Tuesday, August 25, 2009
SEC Fumbles Again
"General Electric Co. agreed to pay a $50 million fine to the [SEC] to settle civil fraud and other charges that GE's financial statements in 2002 and 2003 misled investors. ... In a complaint filed with the US District Court in Connecticut, the SEC said the Fairfield, Conn., conglomerate used improper accounting methods to boost earnings or avoid disappointing investors. 'GE bent the accounting rules beyond the breaking point, said Robert Khuzami, director of the SEC's Division of Enforcement, in a prepared statement. 'Overly aggressive accounting can distort a company's true financial condition and mislead investors.' GE agreed to pay the fine without admitting or denying the SEC's allegations. ... 'We are committed to the highest standards of accounting,' said GE spokeswoman Anne Eisele. ... The SEC complaint focused on GE's accounting for four iterms over various periods: derivatives, commercial-paper funding, sales of spare parts and revenue recognition", Paul Glader and Kara Scannell at the WSJ, 5 August 2009, link: http://online.wsj.com/article/SB124939838428504935.html.
Another SEC triumph. Khuzami, why don't you and GE find a way to blame this on Joe Jett, my 8 August 2008 post: http://skepticaltexascpa.blogspot.com/2008/08/joe-jetts-alive.html. Why didn't KPMG which GE paid $133 million last year find these problems?