Allied Capital Private Eyes Investigated

Federal Prosecutors are examining how someone from Allied Capital Group may have obtained phone records of a rival hedge fund, according to Reuters.

Prosecutors say the private equity firm hired private investigators to get telephone records for Greenlight Capital Manager David Einhorn.

The two companies have had a contentious relationship since 2002. In January, Einhorn alleged that Allied subsidiary Business Loan Express, LLC engaged in fraud. Einhorn also sued the Washington-based firm for defrauding the government.

Allied called Einhorn’s letters misleading.

The U.S. Attorney’s Office for the District of Columbia has asked Allied for records related to private investigators, the company acknowledged.

In December, Allied said, someone affiliated with the company “obtained what were represented to be the telephone records of David Einhorn, and which purport to be records of calls from Greenlight Capital during a period of time in 2005.”

Greenlight has been shorting Allied stock since the investigation began. Greenlight managed $4 billion.

Einhorn last year told The New York Times that someone using his wife’s Social Security number had asked the telephone company for hard copies of his online account.

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