Allied Capital Corp. says SEC is investigating it

0 Comments | Deseret News (Salt Lake City), Jun 25, 2004

NEW YORK (Dow Jones/AP) -- Business lender Allied Capital Corp. Thursday said it is being investigated by the Securities and Exchange Commission, apparently as a response to allegations by short sellers.

Washington-based Allied Capital provides financing to mid-sized private companies. It had revenue of $3 billion last year, making it one of the country's largest business development companies.

Short sellers, who bet that share prices will decline by trading borrowed securities, have criticized how Allied Capital values its investments.

Allied Capital said that based on the request for documentation, the SEC inquiry appears to focus on one of its portfolio companies, Business Loan Express.

Allied Capital said it is cooperating with the investigation., which it characterized as "informal."

"We welcome the opportunity to cooperate fully with the SEC, provide all the facts, and demonstrate once and for all that the short sellers' allegations are false," Chairman and Chief Executive Bill Walton said.