Summary
General Electric Company (GE) announced on April 12, 2019, a definitive agreement to settle a previously disclosed investigation by the United States Department of Justice concerning potential violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). This settlement, which concludes an investigation into WMC Mortgage Corporation and its affiliates regarding residential mortgage loans originated, purchased, or sold between January 1, 2005, and December 31, 2007, involves a civil penalty payment of $1.5 billion. GE explicitly states it is not admitting any liability or wrongdoing in connection with this settlement. Importantly, the $1.5 billion penalty is consistent with a reserve previously recorded by the company in the first quarter of 2018, indicating that this financial impact was anticipated and has already been accounted for in prior financial reporting.
Key Highlights
- 1GE reached a definitive agreement with the U.S. Department of Justice to settle a FIRREA investigation.
- 2The settlement resolves an investigation related to WMC Mortgage Corporation and its affiliates.
- 3The period under investigation spans from January 1, 2005, to December 31, 2007, concerning residential mortgage loans.
- 4GE will pay a civil penalty of $1.5 billion.
- 5The $1.5 billion penalty is consistent with a reserve previously recorded in Q1 2018.
- 6GE is not admitting any liability or wrongdoing as part of the settlement.
- 7This settlement concludes the FIRREA investigation.