WASHINGTON, Nov. 30 (Xinhua) -- Former staffers of General Electric Company (GE) have told federal investigators during an ongoing probe that their ex-employer ignored risks in its legacy insurance business that led to accounting problems last year, according to U.S. media reports.
The Wall Street Journal reported Friday that several former GE employees told investigators from U.S. Securities and Exchange Commission (SEC), which has been probing the case, that "lax managerial oversight and buried risks" ultimately kept the company from booking bigger reserves.
One of the former employees told SEC officials that GE senior executives in the insurance division were changing numbers and their methodology without providing supporting evidence, the WSJ said.
GE disclosed in January that it would book a 6.2-billion-dollar charge in its fourth quarter related to its insurance operations and needed to set aside 15 billion dollars over seven years to bolster insurance reserves for long-term-care policies at its GE Capital unit.
The claim triggered an SEC investigation in February into the company's possible miscalculations that resulted in the aforementioned amount. Besides, the SEC and the Department of Justice have since November 2017 been looking into possible accounting mishandling behind the company's 22-billion-dollar write-off in the power division.
These legal processes have led to a meltdown in GE's shares, now trading at 7.5 dollars per share, the lowest in years. The company was also removed from the Dow Jones Industrial Average in June.
A GE spokeswoman declined to comment on these proceeding legal matters, adding that the company is "exploring every option to manage and mitigate risk" from the insurance business.
"We've recently brought in new seasoned leaders with deep and diverse backgrounds to manage through the complexities," the spokeswoman was cited by the WSJ as saying.
