Receiving a “Wells notice” from the Securities and Exchange Commission is never deemed to be comforting news for shareholders. In the case of General Electric Company (NYSE: GE), there seem to be many ongoing questions from operations and accounting that just refuse to go away. These issues are not new, and there are legacy issues that the new GE leadership team have been trying to get right.

Shares of GE fell on Tuesday afternoon after an SEC filing disclosed that the SEC issued a “Wells notice” on September 30, 2020. That notice advised the conglomerate that it is considering recommending that the SEC bring a civil injunctive action against GE, noting possible violations of securities laws.

GE also noted that it was informed that the issues at hand relate to the historical premium deficiency testing for GE Capital’s run-off insurance operations, and they also pertain GE’s disclosures surrounding those run-off insurance operations.

While it is little surprise that the “Wells notice” sent shares lower, some of the information and observations surrounding this topic are not new at all. GE had already reported that the SEC had notified GE that it was investigating GE’s revenue recognition practices and internal controls over financial reporting which were related to long-term service agreements.

Ge also disclosed back in January of 2018 in an investor update that it was increasing future policy benefit reserves for GE Capital’s run-off insurance operations. The SEC expanded the scope of the investigation to the reserve increase and the process leading to the reserve increase. Tuesday’s filing said:

Following GE’s announcement in October 2018 about the expected non-cash goodwill impairment charge related to GE’s Power business, the SEC expanded the scope of its investigation to include that charge as well. We are providing documents and other information requested by the SEC staff, and we are cooperating with the ongoing investigation.

As for what this means for GE and its shareholders, that will not be known until a future time. The SEC filing specified that the SEC has not made a preliminary decision whether to recommend any actions regarding other matters under investigation.

One issue that is perhaps more important than any issue here is that in many aspects this “Wells notice” may be lumped into a legacy issue category.

It was not even until October 1, 2018 that John Culp was named Chairman and CEO of General Electric. Many of the issues that resulted in the chronic accounting issues were there for years and years before his arrival to lead GE.

It was also not until earlier in 2020 that GE announced that Deloitte & Touche would take over as the conglomerate’s auditor after KPMG signs off on GE’s 2020 financial statements. KPMG had been GE’s auditor for more than 100 years and KPMG had not prevented accounting troubles in recent years.

Another issue that should probably be considered is that GE also named Carolina Dybeck Happe as its new Chief Financial Officer late in 2019 and that role to replace Jamie Miller as CFO started in 2020. She had previously been CFO of shipping giant A.P. Moller-Maersk prior to taking on this task at GE.

Even more recently, GE has talked about cash flow stabilization in recent weeks, and that was shortly after one prominent analyst went so far as to say that GE’s stock could be nearly worthless.

A “Wells notice” is not a formal allegation and it is not a finding of wrongdoing. GE will be allowed to offer its perspective and will be allowed to address specific issues before any decision is made by the SEC. GE’s filing also noted that the company is not in agreement:

GE disagrees with the SEC staff with respect to this recommendation and will provide a response through the Wells notice process. If the SEC were to authorize an action against GE, it could seek an injunction against future violations of provisions of the federal securities laws, the imposition of civil monetary penalties, and other relief within the Commission’s authority. The results of the Wells notice and any enforcement action are unknown at this time.

GE’s stock was last seen trading down about 4% at $6.16 on Tuesday ahead of the close. Its 52-week trading range is $5.48 to $13.26 and its Refinitiv consensus analyst price target was last seen at $7.90.

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