Accounting
Posting as :
works at
Highlighted IconHIGHLIGHTED

GE paid a $50m settlement to the SEC in 2009 for accounting fraud. I’m not sure why so many people in this thread seem to be skeptical of the claims made by the whistleblower The audit committee Chair did an interview on CNBC and she didn’t inspire confidence...just talked about how great the people are that she works with. It would have been nice if anyone from the company actually said they took the time to read the report and spoke to specifics before just making knee jerk appearances in financial media. She mentioned they have another loss recognition test in Q3 2019 for the LTC block so we’ll see what happens...

Reaction Icon Like
like
Arrow Icon

It is in this instance since the hit piece has just enough truth to not be a complete fabrication. In some instances it is not legal. This kind is

Reaction Icon Like
Arrow Icon

Can anyone comment on what goes on behind the scenes in these types of scenarios? Does the audit team from KPMG get called in and have a fire drill to re-review everything in light of a report? I’m curious what tends to happen in the background after news like this hits. In public they obviously put on a brave face and speak confidently but I’m guessing it is chaos behind the scenes

Reaction Icon Like
like
Arrow Icon

Re-review? Yeah we’ll get right on that

Reaction Icon Like
Arrow Icon
Recent IconRecent

If these clowns listened to Peter Olinto & Tim Gearty they wouldn’t never done this crap

Reaction Icon Like
likefunnyhelpful
Arrow Icon

Still thumbing through this but the more I read the more this looks like a hit piece. Of the $30B they estimate as FRAUD, 1/3 of their estimate related to ASU 2018-12 which is not required to be adopted until 2021. They compare it to other insurers who have early adopted which creates a disconnect. They also go after VIE consolidation on GE’s sell down from 62% ownership of Baker Hughes to 50.4 which is obviously above the PRESUMED threshold of consolidation assuming voting power follows. They also go after their segment disclosures as fraudulent but in reality they meet the minimum requirements of GAAP while others may disclose more It’s not straight forward but they aren’t setting themselves up for a great story. Not saying there aren’t dollars to be reserved (yet) but... this is not a clean story.

Reaction Icon Like
likesmarthelpful
Arrow Icon

Agreed PWC1. That was known from the start. 👍🏻

Reaction Icon Like
Arrow Icon

Pwc does the audit for Tesla and Herbalife, so I suppose it’s a race to see who goes under first

Reaction Icon Like
likefunny
Arrow Icon

They will in bankruptcy D1. Wait for the equity wipeout and trigger to restructure debt

Reaction Icon Like
Arrow Icon

If true, and I hope not, it is really bad for the industry and the country

Reaction Icon Like
like
Arrow Icon

Good luck automating auditor intuition and judgment in fraud cases. While some automation will occur I think you are over stating things

Reaction Icon Like
like
Arrow Icon

Been trying to download the report to try and pilfer through the numbers. Without seeing the math and an ability to compare to the accounting standards to see if this is fraud or one of the scenarios where accounting rules and reality may not jive in the way people expect. He went as far as to say they shouldn’t have consolidated Baker Hughes which seemed like a crazy allegation under the VIE model which is predisposed to consolidation

Reaction Icon Like
like
Arrow Icon

He also recently made a whistleblowing claim for some banks and made $100k off that

Reaction Icon Like
like
Arrow Icon

It’s hard to get behind this type of thing when the people writing it hold a large short position. I’m sure they unloaded their position some today

Reaction Icon Like
smart
Arrow Icon

His point on the LTC reserve deficiency seems reasonable - he made a comparison to the LTC blocks owned by Unum and Pru and GE had very low reserves per policy by comparison... And GE already had to increase their reserves

Reaction Icon Like
like
Arrow Icon

Companies get whacked with lawsuits every time there is a restatement. It is clockwork. The lawsuits stick when there is intent or wreck-less behavior. I understand their argument in concept but you have to marry numbers and accounting rules. Until the numbers are lined out and not the sound bite stats I am reserving judgment. Sound bites sound good for a reason

Reaction Icon Like
like
Arrow Icon

It would be one thing if he wrote this report believing what he said. It would be another if he intentionally wrote this report not believing it in order to make money - that in itself is the definition of fraud. I guess time will tell if anything happens to GE, KPMG, or Markopolos/hedge company he works for.

Reaction Icon Like
like
Arrow Icon

That’s the way I read it. Doesn’t mean you have to like it or agree with it. There is a question of ethics relative to his professional certifications depending on what he has a basis for vs. reality but that isn’t a legal issue

Reaction Icon Like
Arrow Icon

That's a good point. This does remind me of the movie the Big Short. Maybe there is some truth to the inaccurate reporting (whether intentional or not) which caused the hedge fund the whistleblower worked for to short the stock. Still though this story would be more impactful if Markopolos tried to confront GE first about the possible inaccurate reporting.

