A Securities and Exchange Commission investigation called into question the oversight of GE leadership, after a $15 billion shortfall in insurance reserves the company discloses.
“It sure seems that previous management had a rosy view,” said Scott Davis, an analyst with Melius Research in New York. “There seemed to be no effort on their part to get ahead of the liability. I find it very hard to believe that mysteriously overnight GE found problems they didn’t know existed.”
In 2004, GE spun out an insurance unit, Genworth Financial Inc., through a stock offering. The move was important to the parent company. It helped eliminate one of the biggest drags on GE’s earnings.Chicago Tribune