WASHINGTON – US markets regulators yesterday hit General Electric with a US$200 million (RM812 million) fine for misleading investors about results in its power and insurance businesses.
"Investors are entitled to an accurate picture of a company's material operating results," said Stephanie Avakian, director of enforcement and the Securities and Exchange Commission (SEC).
"GE's repeated disclosure failures across multiple businesses materially misled investors about how it was generating reported earnings and cash growth as well as latent risks in its insurance business."
The issues stem from 2017 and 2018, when GE's stock price fell almost 75% "as challenges in its power and insurance businesses were disclosed to the public", the SEC said in a statement.
The industrial giant failed to tell investors that some of its cash in its power and financial services businesses was "coming at the expense of cash in future years".
There were additional issues with results from 2015 to 2017, in its long-term care insurance portfolio.
The company did not admit or deny the violations of the fraud rules but agreed to pay the fine and provide additional reporting to the SEC for one year on its insurance and power businesses, the statement said. – AFP, December 10, 2020
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