General Electric’s stock briefly fell below $14 in Monday trading as investors reacted to news late Friday which the U.S. Justice Department could take action in connection with alleged subprime mortgage violations.
which update, which was made in a filing with the Securities as well as also also Exchange Commission, also provided details about the expected restatement of its 2016 as well as also also 2017 financial results. Based on This kind of information, some suspect the idea will be very difficult for GE to reach its 2018 forecast.
The company, which can be within the midst of a restructuring effort, also nominated three fresh directors, as the idea looks to downsize its board.
Shares of the company were recently trading down 2.5 percent, after sinking as low as $13.95, a level not seen since July 2010, when GE shares hit $13.81.
“We’re still not seeing a bottom yet here on the stock,” RBC Capital Markets analyst Deane Dray told CNBC’s “Power Lunch.”
The update about the Justice Department investigation emerged in a regulatory filing, where GE said the company faces allegations which its GE Capital unit, as well as also also its right now defunct WMC Mortgage business, violated U.S. law in connection with subprime mortgages.
The department “can be likely to assert” violation of financial regulatory law, GE said within the filing, due to “WMC’s origination as well as also also sale of subprime mortgage loans in 2006 as well as also also 2007.” The company, which sold WMC in 2007, said the warning about potential Justice action includes the outcomes via investigations of some other financial firms.
GE had set aside $626 million in reserves to pay claims filed against WMC, according to Deutsche Bank. However, the reserves have declined to $416 million, as well as also also the latest filing means GE may be on the hook for even more, said Deutsche Bank, noting the Justice Department “has fined financial institutions tens of billions” for taking part within the mortgage crisis of 2008.