as to present a more favorable set of statements. These violations include: a faulty application of accounting standards to GE’s commercial paper funding program, a failure in 2003 to correct a mistake made over interest-rate swap, improper sales figures in 2002 and 2003 that falsely boosted revenue by $370 million, and an improper change to accounting figures in 2002 that boosted earnings by $585 million. “GE bent the accounting rules beyond the breaking point,” said Robert Khuzami, director of the SEC’s Division of Enforcement. GE paid the $50 million penalty without admitting or denying the SEC’s allegations.
GE Coughs Up $50M to Settle SEC Accounting Fraud Charge
The SEC says GE broke rules to present a more favorable set of statements.
August 4, 2009