The Securities and Exchange Commission’s staff has advised General Electric that it is considering legal action against the company for possible violations of securities laws, found during the agency’s investigation into the way GE accounted for costs associated with its now discontinued long-term care insurance business.
GE disclosed on Tuesday that it received a “Wells notice” last week from the SEC’s staff t that they may recommend the full commission bring a formal complaint soon.
The SEC has been investigating several accounting issues at the Boston-based company, including the discontinued insurance business and GE’s revenue recognition practices, particularly with regard to long-term service agreements.
This Wells notice specifically refers to an investor update in January 2018, in which GE revealed it would take a $6.2 billion charge and contribute up to $15 billion to reserves over a seven-year period for its North American Life & Health business. The insurer had