While the US markets closed relatively flat today, which is not a big surprise given that yesterday was the worst day for the DOW losing 800 points; there was however, some very interesting and frightening news surrounding General Electric, GE. This is a household name and today a report was released by an external whistleblower claiming that GE has been committing financial fraud. The whistleblower, Harry Markopolos, came to notoriety during the Great Recession when he blew the whistle on Bernie Madoff and his $50 billion Ponzi scheme. Markopolos and his forensic team can make money on their research by bringing the case before the SEC and the DOJ. Should these agencies move forward and are awarded damages/levy fines and penalties, then Markopolos and his team will earn a percentage of those fines. It is also important to note that Markopolos is also involved with an undisclosed hedge fund that has a short position in GE’s stock. The hedge fund is set to pay Markopolos and his team a percentage of the trade if it proves profitable. According to the whistleblower, the funding for his research has been internally financed and is not from the hedge fund. There are a few disturbing claims made by Markopolos, 1) that this is bigger than Enron and WorldCom combined, 2) that his team has uncovered a few “smoking guns,” and 3) that given the history of other major financial fraud allegations, that once it’s made public, companies such as Enron and WorldCom file for bankruptcy within four months, and Markopols claims that this is the next chapter for GE. Therefore, GE could potentially file for bankruptcy by the end of this year. Of course these are allegations, but the seriousness of them should not be diluted. Should GE file for bankruptcy, this very well may serve as the catalyst for the next major recession. Confidence and liquidity will seize up and a downward self-feeding and self-fulfilling cycle will ensue. Stay diversified, stay vigilant, and stay with The Kapital News. #Fraud #Recession #Economy #WakeUpAmerica #Stocks #Investing