GE Settles Shareholder Lawsuit for Forty Million

General Electric has agreed to settle a shareholder lawsuit that was filed by investors, who alleged that the company lied about its financial health during the 2008 financial crisis. The company has agreed to pay $40 million to settle the allegations.

In the lawsuit filed by shareholders, the investors accused both General Electric Co. and its Chief Executive Jeffrey Immelt of lying about the company’s financial health. The lawsuit accused the company of hiding billions of dollars of bad assets from investors, and inflating the values of assets during the financial crisis. The company also inflated the value of risky loans including subprime loans at its GE Capital unit.

The lawsuit accused General Electric of misleading financial investors about the company’s financial health, and exposing the company to unnecessary risk from debt during the worst of the financial crisis of 2008. The lawsuit also accused General Electric of lying to consumers about the company’s ability to generate earnings and pay a dividend.

The lawsuit had been filed by the State University Retirement System of Illinois, which sought damages on behalf of shareholders and investors who held General Electric shares between 2008 and 2009. In 2009, the company lost its Standard and Poor AAA credit-rating. During that period of time, General Electric’s shares fell by up to 77%, and on March 4, 2009, the company’s shares were trading at $5.87. During this time, the company lost as much as $200 billion of its market value. The final settlement has not yet been approved.

California shareholder dispute lawyers have seen several companies facing shareholder lawsuits like this, for their activities during the 2008 financial crisis.

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