General Electric may become a more reliable investment
On Thursday, a federal judge in Manhattan partially dismissed a lawsuit by investors in General Electric Co. Investors accused GE of concealing $24 billion in insurance liabilities.
The company wins partial dismissal of shareholder lawsuit
Stocks impacted: General Electric Co (GE)
At that, the judge granted the shareholders permission to amend their complaint. As a reminder, the class-action lawsuit was filed in November 2017 and consolidates six cases that sought to hold General Electric accountable for falling profits in recent years. The lawsuit alleges the company’s executives understated its exposure to long-term care insurance risks and risks related to its service agreements with customers that bought power plant equipment from GE. In turn, GE denied using fraudulent accounting to hide falling sales and profits at its power unit and said the suit failed to point out specific information it should have provided that a reasonable investor would need to avoid being misled. As the public relations scandal has been fading, the GE stock could regain its appeal for investors. On Thursday, the company’s shares rose over 2% and could extend gains today.
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