General Electric Securities Litigation, $362.5M Settlement Closed—Deadline Passed June 20, 2025
General Electric’s $362.5 million securities fraud settlement received final court approval on April 24, 2025, resolving claims the company concealed its reliance on intercompany factoring transactions to mask weakness in its power unit between 2016-2018. The claim deadline was June 20, 2025—which has now passed. Shareholders who purchased GE stock between February 29, 2016, and January 23, 2018, and filed valid claims by the deadline will receive payments once processing is complete. The settlement ranks among the top 100 private securities class action recoveries in US history.
What the General Electric Securities Litigation Alleged
Plaintiffs Sjunde AP-Fonden and The Cleveland Bakers and Teamsters Pension Fund accused GE of violating federal securities laws by making materially false and misleading statements about its financial health.
The Core Fraud Allegation:
GE’s power unit was struggling. To hide this weakness, the company allegedly used an accounting trick: selling receivables from long-term service agreements (LTSAs) to its own capital business, GE Capital, in exchange for immediate cash.
This intercompany factoring effectively robbed future cash flows to inflate present-day numbers—making GE Power look healthier than it was.
Plaintiffs argued GE concealed this unsustainable practice from investors. When the truth emerged through a series of disclosures in 2017 and 2018, GE’s stock price collapsed nearly 75%.
The Seven-Year Legal Battle
The litigation was sprawling and hard-fought:
November 1, 2017: Initial complaint filed after GE’s stock began declining
February 20, 2018: Plaintiffs filed expanded complaint with broader allegations and longer class period
July 2018-May 2022: Four additional amended complaints filed as plaintiffs refined their claims
August 29, 2019: Court granted partial motion to dismiss, narrowing the case
Class Certification: Court certified a class of all persons who purchased GE common stock between February 29, 2016, and January 23, 2018
November 25, 2024: Settlement reached and filed—less than one month before trial was set to begin
April 24, 2025: Judge Jesse Furman approved the $362.5 million settlement at final approval hearing
June 20, 2025: Claim filing deadline (now closed)
By the time of settlement, most claims had been dismissed. Only allegations related to GE’s factoring of LTSA receivables survived, with claims proceeding only against GE and former CFO Jeffrey S. Bornstein.
Understanding the Accounting Fraud: LTSA Factoring Explained
What Are LTSAs?
Long-term service agreements are contracts where GE agrees to maintain power equipment over many years. Revenue recognition on these contracts is complex and occurs over the contract’s duration.
The Factoring Scheme:
Instead of waiting for cash payments over time, GE Power sold these future receivables to GE Capital at a discount in exchange for immediate cash. This inflated GE Power’s present cash flow while reducing future cash—essentially borrowing from tomorrow to pay today.
Why It Matters:
Investors rely on cash flow statements to assess a company’s financial health. By using factoring without adequate disclosure, GE made its power unit appear financially stronger than it actually was.
When the practice proved unsustainable and the truth emerged, investors who bought stock at inflated prices suffered massive losses.
The SEC’s Parallel $200 Million Penalty
Separate from the class action, the Securities and Exchange Commission investigated GE’s disclosure failures and imposed a $200 million penalty in December 2020.
The SEC Found GE:
- Misled investors by describing GE Power profits without explaining that one-quarter of 2016 profits and nearly half of first three quarters 2017 profits stemmed from reductions in prior cost estimates
- Failed to disclose that its reported increase in industrial cash collections came at the expense of future years’ cash and primarily resulted from internal receivable sales between GE Power and GE Capital
- Lowered projected costs for long-term care insurance claims from 2015-2017 without informing investors of corresponding uncertainties, despite rising costs
The SEC established a Fair Fund with the $200 million penalty to compensate defrauded investors who purchased GE stock between October 16, 2015, and January 16, 2018. That claims deadline passed in October 2022.
Important: The SEC Fair Fund and the $362.5 million class action settlement were separate. Filing a claim for the SEC Fair Fund did not automatically qualify someone for this settlement.
Who Was Eligible for the $362.5 Million Settlement?
To qualify, investors needed to:
- Have purchased or acquired GE common stock between February 29, 2016, and January 23, 2018 (inclusive)
- Be damaged by the alleged securities fraud
- Not have previously requested exclusion from the class during class certification
- File a claim by June 20, 2025
Because the class was previously certified, there was no second opportunity to opt out in connection with the settlement. However, class members who previously excluded themselves during class certification had until April 3, 2025, to opt back in.
