Friday, October 04, 2019
Getting Even
When an accountant, famous for spotting frauds, comes after your company, there isn't much you can do except to say he got it wrong. Then who is going to believe you? That is why this story must give General Electric deep satisfaction. The accountant, Harry Markopolos, famous for outing Bernie Madoff's pyramid scheme, charged that GE was hiding even bigger losses in its Long Term Care business. The Fortune reporter, Shawn Tully, without help from GE or Markopolos, teased details from the numbers and concluded that GE is not in trouble and Markopolos is wrong. If so, Markopolos and the hedge fund backing him in a short of GE stock are both going to lose gobs of money. While the story doesn't restore GE's reputation as a management mecca, it offers a third-party endorsement of GE's board and management. That is the best PR, and GE must be smiling quietly right now.
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