Fooling Some of the People All of the Time is the gripping chronicle of the ongoing saga between author David Einhorn?s hedg fund, Greenlight Capital, and Allied Capital, a leader in the private finance industry. Page by page, it delves deep inside Wall Street, showing why the $6 billion hedge fund decided to short shares of Allied Capital and how Allied responded with a Washington, D.C.?style spin?job?attacking Einhorn and disseminating half?truths and outright lies.

"Fooling Some of the People All of the Time" is the gripping chronicle of the ongoing saga between author David Einhorn's hedge fund, Greenlight Capital, and Allied Capital, a leader in the private finance industry. Page by page, it delves deep inside Wall Street, showing why the $6 billion hedge fund decided to short shares of Allied Capital and how Allied responded with a Washington, D.C. - style spin-job-attacking Einhorn and disseminating half-truths and outright lies.

In 2002, David Einhorn, the President of Greenlight Capital, gave a speech at a charity investment conference to benefit a children?s cancer hospital. He was asked to share his best investment idea, so he did. He described his reasons why Greenlight had sold short the shares of Allied Capital, a leader in the private finance industry. Greenlight bet that the stock would decline because the company?s business was in trouble and its accounting was corrupt. Einhorn?s speech was so compelling that the next day, when the New York Stock Exchange opened for trading, Allied?s shares remained closed. So many investors wanted to sell or short the stock that the NYSE could not balance all the sell orders to open Allied?s trading in an orderly fashion.

What followed was a firestorm of controversy. Allied responded with a Washington, D.C.?style spin?job? attacking Einhorn and disseminating half?truths and outright lies. Rather than protect investors by reviewing Einhorn?s well?documented case against Allied, the SEC?at the behest of the politically connected Allied? instead investigated Einhorn for stock manipulation. Over the ensuing six years, the SEC allowed Allied

to make the problem bigger by approving more than a dozen additional stock offerings that raised over $1 billion from new investors. Undeterred by the spin?job, lies, and investigations, Greenlight continued its research after the speech and discovered Allied?s behavior was far worse than Einhorn ever suspected? and, shockingly, it continues to this day.

Fooling Some of the People All of the Time is the gripping chronicle of this ongoing saga. Page by page, it delves deep inside Wall Street, showing how the $6 billion hedge fund Greenlight Capital conducts its investment research and detailing the maneuvers of an unscrupulous company. Along the way, you?ll witness feckless regulators, compromised politicians, and the barricades our capital markets have erected against exposing misconduct from important Wall Street customers. You will also discover the immense difficulties that prevent the government from sanctioning politically connected companies?making future Enrons inevitable. This revealing book shows the failings of Wall Street: its investment banks, analysts, journalists, and especially our government regulators.

At its most basic level, Allied Capital is the story of Wall Street at its worst. But the story is much bigger than one little?known company. Fooling Some of the People All of the Time is an important call for effective law enforcement, free speech, and fair play.

"This book is a must?read for any investor who wants to know how far some companies will go in their quest to keep the real story from coming out."
?Herb Greenberg, Senior Columnist, MarketWatch.com

"In Fooling Some of the People All of the Time, David Einhorn, one of the great investors of all time tells one of the great investment tales of all time. This is a book in which you will learn about investing, short selling, and the politics of business. David is not only a great investor, but a wonderful storyteller. I recommend it wholeheartedly for your brain and your pocketbook."
?William A. Ackman, Pershing Square Capital Management, L.P.

"In the world of finance, as in the worlds of politics or science, free speech and open debate are essential. Sadly, our current system is rigged against bearers of bad news, and short sellers are an oppressed minority. David Einhorn?s amazing story of scam artists, corporate doubletalk, clueless regulators, and sleazy lawyers is a gripping narrative. A great read."
?Owen Lamont, Fellow, International Center for Finance, Yale School of Management

An unscrupulous company has cost the U.S. taxpayers hundreds of millions of dollars. As it has happened, our government regulators have been at best derelict and at worst complicit. The company is headquartered in the political power center of Washington, D.C., where it has established enormous influence that has protected it. It is a large customer of Wall Street, which predictably lends it strong support.

In Fooling Some of the People All of the Time, David Einhorn?founder of the successful hedge fund Greenlight Capital?takes you on a fascinating journey that begins with his discovery that Allied Capital?s accounting appeared corrupt. This led to Einhorn describing his hedge fund?s short position in the company at a charity speech (go to www.foolingsomepeople.com to watch), and what follows is a battle for the truth that continues to this very day. The story would make for a great forensic financial mystery novel?except it?s all true.

If you think we?re past the days of corporate corruption and financial fraud, think again. Fooling Some of the People All of the Time details the harsh reality of how the current environment on Wall Street not only allows for such behavior, but how it protects the companies that participate in such activities and attacks those who attempt to uncover them. This is a story about investing, business ethics, and how our government should?but often doesn?t?protect investors and taxpayers.

DAVID EINHORN is the President and founder of Greenlight Capital, a long?short value?oriented hedge fund, which started with $1 million under management in 1996. Over the ensuing years, Greenlight has generated greater than a twenty?five percent annualized net return for its partners. Einhorn is the Chairman of Greenlight Capital Re, Ltd. (Nasdaq: GLRE) and serves on the boards of the Michael J. Fox Foundation for Parkinson?s Research and Hillel: The Foundation for Jewish Campus Life. Einhorn has pledged his entire personal share of the profits from Greenlight?s short?sale of Allied and this book to charity.

2008-07-31 A Revelation for Those Who Believe Efficient Markets and Good Regulation Exist

David Einhorn is a man who believes in checking out companies carefully. When he saw that Allied Capital wasn't following accounting rules and was making lots of bad loans, he smelled an opportunity to make money as the company collapsed. After investing, he had an opportunity to share his idea at a charity event. Allied Capital's stock quickly dropped in response.

This book describes six years of battling to get the story out of what he had learned, to persuade regulators to crack down on Allied Capital so the rules would be followed, and to stop any illegal activities at Allied Capital. The book is written from Mr. Einhorn's perspective.

Along the way, Allied Capital decided that it had to discredit Mr. Einhorn's allegations and his motives.

After many years of battling, Mr. Einhorn learned a number of important lessons:

1. Policing small capitalization companies is a low priority for reporters, analysts, institutional investors, and regulators.

2. If a company keeps paying a dividend (even if it's not smart to do so), many individual investors will be attracted and will be loyal.

3. The Small Business Administration is more interested in shoveling out money to small businesses than it is in ensuring that fraud isn't being perpetrated on the tax payers.

4. Wall Street investment banks will help defend any company that pays a lot of fees.

5. With enough new capital, large mistakes can be smoothed over.

I'm sure that if he were faced with the same investment opportunity today, Mr. Einhorn would run rather than take a short position.

I highly recommend this book to people who learned about perfectly efficient markets and active, honest regulators in school. "Let the investor watch out for himself or herself" would be a better motto in describing the capital markets.

This book will be boring to those who want to a quick take. But you need to read all of the misrepresentations, misstatements, and personal attacks to get a true sense of how the game is played.

If you want a more recent version of this problem, just look at securitized mortgages.

Thanks for sharing, Mr. Einhorn!