General Electric (GE) made headlines yesterday after Madoff whistleblower Harry Markopolos published a 175-page report alleging accounting fraud.
Markopolos said he found that its insurance unit would need an $18.5 billion boost to its reserves. He also told that paper that other accounting issues, including in its oil and gas business, would amount to around $38 billion.
He called GE a "bankruptcy waiting to happen."
Early Friday morning, GE CEO Larry Culp bought around 252,000 shares of GE at $7.92 a share for around $2 million total.
Culp's share purchase follows his statement from Thursday where he said, "GE will always take any allegation of financial misconduct seriously. But this is market manipulation - pure and simple."
Jeff Marks, senior portfolio analyst with Jim Cramer's Action Alerts PLUS charitable trust, broke down his thoughts on the report and what a Phillies game taught him about the back and forth between Markopolos and Culp.
"My first reaction to the news yesterday...I was very astonished to see something like this come out. Obviously, GE's has had its challenges, but to accuse...you know, to make this type of accusation and...Markopolos was very confident in his work as he should be. He's done some very important things," said Marks. "...You almost have to go side with the management on this situation because [Culp] put his money where his mouth is and investors agree with that."
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