GE is hiding $38 billion in accounting fraud, more than 40 percent of its market capitalization, according to Harry Markopolos, the forensic accountant who exposed the largest Ponzi scheme in history. Markopolos’ 175-page report, released Thursday morning, sent GE shares plummeting, at one point trading 15 percent below opening.

GE’s insurance division’s “losses are unsustainable and they're growing at an exponential rate. That's not going away...and it's probably going to make this company file for bankruptcy,” Markopolos told CNBC.

“This is market manipulation, pure and simple,” GE CEO Larry Culp fumed, slamming the investigator for refusing to disclose who he’s working with and cashing in on GE’s misfortune by shorting its stock. Markopolos only revealed it was a “mid-sized US based hedge fund,” citing confidentiality agreements. He receives a portion of the mysterious hedge fund’s trading proceeds and could collect more money from a whistleblower program if securities regulators pursue the case.

Putting his money where his mouth is, Culp bought 252,200 shares of GE stock as the price languished near its low for the day, triggering a slight rebound. Shares were still down 11 percent as markets closed for the day.

GE’s insurance unit, which made a series of bad bets on long-term healthcare policies, needs $18.5 billion to cover massive cash shortfalls, the report claims, charging that the conglomerate is concealing its liquidity issues from investors and regulators and that it is also hiding billions in losses from its oil and gas business. GE has denied the charges, insisting it has a “strong liquidity position.”

Markopolos’ repeated efforts to blow the whistle on Madoff’s gigantic Ponzi scheme were rebuffed by the Securities and Exchange Commission for eight years, allowing the fraudster to milk his customers out of billions more before the regulator finally took action. His warnings thus carry a special weight for an industry that doesn’t want to be caught with its pants down again.

Markopolos isn’t the first to highlight GE’s financial troubles - the SEC and the Justice Department are already investigating the conglomerate for accounting issues in its insurance and power divisions, and it is under pressure to fire auditor KPMG after charges that their century-long relationship has gotten too cozy, along the lines of Enron and Arthur Andersen, the accounting firm that abetted its catastrophic fraud.

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