* SEC report says agency failed to probe properly
* Einhorn demands full report be released
BOSTON, March 23 Hedge fund manager David
Einhorn, who has been locked in a bitter fight with Allied
Capital Corp (ALD.N) over the company's business tactics, on
Tuesday asked U.S. financial regulators to release the full
version of a report that probed allegations of wrongdoing at
The U.S. Securities and Exchange Commission's inspector
general found that the agency had failed to properly
investigate allegations of wrongdoing at the firm, including
complaints from Einhorn, the Washington Post first reported on
Allied harmed investors even more because the SEC failed to
act, Einhorn said on Tuesday. Now he wants the agency, which
has faced sharp criticism for having missed the Madoff Ponzi
scheme and other investment frauds, to show the public
everything it has on the Allied case.
"We call upon the SEC to immediately release the
non-redacted version of the report," Einhorn said. "The
government-sanctioned culture of lawlessness that allowed this
fraud to occur cannot continue."
Einhorn, who runs New York-based Greenlight Capital,
started to bet against Allied Capital in 2002 by selling the
company's shares short after saying that he thought the company
was overvaluing its holdings.
SEC spokesman John Nester said, "We agree with each of the
report's recommendations, have already implemented several of
them and expect to complete the process in June."
The battle between Allied and Einhorn became intensely
personal when the company acknowledged three years ago that it
may have obtained Einhorn's phone records.
Einhorn said that someone impersonating his wife and using
her Social Security number had directed the phone company to
send copies of his home phone to an online account.
(Reporting by Svea Herbst-Bayliss; Editing by Richard