GE to Pay $50 Million to Settle SEC Fraud Charges

Source: WaPo

General Electric, a giant conglomerate that owns manufacturing, media and financial companies, agreed Tuesday to pay $50 million to settle federal charges that it committed accounting fraud over a two-year period.

GE settled civil fraud charges brought by the Securities and Exchange Commission, which alleged that the company used improper accounting methods that allowed it to boost its reported earnings and avoid disclosing negative results.

The alleged violations included the company's accounting for certain loans and sales of trains and aircraft parts, the SEC said, and enabled GE to boost earnings by hundreds of millions of dollars.

"GE bent the accounting rules beyond the breaking point," Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement. "Overly aggressive accounting can distort a company's true financial condition and mislead investors." ....

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/08/04/AR2009080401258.html?hpid=sec-business

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So let me get this straight. Basically GE will end up paying fraud charges with bailout money? Sounds about right.

Otherwise, isn't any penalty you pay a "got caught" tax?

:shrug:

PB

In matters like this, the fine should the amount by which earnings were overstated, plus ten percent....

Can't believe I didn't think of that.

Same thing anyway...