Allied and Short Sellers
Between 2002 and 2008, David Einhorn, the manager of Greenlight Capital, a hedge fund engaged in heavy short selling of Allied's stock as he tried to demonstrate that the company's valuation of its illiquid securities was inflated. This activity led to a highly publicized feud between Einhorn and the company.
As early as 2003, Allied complained publicly about Einhorn's activities. Einhorn's activities in relation to Allied were also examined by the SEC to determine whether his statements about the company were intended to manipulate its stock price.
In 2004, Allied came under scrutiny.
In June 2007, the S.E.C. found that Allied broke securities laws relating to the accounting and valuation of illiquid securities it held. However, it did not issue any fines or penalties, and Allied settled without admitting or denying the allegations.
In 2008, Einhorn authored "Fooling Some of the people All of the Time," describing his concerns about the company's accounting practices and his encounters with the company over those years. In 2008, Allied came under wider criticism for aggressive accounting policies.
Read more about this topic: Allied Capital, History
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