The US Securities and Exchange Commission is reviewing General Electric Co’s 2008 disclosures after ex-Treasury Secretary Henry Paulson said the firm told him at the peak of the financial crisis it struggled to sell debt.
“The SEC has requested information about our September 2008 statements,” GE spokeswoman Anne Eisele said yesterday, responding in an e-mail to questions from Bloomberg News. “We are fully cooperating with them and are entirely confident our disclosures were accurate.”
In his book “On the Brink: Inside the Race to Stop the Collapse of the Global Financial System,” Paulson says he discussed GE’s problems selling commercial paper with Chief Executive Officer Jeffrey Immelt during a phone call on September 8, 2008, and in person on September 15, the day Lehman Brothers Holdings Inc filed for bankruptcy. GE said in a September 14 memo to investors that its corporate debt programs “remain robust.”
The SEC is responsible for making sure companies adequately disclose material information to investors and has the authority to sanction firms for violations. SEC spokesman John Nester declined to comment.
Asked if he agreed with Paulson’s account of the conversations in September 2008, Immelt said he “does not believe they discussed having problems” with GE’s commercial paper, Eisele said in February.
Michele Davis, a spokeswoman for Paulson, in February referred to the author’s notes of his book, which cites his reliance on memory rather than transcripts or notes to write the account. Davis didn’t respond to an e-mail sent after normal business hours.
“Now here was Jeff telling me that GE was finding it very difficult to sell its commercial paper for any term longer than overnight,” Paulson writes in his book of the September 15 conversation. “The fact that the single-biggest issuer in this $1.8 trillion market was having trouble with its funding was startling.”
Fairfield, Connecticut-based GE, the world’s biggest maker of jet engines, power-plant turbines and medical-imaging equipment, reports earnings today.
