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SEC : GE To Pay $200 Mln Penalty For Disclosure Violation

General Electric Co. (GE) has agreed to pay a $200 million penalty to settle charges for disclosure failures in its power and insurance businesses, the U.S. Securities and Exchange Commission said in a statement.

In 2017 and 2018, GE's stock price fell almost 75% as challenges in its power and insurance businesses were disclosed to the public.

According to the SEC's order, GE misled investors by describing its GE Power profits without explaining that one-quarter of profits in 2016 and nearly half in the first three quarters of 2017 stemmed from reductions in its prior cost estimates.

The order also found that GE failed to inform investors that its reported increase in current industrial cash collections was coming at the expense of cash in future years and came primarily from internal receivable sales between GE Power and GE's financial services business, GE Capital.

The order found that from 2015 to 2017, GE lowered projected costs for claims against its long-term care insurance portfolio and failed to inform investors of the corresponding uncertainties resulting from lower estimates of future insurance liabilities at a time of rising costs from long-term health insurance claims.

The SEC's order found that GE violated the antifraud, reporting, disclosure controls, and accounting controls provisions of the securities laws.

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