Larry Culp, CEO, General Electric
Scott Mlyn | CNBC
The Kansas Insurance Department isn’t impressed with fraud investigator Harry Markopolos allegations against General Electric’s long-term care reinsurance business.
“After initial review, components of this particular report appear fairly simplistic in nature and don’t appear to incorporate certain technical reserve considerations,” the department said in a press release on Monday.
Markopolos, known for sounding the alarm on Bernie Madoff’s scheme, drove down GE stock 11% on Thursday with a 175-page report accusing GE of hiding losses with fraudulent financial statements. Much of his argument revolved around reserves GE would need for its reinsurance business, which is regulated in Kansas.
The Kansas Insurance Department said Markopolos may have missed technical considerations in its “most recent financial examination as of December 31, 2017 and the annual analysis review of the confidential Actuarial Opinion Memorandum at December 31, 2018.”
In after-hours trading Monday, the stock gained about 0.8% as more than 2.7 million shares changed hands. The stock had slipped 1.37% during the normal session, closing at $8.67 per share.
GE has recovered much of the losses it suffered following Markopolos’ report. Much of the rebound came after CEO Larry Culp purchased about $2 million worth of GE shares.
Also, on Monday, former Securities and Exchange Commission Chairman Harvey Pitt appeared on CNBC noting that Markopolos was paid to write his report by an unnamed hedge fund with a short position. He called the report “suspicious.”
