General Electric share price: what’s the latest after stock plunge?

General Electric saw the sharpest decline in its share price in more than a decade on Thursday last week, after Madoff whistle-blower Harry Markopolos released a new report condemning the company of issuing fraudulent financial statements to mask its problems.

A website, GEfraud.com, was created to circulate the report, where Markopolos calls the company ‘a bigger fraud than Enron’ and that its financial activities have left ‘GE on the verge of insolvency’.

GE boasts ‘long history’ of account fraud, report says

Markopolos’ allegations against GE certainly carry weight with investors. After all, he is a certified fraud examiner and the man responsible for revealing that Bernie Madoff’s wealth management business was in fact a huge ponzi scheme.

‘My team has spent the past 7 months analysing GE’s accounting and we believe the $38 billion in fraud we’ve come across is merely the tip of the iceberg,’ Markopolos said in the 175-page report.

He also claims that GE has a ‘long history’ of accounting fraud, going as far back as 1995 when the company was under the stewardship of former CEO Jack Welch.

GE labels allegations ‘meritless’

In the wake of the allegations made in the 175-page report, GE’s stock closed 11% lower on Thursday at $8.01 per share.

‘The claims made by Mr. Markopolos are meritless,’ GE said in a statement.

‘The company has never met, spoken to or had contact with Mr. Markopolos and we are extremely disappointed that an individual with no direct knowledge of GE would choose to make such serious and unsubstantiated claims,’ the company added.

Over the last 12 months, the company’s stock has lost a third of its value, though on a year-to-date basis GE is trading 4% higher.

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GE stock drop attracts short-seller interest

Since last week, short-held positions against GE have risen by 13.5% to $14.3 million, according to New York-based S3 Partners in report by Reuters.

‘When short sellers see something like this they tend to jump in as a pack,’ S3 Partners Managing Director of predictive analytics Ihor Dusaniwsky. ‘We’ve not seen any covering in size.’