Henry Paulson, Treasury Secretary under George W. Bush, has written a new book in which he details, among many other topics, how General Electric's Jeff Immelt came to him, Paulson, in desperation--desperately seeking a bailout, after the mismanagement of GE Capital.
As reported by Jeff Gerth, the legendary investigative digger who spent many years at The New York Times, and who now seems to be splitting his time between The Washington Post, and that new indy investigative startup, Pro Publica, it sure seems clear enough, what Paulson is saying.
But there's a problem: GE is being sued by angry shareholders, who allege that GE was misleading them during the meltdown. Immelt was saying publicly that everything was fine, while privately he was begging Paulson for a bailout. In some circles--including legal circles--that's known as false witness.
Here's the meat of Gerth's account:
If correct, the portrayals in Paulson's book, "On the Brink: Inside the Race to Stop the Collapse of the Global Financial System," could spell trouble for GE in court, where shareholders are accusing Immelt and other executives in civil suits of violating securities laws by misleading investors in fall 2008 about GE's finances and withholding key information.
Immelt and other defendants have denied the claims, filed in federal court in New York City, and are seeking dismissal. But a leading securities expert said Paulson's book could complicate the litigation.
"Assuming that what is in the book is accurate," said Donald C. Langevoort, the Thomas Aquinas Reynolds Professor of Law at Georgetown University, "it offers new facts that any judge would have to take very seriously in considering whether to allow a suit alleging violations of the securities laws to go forward."
So again, how will NBC, CNBC, and MSNBC--all GE properties, at least until the Comcast deal goes through--cover this story?
