Sweeping, open allegations of fraud against major public companies in the past week raise fresh questions about the effectiveness of regulatory whistleblower programs.
Harry Markopolos, best known for having his allegations against Ponzi operator Bernie Madoff ignored for years, took his new claims of accounting fraud at General Electric directly to the open market. In a 175-page report that is more graphic slide deck than narrative, Markopolos says GE, already under investigation for other accounting issues, is using accounting games to hide $38 billion in unrecognized losses, mostly in a consolidated business unit and in the company’s long-term care insurance business. Company officials vehemently denied allegations of wrongdoing.
