Stanley Druckenmiller says he bought GE stock during plunge amid fraud accusations

Stanley Druckenmiller
Katie Kramer | CNBC

Hedge fund manager Stanley Druckenmiller said he bought General Electric shares on Thursday during the stock's double-digit plunge brought about by a report from Madoff whistleblower Harry Markopolos accusing the conglomerate of an Enron-like fraud.

"I believe Culp ... I bought stock today," Druckenmiller told CNBC's Kelly Evans in a statement. The hedge fund manager already held 6.2 million shares of GE, according to filings.

GE shares cut losses slightly on the news of the Druckenmiller position, but were still down 11% and headed for the worst decline in 11 years.

General Electric's response is wrong and they need to be more aggressive: Joe Terranova
General Electric's response wrong, they need to be more aggressive: Terranova

CEO Lawrence Culp vehemently denied the Markopolos accusations Thursday afternoon, calling the report "market manipulation — pure and simple" in a statement.

Markopolos, who raised red flags about the Ponzi scheme of Bernie Madoff years before it fell apart, targeted GE in an investigation for which he is being paid by an unnamed hedge fund. The financial investigator says he gave the report to this hedge fund, along with regulators, before its public dissemination on Thursday and that the hedge fund has made bets against GE's stock.

He writes that after more than a year of research he has discovered "an Enronesque business approach that has left GE on the verge of insolvency." His investigation centers around accounting irregularities in GE's long-term care insurance business and oil and gas business.

Druckenmiller, who once bet against GE shares, is CEO of the Duquesne Family Office. His former hedge fund had a long-term track record of beating the market. GE was the 17th largest holding of the family office at the end of the second quarter, according to Microsoft and Amazon were its biggest holdings.

WATCH: GE's Larry Culp responds to accounting allegations

GE's Larry Culp on accounting accusation: This is market manipulation
GE's Larry Culp on accounting accusation: This is market manipulation