Summary of Fooling Some of the People All of the Time
A Long Short Story
Accounting fraud? In Allied Capital’s saga, a short seller learns that sometimes blowing the whistle just isn’t worth it.
Call hedge fund manager and author David Einhorn a glutton for punishment. In 2002, he first became skeptical of Allied Capital, a small business lender based in Washington, D.C. He shorted the stock, publicly criticized the company and earned the enmity of its management. Over the next six years, Einhorn feuded with Allied, growing increasingly outraged over what he considered bogus accounting. He repeatedly brought his findings to the attention of regulators and reporters, with little result. For years, Allied shares held steady or gradually rose. It wasn’t until after this book was published in 2008 that Allied stock cratered. Einhorn’s tale of his battle with Allied is often riveting, although at times he veers into levels of detail only a forensic accountant could appreciate. Still, getAbstract recommends the book to investors seeking an inside look at high-level chicanery, a short seller’s strategy and a Wall Street war story.
In this summary, you will learn
- Why hedge fund manager David Einhorn took on Allied Capital
- How he came to the conclusion that accounting by Allied and its Business Loan Express (BLX) subsidiary was fraudulent
- How Allied, BLX, regulators, reporters and others in the financial industry responded to his findings
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