Recovery Amounts: What Class Members Will Receive
The estimated average recovery is approximately $0.05 per eligible share before deductions for attorneys’ fees and expenses.
The Payment Formula:
Recovery amounts depend on:
- Number of shares purchased or acquired
- Timing of purchases and sales
- When corrective disclosures occurred
Tiered Recovery Structure:
- Tier 1: Shares purchased during the class period and sold before the first corrective disclosure (April 21, 2017)
- Tier 2: Shares purchased during the class period and sold after the first corrective disclosure but before the end of the class period
Plaintiffs argued the settlement recovers 8%-36% of the $1-4.5 billion in potential recoverable damages—a significant recovery given the risks of prevailing at trial.
Settlement Terms and Distribution Timeline
Settlement Amount: $362,500,000 in cash
Final Approval: April 24, 2025, by Judge Jesse Furman
Claim Deadline: June 20, 2025 (closed)
Attorneys’ Fees: Class counsel was awarded nearly $70 million (approximately 19% of the settlement fund)
Litigation Expenses: Nearly $9.6 million awarded
Class Representative Awards: Sjunde AP-Fonden received nearly $23,000; Cleveland Bakers and Teamsters Pension Fund received almost $13,000
Payment Distribution: Claims are currently being processed. Eligible class members who filed valid claims by the deadline will receive payments via check or direct deposit once processing is complete. This typically takes several months after the claim deadline.
Why This Settlement Matters for Corporate America
The GE securities litigation represents a watershed moment for corporate disclosure obligations.
Key Precedents Established:
- Complexity Isn’t an Excuse: Companies can’t hide behind accounting complexity to avoid disclosure obligations
- Intercompany Transactions Need Disclosure: Moving money between corporate divisions to inflate metrics requires transparent disclosure to investors
- Cash Flow Manipulation Has Consequences: Borrowing from future periods to inflate present performance is securities fraud when inadequately disclosed
- Institutional Investors Hold Power: Swedish and Ohio pension funds led this case to a historic settlement, demonstrating institutional investors’ willingness to pursue complex litigation
Similar Cases: A Pattern of GE Accounting Issues
GE has a history of SEC enforcement actions:
2009 SEC Settlement – $50 Million: The SEC charged GE with accounting fraud for misrepresenting financial results. GE settled without admitting wrongdoing, paying $50 million.
2020 SEC Settlement – $200 Million: The SEC found GE misled investors about its power and insurance businesses from 2015-2017, leading to the Fair Fund discussed above.
2024 ERISA Settlement – $61 Million: Separately, GE paid $61 million in March 2024 to settle claims it violated fiduciary duties under federal retirement law by forcing workers into underperforming funds offered by GE’s own asset management subsidiary.
The pattern reveals persistent issues with GE’s financial reporting and corporate governance spanning multiple business lines and leadership teams.
What Legal Experts Say About the Case
“This settlement ranks as one of the top 100 private securities class action recoveries in the United States ever,” according to Institutional Shareholder Services analysis.
The settlement reflects the strength of plaintiffs’ surviving claims while acknowledging the risks of trial. By the time of settlement, Judge Furman had already narrowed the case substantially, dismissing most allegations and certain corrective disclosures.
Trial Risk Assessment:
Plaintiffs faced significant hurdles at trial:
- Proving scienter (fraudulent intent)
- Establishing loss causation (that alleged misstatements caused losses)
- Surviving expert testimony battles on damages calculations
The settlement avoided these risks while securing a substantial recovery for the class.
The Unusual Leadership Change Mid-Litigation
In a rare procedural move, the court removed the initially appointed lead plaintiff and lead counsel, replacing them with Sjunde AP-Fonden and The Cleveland Bakers and Teamsters Pension Fund.
This change occurred after these institutional investors intervened and moved to reopen the lead plaintiff appointment process. The court granted the motion, ultimately appointing the new plaintiffs to take charge.
This leadership change proved critical—the new lead plaintiffs drove the case to a successful settlement after years of vigorous litigation.
Implications for Securities Law Enforcement
The GE settlement reinforces several securities law principles:
Section 10(b) and Rule 10b-5 Standards: Companies must disclose material information that affects investors’ decision-making. Omissions of material facts can constitute securities fraud even without affirmative lies.
