Stock

GE is dismissed from most of its accounting and disclosure lawsuits

© Reuters. The General Electric Co. logo can be found on its Boston headquarters

From Jonathan stamp

NEW YORK (Reuters) – A US judge in Manhattan has dismissed most, but not all, shareholder claims General Electric (NYSE 🙂 Co hiding billions of dollars in insurance liabilities and using questionable bookkeeping to prop up its electricity business.

In a ruling on Friday night, US District Judge Jesse Furman denied fraud claims based on GE's alleged misrepresentation of its portfolio of long-term care insurance and most of the claims related to long-term service contracts in its electricity division.

The judge allowed shareholders to bring claims that Boston-based GE should have disclosed its reliance on factoring or the sale of future revenue for cash and some claims against a former GE CFO Jeffrey Bornstein.

Furman's 34-page decision followed GE's December 9 agreement to pay $ 200 million to pay the Securities and Exchange Commission fees that investors put in their insurance and power businesses Had led astray.

Shareholders, including pension funds and other investors, urged Furman to treat the SEC settlement as evidence that GE had misled them, while the defendants said the judge could conclude that they had no intention of fraud. Furman turned down both proposals.

Shareholder attorneys did not immediately respond to requests for comment. A GE spokeswoman did not immediately respond to requests for comment on behalf of the defendants, who include former chief executive Jeffrey Immelt.

GE is in a multi-year turnaround focused on improving cash flow, reducing costs, and shedding some units while maintaining aerospace, power generation, renewable energy, and other businesses.

The proposed class action lawsuit will affect shareholders from February 2013 to January 2018, when GE recorded a surprising $ 6.2 billion charge related to its insurance business. The share price fell by around half in the last 18 months of the class period.

Furman had dismissed large parts of an earlier version of the lawsuit in August 2019.

The case is Sjunde AP Fonden et al. Against General Electric Co et al., U.S. District Court, Southern District of New York, No. 17-08457.

Disclaimer: Fusion Media would like to remind you that the information contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indices, futures) and forex prices are not provided by exchanges, but by market makers. As a result, prices may not be accurate and may differ from the actual market price. This means that the prices are indicative and not suitable for trading purposes. Therefore, Fusion Media is not responsible for any trading loss you may incur as a result of using this information.

Fusion Media or anyone involved with Fusion Media assumes no liability for any loss or damage caused by reliance on the information contained on this website, such as data, offers, charts and buy / sell signals. Please be fully informed about the risks and costs associated with trading in the financial markets. This is one of the riskiest forms of investment possible.

Related Articles