The Five Dumbest Things on Wall Street: July 30

GE's Jive

Sorry General Electric(GE), but we don't salute you or your petty profiteering.

GE agreed Tuesday to pay a total of $23.5 million to settle an investigation by the Securities and Exchange Commission into the activities of some of its non-U.S. units with regard to the United Nations Oil-for-Food program in 2000-3. The GE subsidiaries allegedly gave cash and goods worth $3.6 million to the Iraqi government in return for 18 contracts to supply medical and water equipment.

GE didn't admit fault in the settlement, which was announced simultaneously to the disclosure of the charges. That's for those of you wondering how come you hadn't heard about GE's chicanery before this week.

The $23.5 million sum breaks down to a $1 million fine and the disgorgement of $22.5 million in profits plus interest. GE, meanwhile, recently reported net income of $3.3 billion in its latest quarter.

That's for those of you wondering how insignificant the SEC's wrist slap is in the grand scheme of GE's business.

Look, we understand that GE was not alone in using kickbacks to secure business under the scandal-ridden humanitarian aid program. And they are not the only American industrial company to settle with the SEC for their misdeeds.

Still, the whole episode leaves a bad taste in our mouths. GE sloughed off this latest infraction as a minor case of bad bookkeeping in the same puffed-up way it paid the SEC $50 million last summer to resolve fraud charges relating to hedging activities in 2002 and 2003.

By the way, GE didn't admit or deny wrongdoing back then either.

Just in case you were wondering.

Dumb-o-meter score: 95 -- So much for Six Sigma. GE should try Seven Sigma instead. Maybe Eight.

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