Reaction Icon Like
like
Arrow Icon

So let me play out a scenario. SEC finds nothing substantial in Markopolos report about GE. Hedge fund he works for has already made millions by shorting GE's stock due to this report. Nothing would happen to him or the hedge fund he works for?

Reaction Icon Like
Arrow Icon

I believe that is right D2. There’s enough of a basis to say it wasn’t pulled out of thin air but by no means solid footing

Reaction Icon Like
Arrow Icon

His net worth is estimated between $200-$300M depending on the value of his shares. $2M is a drop in the bucket to spend to try and regain some of his personal losses from today.

Reaction Icon Like
Arrow Icon

I watched a few of his interviews - one of the other good points he makes is that GE has had a history of consistently large, negative surprises in their financial reporting that they make at the last minute.

Reaction Icon Like
Arrow Icon

GE does not have a clean history for sure. But, he is alleging fraud not errors. Big difference there.

Reaction Icon Like
Arrow Icon

Additional Posts

I was cleaning out my desk drawers in my home office and found this. For the young people out there this was the coolest smart phone a 12+ years ago

Post Photo
likefunnyupliftingsmart
Reaction Icon Like
Arrow Icon

Any openings for a commercial/corporate counsel in East Bay- near San Ramon?

Reaction Icon Like
Arrow Icon

Am I the only one on the bench? God Please give me the will to reinvest. Amen.

like
Reaction Icon Like
Arrow Icon

Delta broke my checked in luggage wheel and is reimbursing me around $150. What should I get? Domestic carry-on mostly.

like
Reaction Icon Like
Arrow Icon

Has anyone had any experience working for or applying to the boutique IT consulting firm “Prokarma”

like
Reaction Icon Like
Arrow Icon

Any Oliver Wyman fish open to chat about the CIS or CMT industry lines? Saw post and really interested in learning about culture and projects.

like
Reaction Icon Like
Arrow Icon

How do I set up Skype for business so that I can ping my friends at other companies that use Skype? Please respond :)

like
Reaction Icon Like
Arrow Icon

ACD salary range in NY vs Chicago for full time?

like
Reaction Icon Like
Arrow Icon

Feeling like I’m running out of steam. This is my second busy season, no cpa, two bad reviews and probably another on the way. What are my options? What role can I apply for with good pay?

like
Reaction Icon Like
Arrow Icon

Philosophical question: Has McKinsey’s brand diminished in luster? Context: Randomly was at a church picnic (socially distanced) with some baby boomer era former MBB consultants. When they found out I was in consulting (big 4), they weirdly started talking about how McKinsey’s brand value wasn’t what it used to be to clients and for exit opportunities. Silly gripes or true?

likefunny
Reaction Icon Like
Arrow Icon

Best way to spend the 2 weeks left before I officially start maternity leave? Client work wrapped last week and I spat out four proposals, now just CPE training left. Must be something else to do....

Reaction Icon Like
Arrow Icon

How much is rent for you guys? Location and apartment size?

likefunny
Reaction Icon Like
Arrow Icon

I have two girl friends that are conspiracy theory believers and think COVID is a conspiracy.. (cont’d)

like
Reaction Icon Like
Arrow Icon

How valuable is learning pandas library with python on data related client projects? Anyone have some hands on stories?

like
Reaction Icon Like
Arrow Icon

Deloitte laid off CM analyst and consultants .. tech adoption / digital enablement. A recruiter contacted me about a role that states a plus for knowing Deloitte CM method and Change Scout. It is a contractor to hire position. 100% remote now and possibly future. Company is Cleveland, OH. DM me and I can send you the deets. Rate is too low for me.

like
Reaction Icon Like
Arrow Icon

A little birdie told me time to jump ship, layoffs are coming... this firm is terrible with managing staff/forecasting needs - hope they trim at the top this time...ugh

like
Reaction Icon Like
Arrow Icon

Cheap travel recommendation from NYC where I can enjoy nice scenery, food, etc but spend the majority of my time cranking out MBA application essays? Plan B is just stay in NYC...

like
Reaction Icon Like
Arrow Icon

Mom🐠 when you’re pregnant, when did you tell your client?

Reaction Icon Like
Arrow Icon

First resume out of school. Keep it high level? General points to include? Know this is a repeat post but no search function 😑

like
Reaction Icon Like
Arrow Icon

Does the firm cover insurance if you accidentally scratch another car with a corporate rental ? #askingforafriend

like
Reaction Icon Like
Arrow Icon
That was just a preview…
Sign Up to see all discussions
  • Discover what’s it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

OR

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the Fishbowl app

Get realtime notifications and see
what's happening in your industry
from the palm of your hand.

Please enter a valid number