GE issues more detailed response to fraud investigator

Key Points
  • GE's issued a more detailed response to fraud investigator Harry Markopolos' allegations.
  • Shares of GE were down slightly Monday morning as analysts warned not to buy the dip.
  • GE stands by its accounting practices and says it has sufficient reserves for its long-term care insurance business, under fire from Markopolos.

General Electric's head of investor relations released a more detailed statement about accounting practices, which were under fire last week from fraud investigator Harry Markopolos.

"We operate with absolute integrity and stand behind our financial reporting," wrote Steve Winoker, vice president of investor communications in a Q&A for investors.

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Winoker wrote that GE believes it has sufficient reserves for it's long-term care insurance business and that it's consolidated financial statement for its investment in Baker Hughes was proper.

Markopolos, who uncovered Bernie Madoff's scheme, accused GE of not having sufficient reserves for its long-term care business and not properly accounting for losses at Baker Hughes. He called GE a bigger fraud than Enron, sending it's stock down 11% on Thursday.

The stock regained much of its losses Friday, but was down slightly Monday morning.

Some analysts have cautioned not to buy the bounce in GE stock.