General Electric is facing possible legal action linked to a Securities & Exchange Commission probe into some of its accounting practices.
GE said Tuesday that it had received a so-called Wells Notice from the SEC that indicate authorities are looking into how the industrial group accounted for the run-off of some of its legacy insurance businesses that sat inside its GE Capital division.
The SEC probe was triggered by a January 2018 move to take a $6.2 billion charge to its fourth-quarter earnings linked to weakness in its North American Life & Health insurance portfolio under then-CEO John Flannery.
GE also said at the time that GE Capital, its financing arm, would make $15 billion payments over the next seven years in order to shore up NALH's statutory reserves, starting with around $3 billion in the first quarter of this year, and approximately $2 billion annually from 2019 to 2024.
"The Wells notice is neither a formal allegation nor a finding of wrongdoing. It allows GE the opportunity to provide its perspective and to address the issues raised by the SEC staff before any decision is made by the SEC on whether to authorize the commencement of an enforcement proceeding," the company said in a statement Tuesday. "GE disagrees with the SEC staff with respect to this recommendation and will provide a response through the Wells notice process."
Latest Videos From TheStreet and Jim Cramer:
- Jim Cramer: Shutdowns Make Running NYC Small Business Impossible
- Looking for a FAANG Alternative? Here's Where a Monday.com Investor Finds Value
- PPE and Your Portfolio: Inside a Disruptive Industry
- Jim Cramer: You Have to Sell Movie Theater Stocks
- Don't Try to Price Stocks Around the Election: Here's Why
- What to Expect From the Markets Following a Trump or Biden Victory
- Airline Stocks Fly Higher on Hopes of More Fiscal Aid