General Electric disclosed that on September 30, the Securities and Exchange Commission staff issued a “Wells notice” advising the company that it is considering recommending to the SEC that it bring a civil injunctive action against GE for possible violations of the securities laws.
GE has been informed that the issues the SEC staff may recommend that the SEC pursue relate to the historical premium deficiency testing for GE Capital’s run-off insurance operations, as well as GE’s disclosures relating to such run-off insurance operations, the company said in a regulatory filing. The staff has not made a preliminary decision whether to recommend any action with respect to the other matters under investigation, it added.
The Wells notice “allows GE the opportunity to provide its perspective and to address the issues raised by the SEC staff before any decision is made by the SEC on whether to authorize the commencement of an enforcement proceeding,” GE said. The company added, “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.” Shares of General Electric are down less than 1% to $6.40 following the disclosure.