Madoff whistleblower claims 'decades long accounting fraud' by GE

General Electric is denying a report from a whistleblower who accuses the company of accounting fraud in a case "far more serious" than Enron.

Harry Markopolos, the expert who uncovered Bernie Madoff's Ponzi scheme, accuses GE of fraud in a lengthy report published Thursday, as reported by The Wall Street Journal. In it, he claims the company's "cash situation is far worse than disclosed" and that it "ended the year" in 2018 "with minus $20 billion in working capital."

The report goes on to claim GE has been "running a decades long accounting fraud by only providing top line revenue and bottom line profits for its business units and getting away with leaving out cost of goods sold, SG&A, R&D, and corporate overhead allocations," CNBC reports. GE changed the reporting format of its financial statements every few years, the report also claims, either due to incompetence or in a deliberate attempt to conceal $38 billion in accounting fraud; that would be 40 percent of the company's market capitalization.

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General Electric has denied the report, with CEO H. Lawrence Culp Jr. calling it "market manipulation — pure and simple" on Thursday. Culp went on to say the report "contains false statements of fact," and he accused Markopolos of being interested "solely in generating downward volatility in GE stock so that he and his undisclosed hedge fund partner can personally profit." Per the Journal, Markopolos is "working with an undisclosed hedge fund, which is betting GE's share price will decline." GE shares fell 11 percent on Thursday following the report's release, per CNBC.

Markopolos in the report says his allegations are based on seven months worth of analysis but that "we believe the $38 billion in fraud we've come across is merely the tip of the iceberg."