GE’s stock takes a dive after disclosing receipt of ‘Wells notice’ from SEC staff

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Shares of General Electric Co. took a dive in afternoon trading Tuesday, after the industrial conglomerate disclosed that it received a “Wells notice” from the Securities and Exchange Commission related to an investigation into revenue recognition practices. The notice advises GE that the SEC staff is considering recommending a civil injunctive action against the company for possible violations of securities laws. The stock sank 3.2%, after being up about 1.6% just before the disclosure. The SEC’s investigation comes after GE shocked investors in January 2018 by saying it was taking a multibillion charge following a review of GE Capital’s insurance portfolio. The scope of the investigation was expanded after GE’s announcement in October 2018 of a goodwill impairment charge related to its power business. GE’s stock has tumbled 44.4% year to date, while the Dow Jones Industrial Average has slipped 0.9%.
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