B4| Friday, August 16, 2019 THE WALL STREET JOURNAL.
TECHNOLOGY WSJ.com/Tech
policies have proved to be a
problem for many insurers.
“We believe that our current
reserves are well-supported for
our portfolio characteristics,
and we undertake rigorous re-
serve adequacy testing every
year,” GE said.
Mr. McPherson said the group
found issues with GE’s long-
term-care insurance by review-
ing state documents that require
different accounting than corpo-
rate statements.
The report says that policy
premiums paid to GE are low
compared with what rivals typi-
cally receive and that GE isn’t
receiving any premiums at all
on more than a quarter of poli-
cies, because those contracts
are considered paid in full. The
group says that, even after the
$15 billion boost, GE’s reserves
are well below what would be
expected for such a troubled
group of policies.
GE in the early years front-
loaded gains from the long-
term-care business by collect-
ing premiums when
policyholders were young, the
group says, but failed to prop-
erly record reserves as the cov-
ered population aged and
claims ran at higher levels than
originally expected.
In March, GE executives
hosted a conference call to as-
sure investors they had a han-
dle on the insurance business.
GE said it planned to push to
raise premiums and shift invest-ments to boost returns and that
it had adequate reserves to
cover expected claims.
The Markopolos group also
alleges that GE’s ownership of
oil-and-gas business Baker
Hughes isn’t being properly ac-
counted for and that the com-
pany should have booked about
$9 billion of losses on the in-
vestment. Last year GE recorded
a $2.2 billion loss on the sale of
part of its Baker Hughes stake,
reducing its ownership from
62.5% to 50.2%.
GE has disclosed that selling
below 50% will trigger it to
stop reporting Baker Hughes’s
financial results as part of its
own results, and record its loss
on the rest of its investment.
GE said its paper loss on the re-
maining investment was about
$7.4 billion as of July 24.
Mr. Markopolos said that the
Baker Hughes stake is now
“strictly an investment” and
that GE as of 2018 has been im-
properly holding back from re-
cording the loss. GE should be
simply recording the value of
its investment in the company,
Mr. Markopolos said, a change
he said could strain GE debt
agreements.
GE said that as a majority
shareholder of Baker Hughes, it
is required to report consoli-
dated results for the firm and
that it is providing more trans-
parent reporting by including
Baker Hughes’s revenue and
costs and assets and liabilities.Harry Markopolos warned the SEC about the Madoff scheme.MICHAEL BUCHER/THE WALL STREET JOURNALWhether you’re meeting at a
Taylor Swift concert or a wa-
ter park, the apps are great
at pinpointing your outdoor
location. Indoor locations are
tougher.
Find My Friends and
Google Maps let you limit
how long you share your loca-
tion. For instance, I was meet-
ing a friend in the city, so I
decided to share my locationassets.” The company said it
ended the second quarter with
$16.9 billion of cash at its in-
dustrial business.
The Boston-based investor-
turned-investigator warned the
Securities and Exchange Com-
mission about the Madoff in-
vestment scheme years before it
became public but was ignored.
In a more recent campaign, Mr.
Markopolos helped expose a for-
eign-currency trading scandal at
several banks. He has helped
spawn a cash-for-tips whistle-
blower industry.
GE is already under investiga-
tion by the SEC and Justice De-
partment for potential account-
ing issues that have come to
light in the past two years re-
lated to its insurance holdings
and problems in its power divi-
sion. The company has denied
accounting fraud in response to
lawsuits and said it is cooperat-
ing with investigators.
The Markopolos group said
it plans to present its report to
the SEC and meet with federal
prosecutors and investigators.
In the report, the group says
some information will be given
exclusively to law enforcement.
An SEC spokesman declined to
comment.
After two difficult years, GE
has shown signs of stabilityand
recently nudged higher its fi-
nancial guidance for the first
time in years.
The Markopolos group in-
cludes John McPherson, co-
founder of MMS Advisors, foren-
sic accountants specializing in
the insurance industry.
The group says GE’s long-
term-care insurance holdings
are a bigger liability than the
company says. The report esti-
mates GE will need to boost its
insurance reserves by $18.5 bil-
lion and take a $10.5billion
charge because of an accounting
change required by 2021.
Those figures are on top of a
$15 billion reserve boost al-
ready taken by GE over seven
years to cover its exposure to
long-term-care policies, which
cover expenses like nursing
homes and assisted living. TheContinued from page B1Madoff
Critic Aims
At GE
PERSONAL TECHNOLOGY|By Joanna Stern
Tracking Your Friends Is Creepy, but Also Helpful
It’s 10 p.m.
and I know ex-
actly where
my family is—
or at least
where they’re
plotted on a map. My sister is
safely in the kitchen of her
house. My wife? Turning the
southwest corner of the park
walking the dog. My father is
in the...lake? Technical glitch.
Phew! He’s on the deck.
Welcome to the world of
location-sharing apps. These
services, like Apple’s Find My
Friends or Google Maps loca-
tion sharing, plot your
phone’s real-time where-
abouts on a map visible to
whomever you choose.
Creepy? Sure is! Yet also com-
forting, at least sometimes.
These services are most
popular with parents looking
to keep tabs on their tweens
or teenagers. Life360, one of
the most popular apps for
families, has more than 23
million monthly active users.
Mikalia McLane works in
emergency services in Seattle
and tracks 60 friends and
family members with Find My
Friends on her iPhone. “With
my job, I know emergency
info before it is released. On a
Friday night, if I know there is
a shooting in a bar scene area,
I will check to make sure none
of my friends are in the area,”
she told me. “I can’t give
them any info, but I can tell
them to not go to that area.”
