GE's comeback was in full swing. Now it's in a dog fight with the Madoff whistleblower

Then Harry Markopolos came along and dropped a bomb.

Markopolos, who famously blew the whistle on Bernie Madoff's Ponzi scheme in 2008, claimed last week that GE has been running a "decades-long accounting fraud."

The allegations -- which the company strongly denies -- sent GE's stock nosediving to its worst day in 11 years and forced Culp to put out yet another fire at the sprawling conglomerate.

The 175-page report released by Markopolos didn't just suggest GE bent some rules. It flat out accused GE of committing a $38 billion accounting fraud and claimed that "GE is the next Enron." Markopolos alleged GE used accounting tricks to hide massive amounts of losses in its insurance business as well as in its stake in oil services giant Baker Hughes.

'Shockingly unimpressed'

However, Culp appears to have limited the initial damage from the report.

GE launched a counteroffensive against Markopolos, and analysts who follow the company don't see a smoking gun in the report. GE's stock has recovered most of its losses, reflecting a sense that Markopolos didn't uncover anything beyond what investors already knew.

"When I read the report, I was shockingly unimpressed," Scott Davis, lead research analyst at Melius Research, told CNN Business. "I think he's full of s**t."

Markopolos did not respond to a request for comment.

"We do not think the company is doing anything fraudulent in its accounting," CFRA Research analyst Jim Corridore wrote to clients on Monday.

Barclays analyst Brian Monteleone told clients on Monday that the risks highlighted by Markopolos "were already well known" and the report contained "a number of inaccuracies, bad assumptions and omitted information used in the analysis."

That sentiment was echoed by regulators in Kansas who monitor GE's insurance business.

"After initial review, components of this particular report appear fairly simplistic in nature," the Kansas Insurance Department said in a statement on Monday. The regulator added that the Markopolos report didn't appear to "incorporate certain technical" considerations the department considered during recent exams.

Even famed shortseller Andrew Left came to GE's defense.

"If GE were to be committing fraud versus aggressive accounting, that would mean over 20 years, thousands of people have all been in on it," Left, founder of Citron Research, told Julia Chatterley on CNN International on Monday. "It's intellectually dishonest."

GE fights back

GE executed a full-court press to counter the fraud allegations.

"We operate with absolute integrity and stand behind our financial reporting," Steve Winoker, GE's head of investor relations, wrote in a note to shareholders on Monday.

Leslie Seidman, a GE director and head of the board's audit committee, said on CNBC that the fraud allegations are "baseless" and "inflammatory."

Last week, Culp told CNN Business that Markopolos's report "contains false statements of fact" that could have been corrected if he checked with GE.

GE also called out Markopolos for working with a hedge fund that is betting against the company. Markopolos disclosed in his report that his firm will receive a cut from the profits of that short bet.

"This is market manipulation -- pure and simple," Culp said.

GE executives are also putting their money where their mouths are. Culp bought nearly $2 million of stock last Thursday. GE Gas Power CEO Scott Strazik also disclosed purchasing more than a quarter million dollars of GE stock that day.

Accounting scrutiny will continue

What happens next with Markopolos' claims is not clear. But GE's accounting tactics will continue to be scrutinized -- including by regulators.

Last year, GE disclosed multiple probes from the US Justice Department and the SEC focused on the company's insurance business and a $22 billion writedown of the slumping power division.

It's no secret that GE has a troubled history with accounting.

Analysts have long accused the company of using murky accounting and needless complexity to mask the company's deteriorating health.

"The short report accurately depicts a GE culture that historically hid losses and deceived investors," Davis wrote in a note last week to clients. "We lived it. This part is real."

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 agreed to pay $50 million to settle the charges, without admitting nor denying wrongdoing.

"GE bent the accounting rules beyond the breaking point," said Robert Khuzami, then director of the SEC's enforcement division, wrote in a statement at the time.

However, there is a big difference between aggressive accounting and outright cooking the books like Enron and Worldcom did.

"Could they have aggressive accounting? Sure. But so does half the stock market," Left told CNN.

Markopolos didn't just allege previous accounting fraud. He suggested it's ongoing, even since Culp took over last fall.

Culp, the former CEO of manufacturer Danaher, is very well respected by many in the industry. He is credited with remaking Danahe and leading the company to explosive growth between 2001 and 2015.

"I've worked with a lot of crooked CEOs," Davis said in the interview. "Larry is about the most honest boy scout guy I've ever worked with. There is a line of ethics he will not cross, ever."

Seidman, the GE director, told CNBC last week that the company's management team and board are "so committed to trying to enhance the credibility of our financial reporting."

GE's challenges remain

Even if GE moves beyond the fraud allegations, Culp will still have his hands full.

GE has been a disaster for years. Its financial arm is bleeding cash. The power division is falling apart because it didn't anticipate the rise of renewable energy.

GE's balance sheet is drenched with debt, the result of countless bad decisions. The company made ill-timed acquisitions, binged on buybacks and ignored a gaping hole in its pension fund.

Now it's up to Culp to rejuvenate this long-struggling company. Cleaning up GE will take years of work and is no slam dunk. And it's hard enough without fighting allegations of an Enron-like fraud.