GE settled with the SEC without admitting or denying the charges against it. In addition to paying the $200 million penalties, the company agreed to cease and desist from future violations of the securities laws. The company also agreed to the order requiring it to report to the Commission certain accounting and disclosure controls in its insurance and power businesses for one year.
Allegations against GE
In the SEC Order, the SEC determined that GE failed to disclose material information to investors related to its GE Power and insurance businesses from 2015 to 2017.
The Commission found that GE failed to disclose the nature of the profit of its power business and a $2.5 billion in reported cash collections during the relevant period.
The company also failed to the worsening trends in its insurance business and the possibility that it will suffer substantial losses from the third quarter of 2015 until the first quarter of 2017. The business eventually incurred a $9.5 billion pre-tax charge against GE’s earnings in the fourth quarter of 2017 and required GE to infuse capital of around $15 billion over r seven years to fund expected future insurance claims.
