It only took seven years, but on Tuesday the SEC finally took General Electric Co. to task for reporting materially false results in financial statements in 2002 and 2003. The company agreed to pay $50 million to settle SEC allegations that it misled investors, but GE did not admit or deny wrongdoing. The company wrote a much bigger check to the lawyers and accountants who investigated the alleged wrongdoing: roughly $200 million, according to a GE statement.
The SEC’s complaint, filed Tuesday in Connecticut federal court, alleges that on four occasions GE officials approved accounting that was not in compliance with generally accepted accounting principals, including one instance where improper accounting allowed the company to maintain a nearly decade-long string of meeting or beating analysts’ expectations for earnings per share. “When a company makes misleading public statements, the SEC will hold that company accountable,” said David Bergers, the regional director of the SEC’s Boston office, in an interview with the Am Law Litigation Daily.
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