GE hit with new investigations from SEC and Justice Department

New York(CNN Business) The SEC and Justice Department are investigating General Electric's power business, adding to the conglomerate's mounting legal headaches.

GE revealed on Tuesday that the federal government is probing a $22 billion accounting writedown of the slumping power division. The huge charge reflects the deterioration of businesses GE acquired.

After GE announced the looming charge on October 1, the SEC expanded an ongoing investigation to include the writedown, the company said in a filing. GE added that the Justice Department is also investigating the charge as well as other matters the SEC is looking into.

GE said it is providing the Justice Department and the SEC with documents and other information requested.

"We are cooperating with the SEC and DOJ as they continue their work on these matters," Jamie Miller, GE's chief financial officer, said during a conference call.

GE (GE) shares retreated to a nine-year low on the news. Earlier in the day GE shares climbed after the company announced a deeper-than-expected dividend cut.

The SEC declined to comment on the widening GE investigation. A DOJ spokeswoman said the department generally doesn't confirm, deny or comment on the existence or non-existence of an investigation.

"It's going to be a cloud that overhangs the company until things get cleaned up," said Jeff Windau, an analyst at Edward Jones who covers GE.

The news comes just weeks after GE unexpectedly ousted John Flannery as CEO and replaced him with Larry Culp, the first outsider CEO in the company's 126-year-history.

The SEC and Justice Department often work closely together when investigating potential financial crimes. If the SEC finds something "problematic," it typically shares that with Justice Department investigators, according to Tony Phillips, a criminal defense attorney at McKool Smith.

"In general, the DOJ becomes interested when it looks like there is some effort to conceal the true health of a company," said Phillips, who previously served as a trial attorney for the Department of Justice's public integrity section.

If the Justice Department finds wrongdoing, Phillips said prosecutors could consider a wide range of charges against former and current GE employees including fraud, making false statements and conspiracy.

The investigations deepen GE's legal troubles. The company faces at least three different inquiries from the SEC as well as two from the Department of Justice.

"It's definitely unusual. I don't know of companies that I cover that have that many investigations going on," said Windau.

GE announced in January that the SEC was investigating its accounting tactics as well as a $6.2 billion insurance loss that caught shareholders off guard.

In 2009, the SEC charged GE with accounting fraud, alleging the company used "overly aggressive accounting" to make false and misleading statements to investors. GE paid $50 million to settle charges, but it neither admitted nor denied wrongdoing.

The Justice Department is also investigating WMC, a subprime mortgage business that GE shut down in 2007.