Publications
Publications
- January 2021 (Revised May 2021)
- HBS Case Collection
'GEnron'? Markopolos versus General Electric (A)
By: Jonas Heese and David Lane
Abstract
In August 2019, Harry Markopolos—the forensic accountant known for uncovering Bernie Madoff’s Ponzi scheme—alleged that General Electric had committed accounting fraud totaling $38 billion, coining the term “GEnron” for perceived similarities with the 2001 accounting fraud at Enron that brought down that company and its auditor. Specifically, Markopolos claimed, GE would need to generate $29 billion in reserves against its insurance obligations, and restate its financials to recognize $9 billion in unreported losses on an oil subsidiary. Though GE management rejected these assertions, repeated writedowns and restatements of GE’s performance since 2017 had made investors wary. They now scrambled to assess the merits of Markopolos’s claims.
Keywords
Financial Statements; Communication; Energy; Financial Condition; Insurance; Performance; Planning; Business and Shareholder Relations; Risk and Uncertainty; Value; Insurance Industry; Financial Services Industry; Energy Industry
Citation
Heese, Jonas, and David Lane. "'GEnron'? Markopolos versus General Electric (A)." Harvard Business School Case 121-005, January 2021. (Revised May 2021.)
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