Sometimes it isn't until people leave an organization that they spill the beans.
General Electric Co. (GE) - Get Report shares were falling 6.23% to $7.45 on Friday after former GE employees revealed to federal investigators that irresponsible oversight among some senior people at the company was concealing risks in GE's insurance business. The employees spoke with The Wall Street Journal, which published an article Friday.
Those running GE's insurance business failed to recognize risks in the insurance business, and ultimately failed to build up sufficient reserves relative to the capital at risk. The reeling conglomerate had been under scrutiny for misrepresenting its accounts, which were tied to an insurance reserves shortfall leaving GE in need of $15 billion.
The company responded to Friday's revelation. Here's its statement:
"We are exploring every option to manage and mitigate risk from the company's legacy insurance liabilities. We have a strong commitment to integrity in our controllership and financial reporting. We are not going to comment about the specifics of ongoing legal matters."
The stock has fallen about 57% so far in 2018.