Featured Article

GE Fined for Accounting Violations
Article Audio

0:45 minutes (0.72 MB)
Download this Article
Share this Content

General Electric has been fined $50m by the Securities and Exchange Commission over charges that it misled investors.

The charges relate to financial statements produced by GE in 2002 and 2003.  According to the SEC, the way that GE accounted for hedging commercial paper, and certain transactions at its rail unit intentionally violated securities law. An SEC spokesman described the company as bending the accounting rules beyond breaking point.

Also in question were accounting for swap derivatives and the recording of profits on the sales of spare parts for jet engines, but regulators concluded in these cases the conglomerate was merely negligent.

In paying a $50m civil penalty, GE has not admitted or denied wrongdoing. The company said in a statement it had decided it was in its best interests and those of shareholders to resolve the matter.