General Electric allegedly misled investors, according to lawsuit
GE was accused of deceiving its
investors in regards to
the financial status of the company.
Businesses must closely monitor dealings with investors. It is better to maintain an open and honest relationship with investors than risk a lawsuit. This is especially important in regards to the financial status of the company. If a business owner or CEO misleads its investors about the company's finances, it is possible that a lawsuit will be filed against them, in which case, a Chicago litigation lawyer can help the company get back on track.
Chief executive Jeffrey Immelt of General Electric (GE) was accused of deceiving investors in regards to the financial status of the company as well as its contact with risky debt during the 2008 financial crisis, according to the Huffington Post. GE sought to get this lawsuit dismissed, but, last January, a federal judge kept this suit in proceedings.
U.S. District Judge Richard Holwell from Manhattan has retained litigation that may hold the company accountable for investor losses over a six-month period when its stock price fell from $26 to $10, which caused GE's overall market value to drop steeply by more than $150 billion.
"Immelt's [chief executive Jeffrey Immelt] categorical statements that investors could 'count on' a dividend and that GE was having 'no difficulties' issuing commercial paper are not the sort of cautious statements one would expect of a CEO attempting to come to grips with the effects of the economic crisis on his company," Holwell wrote in court papers.
Investors allege that GE took part in withholding information about its financial instability, which includes its association with subprime and other low-quality loans.
In Chicago, businesses looking for legal assistance in dealing with investor complaints should speak to a business lawyer with an aim to achieve the highest degree of success for his or her clients.