SEC puts GE's derivatives use under formal scrutiny

The Securities and Exchange Commission (SEC) has started a formal investigation into General Electric's use of derivatives.

According to GE, the US regulator issued a formal order of investigation in August, allowing it to compel GE to hand over relevant documents.

The original financial misstatements, which GE announced in May, meant that its earnings since 2001 had to be revised upward by a total of $381 million over that period.

Failure to correctly account for derivative-related fees on a number of interest rate and currency swaps, alongside other errors were responsible for the misstatement, GE said.

The SEC had been informally investigating GE's use of derivatives since January.

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