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| GE to pay $50 mn penalty as part of SEC settlement |
| Press Trust of India / New York Aug 05, 2009, 16:57 IST |
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Diversified conglomerate General Electric (GE) will pay a penalty of $50 million to the US market regulator Securities and Exchange Commission (SEC) as part of a settlement related to alleged accounting irregularities.
The settlement concludes the market regulator's investigation of accounting issues at the company.
GE on Tuesday said it has reached a settlement with the SEC, "without admitting or denying allegations of any wrongdoing".
"Under the terms of the settlement, the company consented to the entry of a judgement requiring it to pay a civil penalty of $50 million and to comply with the federal securities laws," GE said in a statement.
The issue pertains to four accounting matters in 2002 and 2003, including those related to GE's since-discontinued commercial paper hedging programme.
Rest of the things were about certain swap derivatives, a change in accounting for profits on spare parts in the commercial aviation engine business and certain year-end transactions in the rail business.
"The complaint alleges two of these errors, those relating to commercial paper hedging and rail transactions, were intentional violations of the anti-fraud provisions of the securities laws, and the remaining two errors were negligent violations of the securities laws," the statement noted.
The firm corrected for the effects of these matters in its financial statements in SEC filings made between May 2005 and February 2008, GE said.
The company pointed out that it reviewed and produced nearly 2.9 million pages of e-mails and other documents to the SEC and incurred about $200 million in external legal and accounting expenses to ensure that all issues were addressed appropriately.
"We have concluded that it is in the best interests of GE and its shareholders to resolve this matter and put it behind us... Consistent with standard SEC practice, we neither admit nor deny the SEC's allegations," the firm added.
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