Materiality Standard: Information is material if there’s a substantial likelihood a reasonable investor would consider it important. GE’s factoring practices clearly met this standard—evidenced by the 75% stock price collapse when disclosed.
Loss Causation: Plaintiffs must prove alleged misstatements caused their losses. The corrective disclosure framework helped establish this element—when truth emerged, the stock price fell.
Control Person Liability: Former CFO Bornstein faced claims under Section 20(a) as a control person. This demonstrates executives can face personal liability for corporate disclosure failures.
Frequently Asked Questions
Q: The deadline passed—can I still file a claim?
No. The June 20, 2025 deadline has passed. Only class members who submitted valid claims by that date will receive payments.
Q: I filed a claim. When will I receive payment?
Claims processing takes several months. The settlement administrator must verify all claims, calculate pro rata distributions, and issue payments. Class members who filed valid claims should expect payment in late 2025 or early 2026.
Q: I filed a claim for the SEC Fair Fund in 2022. Will I receive this settlement payment too?
Only if you also filed a separate claim for this settlement by June 20, 2025. The SEC Fair Fund and this class action settlement were completely separate.
Q: What if I sold my GE stock before the class period ended?
If you purchased during the class period (February 29, 2016 – January 23, 2018) and filed a valid claim, you may still receive payment. Your recovery amount depends on when you sold relative to corrective disclosures.
Q: Will I definitely receive $0.05 per share?
The $0.05 per share is an estimate before deductions for fees and expenses. Actual amounts depend on the total number of valid claims filed and your specific purchase/sale timing.
Q: Does GE admit wrongdoing?
No. Like most securities settlements, GE resolved the claims without admitting or denying the allegations.
Q: What happened to CFO Jeffrey Bornstein?
Bornstein left GE in 2018. He was a named defendant but, like GE, resolved the claims without admitting wrongdoing through the settlement.
Q: Could there be more GE securities litigation?
The Justice Department was separately investigating GE’s insurance and power businesses. The status of that investigation is not public.
Q: What reforms did GE implement?
GE stated it has “significantly enhanced disclosures and internal controls” under current leadership. The SEC settlement included a one-year reporting requirement on certain accounting and disclosure controls.
Q: Can I still opt out of the settlement?
No. The class was certified earlier, and class members had an opportunity then to request exclusion. There was no second opt-out opportunity in connection with the settlement.
The Collapse of a Corporate Giant
GE’s troubles extended far beyond securities fraud. The company that Thomas Edison founded and Jack Welch built into a conglomerate empire nearly collapsed under the weight of bad decisions, hidden liabilities, and accounting irregularities.
The Timeline of Decline:
- 2017-2018: Stock price fell 75% as power and insurance problems emerged
- January 2018: $6.2 billion loss reported in long-term care insurance portfolio
- 2018-2020: GE forced to dismantle its empire, selling divisions to pay down debt
- 2021: GE announced plan to split into three separate companies
The securities litigation captures a moment when investors finally learned the truth about GE’s financial condition—truth the company allegedly concealed for years through questionable accounting practices.
What Happens Next for Class Members
If you filed a valid claim by the June 20, 2025 deadline:
- Wait for Claims Processing: The settlement administrator (JND Legal Administration) is verifying all claims and calculating distributions
- Watch for Payment Notices: You’ll receive notification when your claim is approved and payment is issued
- Expect Payment Late 2025/Early 2026: Large class actions take time to distribute. Be patient.
- Update Your Address: If you’ve moved since filing, contact the settlement administrator at 1-844-202-9485 or [email protected]
If you did not file a claim by the deadline, you will not receive payment from this settlement.
Contact Information for Questions
Settlement Administrator: General Electric Securities Litigation c/o JND Legal Administration P.O. Box 91449 Seattle, WA 98111
Toll-Free: 1-844-202-9485 Email: [email protected] Website: www.GeneralElectricSecuritiesLitigation.com
This article provides general information about the General Electric securities litigation settlement. For specific legal or investment advice, consult appropriate professionals. Information is current as of December 24, 2025.
Case Name: Sjunde AP-Fonden, et al. v. General Electric Co., et al.
Case Number: No. 17 Civ 8457 (JMF) (GWG)
Court: United States District Court for the Southern District of New York
Judge: Hon. Jesse M. Furman
About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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