Jon Kasbe, a traveling film-
maker, follows nearly 100 peo-
ple around the world. When
Jon first showed me his popu-
lated app a few weeks ago, I
was entirely creeped out. Then
I tried it myself, with five im-
portant people in my life.
I quickly saw the appeal—
and the danger. What oc-
curred while testing Apple’s
Find My Friends, Google
Maps location sharing and
Life360 is what I call the
Great Location-Sharing De-
bate: Each legitimate, socially
rewarding reason to use them
is met with a privacy or anxi-
ety-inducing worry. And while
there’s reason to use these for
safety, they won’t give you
the full picture in emergency
situations.
Point 1: They’re good for
meeting up.
Say goodbye to the annoy-
ing meetup text-message
chain: “I’ll be there in five
min.” “I’m standing by the
green and white sign—not
the white and green sign!”for just an hour.
Find My Friends offers
sharing for an hour or until
the end of the day. (You can
easily access this right from
your iPhone’s Messages win-
dow, too. Tap the contact at
the top, then Info, then Share
My Location.) Google lets you
share for a specific number of
hours or days. Targeted at
families, Life360 doesn’t have
limited-time options. You can
stop sharing your location at
any time in any of these apps.
Counterpoint:We’re
freaked out when tech compa-
nies track and leak our loca-
tion data. These apps give us
a lot of control when it comes
to location sharing with oth-
ers, but don’t forget your con-
stant stream of location data
also goes to the app’s makers.
My most important privacy
findings: Apple is the best
choice. The company collects
the smallest amount of info,
storing your location for only
two hours on its own servers.
Google, on the other hand, re-
quires you turn on Location
History, a setting that collects
and stores all your location
data until you delete it.
Life360, similarly, requires
some serious data collection.
Point 2: They’re good for
easing your anxiety.
When you share your loca-
tion indefinitely—that is,
24/7—it opens up another
level of information.
Bryan Siegel of Riverside,
Calif., gets notifications
through Find My Friends ev-
ery day when his 14-year-old
daughter and 12-year-old son
leave school and walk home.
“One day I realized my daugh-
ter stopped walking. I called
her and she told me the po-
lice are at the corner and that
some guy tried to abduct a
girl from school. I immedi-
ately went over there,” Mr.
Siegel said.
Many teens and 20-some-
things track friends to make
sure they get home safely.
Counterpoint:I joked
about that Find My Friends
glitch that dumped my dad inthe lake, but when I first saw
it, I worried he was in a boat-
ing accident. (When you open
Find My Friends, the app can
take a few seconds to replot
the person’s whereabouts.)
When the tech doesn’t work
right or when people say one
thing but their location says
another, anxiety follows.
There’s also the argument
that we’re giving up our en-
tire sense of personal privacy
for slight peace of mind.
Point 3: They’re good for
emergency situations.
When Lauren Goodman, 19,
heard about the shooting at a
Walmart in El Paso earlier this
month, the University of Texas
at Austin sophomore immedi-
ately pulled up Find My
Friends to make sure none of
her loved ones were there. “I
was relieved when I saw they
were back at home,” she said.
Many parents also opt to
use these features when their
children start to drive.
Life360, specifically, can de-
tect crashes and report other
driving situations. When the
app is open, Life360 refreshes
location about every three
seconds. When open, Find My
Friends refreshes every min-
ute, though when iOS 13
comes out this fall—and the
app is renamed simply Find
My—refresh will drop to 30
seconds. In Google Maps, lo-
cation is refreshed only when
you view a friend’s location.
Counterpoint:In an age
of mass shootings, you’d
likely want more info than
just where someone is when
news reports hit. Something
I wish these apps had is a
way to quickly alert those
who follow you that you’re
OK. Apple gets halfway there
with SOS. The feature sends
automatic text messages
containing your location to
your emergency contacts
whenever you make an
emergency SOS call. Google
Maps has a crisis alert fea-
ture. If there is an emer-
gency near you, a card might
pop up, letting you share
your location with others.New York-based actor Aldo Uribe helped out with testing the apps.JOANNA STERN/THE WALL STREET JOURNALNvidia Corp. reported a
third consecutive quarter of
lower earnings compared with
the year-earlier period, but
posted sequential sales growth
that boosted investor senti-
ment about its financial recov-
ery.
The Santa Clara, Calif.-
based chip maker said Thurs-
day that adjusted earnings per
share fell 36% year-over-year
to $1.24, but topped the $1.15
a share analysts surveyed by
FactSet projected. The com-
pany posted $2.58 billion in
revenue for its second fiscal
quarter, beating a FactSet con-
sensus but 17% below the
same period a year ago.
Nvidia shares climbed in af-
ter-hours trading after closing
down less than 1% at $148.77.
Nvidia said that all of its
major business divisions had
higher sales in the second
quarter compared with the
first three months of the fiscal
year, underlining recent signs
of financial improvement.
Nvidia projected sales for
the current quarter of around
$2.9 billion, while analysts
surveyed by FactSet expect
sales of $2.98 billion for the
current quarter.
Last year’s fiscal third-
quarter sales topped $3.1 bil-
lion.
Nvidia, which is trying to
extend its reach beyond gam-
ing and put more of its equip-
ment in supercomputers and
large data centers, has impor-
tant customers inAmazonInc.
andAlphabetInc.’sGoogle.
But growth in the cloud busi-
ness has been more muted, es-
pecially in China, amid U.S.-
Chinese trade tensions and
economic conditions that have
led to slower chip-buying.
Nvidia said its data-center
sales rose by 3.3% in its sec-
ond quarter compared with
the previous quarter.BYASAFITCHNvidia
Shows
Signs of
Recovery
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