Class Action Claims GE Misled Investors Concerning Company’s Financial Performance

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General Electric Company (GE) and four current or former executives are facing a securities lawsuit that claims they failed to disclose material information to investors about the company’s financial performance and caused them to suffer injury when stock prices declined. Between December 15, 2016 and November 10, 2017, the lawsuit alleges, the defendants hid the following information from the public:

• that GE’s Power and Oil & Gas segments were underperforming company projections;
• that GE Capital cash reserves were not sufficient to cover claims under its long-term care (LTC) insurance policies; and
• that GE’s ability to maintain cash flow for its quarterly dividend payments was a result of its “under-reserving” for LTC insurance liabilities;

The suit claims that as a result of these alleged missteps, the company overstated its earnings and cash flows between December 2016 and November 2017. Thus, when the negative results were reported, the complaint alleges, stock prices dropped and investors suffered financial injury.