Tuesday, June 21, 2005
For those of us who were less-than-stellar athletes, it was always tough waiting to be picked for the playground game. Maybe General Electric felt the same way -- although I doubt it -- when the U.S. Attorney's Office for the Southern District of New York began doling out subpoenas as part of its grand jury investigation into finite insurance agreements. GE joined the team when it announced (press release here) that it had received a subpoena just like some other players (see earlier post here about St. Paul Travelers and Ace Ltd. disclosures last week). The announcement contains an interesting sentence: "The subpoena is general in nature." I'm not sure I've ever heard that description before, and I'm not sure what it means except, of course, to imply that GE is not a target or subject of the investigation, which is may not be at this point. One complaint about grand jury (and SEC) subpoenas is that they are overly broad, seeking truckloads of documents. Saying that one is "general in nature" does not shed much light on the situation, but it probably means that the government is seeking a broad range of documents without specifying particular transactions that would indicate possible criminal conduct.
With GE on the team, look for its recently spun-off insurance unit, now known as Genworth Financial, to be among the next players selected to disclose receiving a grand jury subpoena. Like GE (and many other insurance companies), Genworth received an SEC subpoena on the same transactions (see company press release here). (ph)