, Columnist
Did We Mention GE's Reprieve Would Be Brief?
An SEC probe revealed on its earnings call is a reminder that more ugliness could be in store.
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General Electric Co.'s announcement that it's under investigation by the SEC isn't that surprising in the context of its rapid downward spiral. But it's an important reminder that the bad news is far from over.
The company disclosed on Wednesday that the regulator is looking into how it wound up having to pay $15 billion over seven years to shore up reserves for a legacy insurance business it has reviewed every year since winding it down between 2004 and 2006. More notably, the SEC is also looking into GE's revenue-recognition practices and the controls around its accounting for long-term service agreements throughout the company. That news wiped out earlier gains in GE shares after it affirmed 2018 guidance.