An accounting expert who raised red flags about Bernie Madoff’s Ponzi scheme has a new target: General Electric Co., the Wall Street Journal reported. In a research report posted today, Harry Markopolos alleges that the struggling conglomerate has masked the depths of its problems, resulting in inaccurate and fraudulent financial filings with regulators. Markopolos said that his group found GE’s insurance unit will need to bolster its reserves by $18.5 billion in cash and faulted the way the company is accounting for its oil-and-gas business. All told, he said, the accounting problems amount to $38 billion, or 40 percent of the conglomerate’s market value. The group’s research indicates that GE is short on working capital — a key measure of liquidity — and that its cash situation is far worse than disclosed in its regulatory filings. GE said it hasn’t been contacted by Markopolos and that the group’s report was produced to help short sellers profit by creating volatility in GE’s shares.
