NEW YORK, Jan. 18, 2018 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against General Electric Company (“GE” or the “Company”) (NYSE:GE) and certain of its officers. The class action, filed in United States District Court, for the District of Connecticut, and docketed under 18-cv-00106, is on behalf of a class consisting of investors who purchased or otherwise acquired the securities of GE between February 26, 2013 and January 12, 2018, both dates inclusive (the “Class Period”). Plaintiff seeks to recover compensable damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased GE securities between February 26, 2013, and January 12, 2018, both dates inclusive, you have until March 19, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and quantity of shares purchased.
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GE is a globally diversified technology and financial services company. GE offers a wide variety of products and services including aircraft engines, power generation, and water processing and household appliances. GE Capital is GE’s financial services unit. It provides commercial lending and leasing, as well as a range of financial services for commercial aviation, energy, and support for GE’s industrial business units.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) GE was failing to allocate sufficient reserves with respect to premium deficiencies and other risks associated with GE Capital’s legacy reinsurance business; (ii) these risks were then accruing billions of dollars in unreported impairment charges for GE; (iii) consequently, the value of GE was overstated during the Class Period, and additional undisclosed impairments were necessary; and (iv) as a result of the foregoing, GE’s public statements were materially false and misleading at all relevant times.
On July 21, 2017, GE’s then-CFO Jeffrey S. Bornstein advised investors, in advance of GE’s annual cash flow test of GE Capital’s run-off insurance business, that “[w]e recently have had adverse claims experience in a portion of our long-term care portfolio and we will assess the adequacy of our premium returns.”
Following this news, GE’s share price fell $0.78, or 2.92%, to close at $25.91 on July 21, 2017.
Three months later, on October 20, 2017, Bornstein again addressed the adequacy of premium returns in GE Capital’s insurance business, advising investors that GE “recently observed elevated claims experience for a portion of the long-term care book at GE Capital’s legacy insurance business” and “began a comprehensive review in the third quarter of premium deficiency assumptions that are used in the annual claim reserve adequacy test.”
Following Bornstein’s statements, GE’s share price fell as much as $1.48, or 6.28%, to a low of $22.10 during intraday trading on October 20, 2017. However, comments by GE CEO John Flannery muted the effect of this partial revelation, as Flannery assured investors that he was concluding an “exhaustive” review of GE’s business and that there were “no sacred cows” at GE. On Flannery’s comments, GE’s share price rose $0.25, or 1.06%, to close at $23.83 on October 20, 2017.
On January 16, 2018, GE announced that “the comprehensive review and reserve testing for GE Capital’s run-off insurance portfolio, North American Life & Health (NALH), will result in an after-tax GAAP charge of $6.2 billion for the fourth quarter of 2017.” GE further advised investors that “GE Capital expects to make statutory reserve contributions of ~$15 billion over seven years” and will suspend its dividend to GE for the “foreseeable future.”
That same day, on a conference call with investors and analysts, CEO Flannery stated, in part, that “[c]learly, in hindsight, we underappreciated the risk in [GE’s insurance business] book” and that GE was “looking aggressively at the best structure or structures for our portfolio to maximize the potential of our businesses,” which “could result in many, many different permutations, including separately traded assets really in any one of our units, if that’s what made sense.”
On this news, GE’s share price fell $1.43, or 7.62%, over the following two trading sessions, to close at $17.33 on January 17, 2018.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby