SEC Case No. OIG-496

8/7/2019 SEC Case No. OIG-496

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This docum ent is subjeetto theptuvisions'of the Priviney Acta 174,.andinay Tegnire ukd aettoi beiorediseinsureoihisa parties- no redaction has been p erfPrinabrthesO ffice of kpector:Gen eral- Recipients ofthis reportahould:trotdiisonsinate. or c o p y i t without. the insPeotorefenorsills approval:.

REPORT a INVESTIGAliON' . UNItED S T-AUS S E - 1'1 . I S MO01cIAN GE: C ADIISSION -00,10E . OF INSPECTOR OE. RA I,-

-Case No. 016-496 . . ? i l l e g a l 1 ( 4 4 o f t o o f l i .c t . o f I n t p r is t . 4 4 r o p e r U s e o f i g a u - ru b l i c I n f o r m a t i o n . .4- a n d F a i l u r e i t i, T a l i . .e . S u f f i ie i t A t t i O u Aphis F a r l d i i it i i t C i i M i g i i t yJ a n u a r y 8 , 2 0 1 0 . . a


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d o c u r o t a t liSabi* tOcal.014m 0190 ilte rx iVIW Y Att ofI , .s n d a t a y r O c i a u t e irot lacitoW k o c a6400FsuivAll i fra Parikt, MuNdaettoAlsaa Watt paelbriatOil thaiffit iAltaivetiorGehainta.. gotipleofst h t e r e P o r t s h i la d a - a q a l a i s o a l l a a i t o o r c o p y I t v v it h o a i l h e l a s p o c i o r G o t o u r a r a : a p p r o v a l ..

Report or InvestigationC o b l e.1G-496Tab le -oftontentsr i d r e d g e , l i o uuinmary Of RestlilIit of Invte fl 1S ope Of 1nV esrigation 6RelevautCbminission and Qovernm erdategulatjons and Rules 7 'Results of pie Timstigatkut. 9Lacktibmild Fhidints 9 .A .ffied.Capital Corporation 9.neiiitthe Largest anoltirlost.1)oinkont 9E ven. Though Row:dated by SE C as an investment Company and

Considered M gt Risk, BD Cs Could Go U nexamined kw S eir.orid.Years 10Valuation of ripg Loyesunents 1 1

Th e 2 0 0 2 (b)(7)(C),(b)(8) l i n v e s t i o s t i o n . 12 ..411:04 $uc ettaiaitfrpd -t h g B E e toavesiigateEitihom and 'hisM agO.FiiittlateeOligbfCipital; W ithout Evidonoo:orWrongdoin#M i e r E i ti to s t u ' i N i z g a t i v b Speech About Aided

LPeech2AlliedStizpped110 fitt PohlitilEfiutt13

3 .Aged. M et 'With the SE C to Ow jrni4stigittion otE lohorn


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A . theiriveatikation Was.Supehns.W ho; Cite Yearb)(7)(c) (b)(7)(C)Latet (0 )( 7 )(C)

tThis d ocume nt ts tob ject to the p rovis ions o f the Privacy Act of19.1 .4at td m ay requ ire red before .ditt iolure to third parties: p ie redaelion hat beet performed by the Obacetat boaixotorGeogr.alt. . ;Reci ioidat0- .;t i f i lds Raton A m i d not d i s s e t a ing eor t ot v I t - v t hOt t l i e ll is p eet or O ex t er a r a . a p p eot a k

R e p o r t o fh k-e s t i g a t i o ndiseNO. 010496Table of Coatgats., -ColaB. Ein h o t 4 Began Contacting the SE C w ith Specific, DetailedAllegations and E vidence ofW rongdokg by Allied at Sam e TitheAllied Arranged M eetings to Ur g e SE C to ittvestigarq E inhurtt6

1 _b)(7)(C) ed a Great Deal About Allied D ining Coulaevestigation)b)(7)(C),(b)(8)a. S h o w e d l i b Ef i ga ge t t i t i t t f i t(0)(7 )(C).(b)(8 ) 2 0b. Atea0 . 1 4 1 0 a h i f e r m n r a n d u m , v i I t hb) ( 7 ) ( c ) ploh , Hi the (b)(7)(C).(b)(8)%ad ireInveat igat ibp 2 2essively Queationed E i1orn ia eatimenyd. 13)(7)(c)teached Out to SEC 0

(b)(7)(C),(b) ratition about Allied During(8)

(b)(7)(C)

to.22

( C ) , (b)($)

e, Adaion61 InveStigatiVe Keds (b)(7)(C) 5 .I.)i. Boxts ahattito.entg:gutydentied tat)lif.

V . - i n 4 o n t , -2$

(b)(7)(C)2.t i g h t E inhonen Teienlione Recordsan dnt List iii(.b) (7 )(C) . (0 )( 8 )Investigation2


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1 4 4 4 t IP I P t ib l l (D O M AlEcdM ater ,=w ars of Other , ,SgC A ttiori .% Reited:D u r in g l ik v e p t i g & i o n .z

A lso unswp' Subm itted(b)(7)(C)U S eotCOD* SISCplEcid.3.here i s No E vid enceS E C D o m /M a ts .t foitethent Quieldy Found Einhorn E n o g e d . a I + .1 -qW r ong d o i ng 5 iatirO W A S NoiininVed Ile Was No Lon& Su b jec t o fInvet t i g i tio r i, D esp i te .1 t ieO esUi lg SO iWiebLAi t1101 ,E 0 M et Sjopifie04114ttatiniogoPh ysically T ook Nc;n-Publieb)(7)(C) 27iF 4O 0i#44 141s4tiblgato thep rO viiions o f the r i jvaey. ii it - ,41974, a n d ziay regen feiedo iliani be filtg.03#144.00 ehir4owedatclion. hier been perfotmed brdieOffieeollnirpeckF Coeval . RetipiesisO dd* AV v ntmiti l isseminot.eareopy it without the bisl ieeter Oenerarcapprovad.Rep ort of brirestigationCase No, 0I6-496Table otConteuisiCan'tFes' *pig '.t w o _ t r i o y .Footnopt woo 1 . 4 v p 1 R i n g -2010 Wh ewNo iketionviaicrateob ..b)(7)(C)CII? iwas Cad4tietiteathAlltageo uslEu tubiat iezi o f AlliedColuigellt ifOtanedilet,

.44-440.1 14how`ginifroyenriatHb. . b)(7)(C)-Fits :M iced A toivb Thifreenle&a .b)(7)(C)


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(b ) (7) (C) AiliestOne Year

36

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- 4143 .

i ii is4lor.um egissiko4 tg o.pk tolislosiA foertivooyite.t4174.'oodziay.togoiro reatootiogg toioreg l i s d 0 0 0 t o l t o tardporites: N o . r o d o o t i k o k t o w b o a t p e r f o r m e d l i ty f ii e O f f it o o t in s p i t iO r O t o o t o t i -R * 4 1 1 1 1 4 1 *o f t h i s report shear nottlisseminate or tOpylit without 'the Inspector Ue neroPcsivprova

Repo rt of InvestigationC ase No . 010-496Table o f C ontent s , C o n 't

E t h i O f f ic e C l o u dRe gister ason IncntupO e n faw n1 3 t a c t s 4 M ie s O f f le o 4 b e i tCnneenabl ( b ) ( 7 ) ( c ) Patentierecidict efIntgtest3 3*n f t w n l e t tteCt i tn ionlAvhol i t i es , T h a te d in Preteging O fEinhotes T ele iiho t ie I teco tete Left the ste, p u t N O O ne E lf in - 10=0 Binhor i tTh is Mat ter1, Pretexting2 . 0 'S Ac imissic m . and SEC Diseiosere qf l i r e t e x t i n g3 . M i e t r o Lawyetk t Told the. SC t h a t (b)(7)(C) w a s ,RestintigibIerO t t iing, tE i * I M togik.C tign.s0$06entlett to the NilareSE C to Takv4ron A gainst Mica:3 4 i it t iniit te4 P ieteit ingT h e tpotzpo4t A t k i e t aD egeitneies and (Jim a CittulairtmeT4t WA Me Exttninatient."

(b) (7 ) (C)

t .b )( 7 )( C)Pane3 4


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' T h i t t l 6 0 3 1 0 0 1 4 1 * : t i t A 4 4 t . .4 ) , . 4 p r o v . k . l o u a o t th e R t is r A e y A c t e f1 0 7 4 , % 0 4 w a n k e g t e r e t e d 4 e d e a , b b r o re f4 1 4 o s a i t i . 4 . 1 1 0 i d 044- i1OriAx elioghaa $44.144 1 4 140 ito;e 01400 0 t i a g i l t e t O e 4 01 p O r A I L 1 4 4 # 0 1 0 ;oil lstexpoit-shothyeat"h s t e m h e i t e 0 4 ! e o t i f: It w i th o u t t h e l e s p e e t e r .r ., e a e o n a i i k a v i d .Repot o f i n v o s t ig g i t i o n c _C a s e -No. 010496 *

T 2 b l e :O f C 0 11tgOts COlet -

L The Examinationand SuPervised 4 32. 'There W as No V isit to .Allied's Office Lom ita BlocksIttonthe WC45The E xandnat ionTook M Ontl is to Complete(b)(7) (C)K nOad.Worked at the S E C and it M ay Have Colored .His V iewO f A l lt e d :F i n d i n g s a n d R e f e r ra l t o SA C C K C e n g # :C. D isagreement Al:tout Refttral. to Etiforee tnent add Vbe ther.All iedM ay Havel: leen A Ponzi Scheme

D , The Al li ed W ork Papers Wo re Deleted f rom Shared Computer D riveThe Bn fo ree m ent tavot i g ati on o f A l l ied Be gan Ahnost Two Yea r s A f t e rF m h o r 'n p r o v id e d Deta i led gv idence o f A l lied .Praud.

(b)(5).5 5

T h e C l i P I T I O i S S i O n 1 0t l idl iAp0C ..1)0.1[0WO of W hether All ied W as .a Ponzi Schen*, 130Ciiii.Se ofH.t Financed its Divklends, W aS Not. InVe giBate4 Dnforcement Agreed to Settle w ith Allied. W ith No Penalty or4efinn. Against A l l i e d O f l i c e m - 5 '63.- (b)(7)(C) 454647485 . I5 35


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R e p o r t o f bwe .otikatiOn ctise,filo..0106496T A W . O r e f f 0 0 0 0 , D i e tt ri g h T q w e . re d . C o m P o 1M ea th % w i th R n i x o p a t o rk t xt w A r g v oI 1g0: see it w r it i-Ohtgoe k iSt i t i e t i lo t

D erided Not to Mit*

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(b)(7)(C)o n o '

( b ) ( 7 ) ( C )Fraud Champ s Sh6t tl y Mu m M e e t i n g . W i t h Agieft Ciinnaet 5 9 ;

_ 3he Tons:of the Settlentgat OrdU ih e S e tt le m e d A g r e em e n t . f r a d D e f ic t e t k e i e s( b ) ( 5 ) 6 3V o l u i r e . t o M o n i t o r -C o m p l i a n c e with Slattern*ement -0 4V. ( b ) ( 5 ) 65

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T h isd o c u m e n t is -aubject to The inovistonstifithe Priv acy Act :141.9W, and M ity.'requirrednettoil beibredigiosere o third. parties. N o redaction :has been performed by the .bilice ofluspectorGenerst. ;Recipients orthis report shonid tad disseminate oft:mu:it without thelinspector:OenerairsAppnwel, . ,

REPORT OF.NVETIGATIONIT N IT E D ; S TA T E S S E C U R I TIE S A N D E X C H A N G E C O M M IS S I ON O F F I C E O F I N S P E C T O R . G E N E R A L

CatS6 No. OX-496Mlegati011S of Conflict ofraterest, Improper Use of Non-Public InfOrirtatiooand F ai lure to Take Su ff ic ient Act ion Against F raudulent C oni ic iaxty

. In i roduc t ion and Sum m ary of ftesupts of InvestigationO n h i ly 1 :0 ; 2 0 0 1 3 , the Scoaiitiirg andEscliarlge Commis -sk i t (1EC.7 `5004:01Woit).O f f i c e . of i t s , p e c t a r G e n e r a l C O I G I : O p e r t e d : n r i iiiv.eatigatiod atorSE CCoes form er Chief of S t a r E a 4 t e d -t h o - C t I G t o t s v i c o a l i f t a t i o a s , against ' tt ftlatoPivisioo of .E n f o rc e m e n t ( "E n t b t e e i n e n t o ) = t a t t y : . l it a l l e g a t i o n l m f e r e : O n t l i t t e d in 0 ifidt:Stoit-k t o t o i t o ta r t ic l e a b o u t h e d g e f u n d G n e e n l i g h t ta n i t a l L W r e n t e n l ig h t C a p i t a l stiatiago DOM 'e`Eilthamil thttic s c i o n 4 o -i e i c le a , s e d b o o k , f bo li n g .S o m a n p h e P e o p k A ll o ft h tT i m e - A L o n g -S h o rt S t o r y e ' . .F . in h o r r e i hordel, The snfinler gtateci t h at nnel-v rEnit

cOmptaints w a s t h a t (b ) (7 ) (C) ivhcra g g r e s s iv e l y q u e s t io n e d E mnont about h is s h e r t e s e l l i n g e f A ll ia e op na lV orp e nAil kir)s t o c k , b e c a m e a r e a ls t e r te (b)(7)(C) for A l lied of te the l e f tat SEC , In alditgai Ilt0.4#10W n o t e dt h a t A l li e d O b t a i n e d p u r l o m e d tc lophon4MatAa. T h e form er Ch ief of Staffw as concerned, inter al io , ,yliave e n g a g e d i n il le g a l activity and take n pu blic. SEC investigatory m a t ei l in g t i n h o r n ' s t e l e p h o n e : r e c o r d s . 0 1 2 0 0 5 . th e o r c P P N i u d g C l g - 1mbfP43 0 1 1 1.40! inq uiry into s itralar tille0CPPIAliMin a letterliontrinhora'slr e n u f i s e t i l t i e h a r d z a b e1 r- in), to thvoiG.Y . Th0 2 0 0 5 -i n c t u a y . :7. Thatietter allegedhave bee n: (Io g r e s s ' r e g a r d i n g t h e , . ..C o m i n i s s i o n ' a i n v e s t i g a n o n ot. which Z a b e l cz i f e r P 4 4 in , a n d( 2 ) u t in g t o A l l ie d ' s a d v a n t a g e n o n ; l ib * e ' I 3 al I . 34 On abMand Einhop teshe dg e k ind GiCCOgtit COM, wilic (b ) (7 ) (C )accith ottg lillis particip ati , a - a aInvegigatioli &Alijahurt Aigl i - : - ,I* I I IIO'a ...,3(b ) (7 ) (C)-a so r A l l ie d . Z i l i e L e l a h n e d t h a t (b)(7)(C) Iti .. h a v e V i o la t e d a c r is ta tu te m m i s ti on r u l e s , f o r attorney


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' The QM iui res ti tgationfmthet revealed: tht t tdu t iig jhe: same t ime A llied w as Ore toonnvinee:the SEG Ityinvestitate Eitihorti,. even without any evidonqe-Otwtougdohig , %AmuW A S strbinittifigspeCigc and detailed W ets. to t h e S t e Outl inl igei lance of .All ied!*overvaluainvestments and requesting the SE C to investigate Allied. W e found that al though the SE C'(Acei3f Compliance Inspections and E gaininat ionsM ah7).badbegunamination Ofme W' iratiarM= r1TESU farAr41111),(b)(8)r e g i l g a t i O n ,rhvgis .. ,b)(7supervise(C )lAvnust oecame a ( b )(7), I tor .Aulect . we row thatt h e (b) (7) (c m b)(8)ve.stigatioaggressively viettioned E iol ioniintettiniony, subpoen aed several . boXes,ofsought E inhomh telephone repords-andliSt aids clients, W e also found thanum erous, successful efforti to learn aboutAll ied dmini -he course ofinv gado. (b)(7)(C),(b)(8)c a,ll ;I:.(b)(7)(C). : 4z g Tti t ,s : /kkgueut ibOttO tneprovlsiosAtte P riv r i f t A c t ot ION a f td - I R I W T e g g i 1 01vida431 1 %toreAll.sriSi l ipt to third pad *. N O 1 : M 2 4 6 6 4 2 . 1 1 1 * U e n p e r f o r t a e d b y Mee etinsnectigtomerat, .R*701*fi,o f t h i s t o o , r t % n a d a n o t f l i s s e m i la g e 4 r . c o p y it without thelastiettotiOraPs appyavair.*Mild I 1 I rceme,at invcstigationinto Allied w as opened after (b)(7)(c)(b)(7)(C)ft iu * ion but t lia t exew as i iospecf tcvo lawastionldarly, aw ; rtije Tre fleXtrirtb)(7)(C)f ter reView iU stlie4afennaiionproldei l 2 1) C l h y t h e nCh ief o f S h i f t; th e O T -0 Woes in that inquit,5 , and . l itoadettettits invesigatiOu toinclude additional alleg na tinhorn M ade in his brat Published in mitk20 08 , EiriltOreS honkrecounted the much,publicized heated feud betweenE inhorri an d Ana, Which continues:today.,The feud began in May 200 2 when E inhorn gave a ilsgailit speech a t n e o n f e re n e e - -about Alliedand described why Greenlight Capital had a short position in Allied. Einhorn'S speechcompel l ed =W V a l so short an d sell Allied's stook t h e next ii..y..Alliodxgspqa d g d , according4) Einhorn, int a "W aliiiitton, D :C .zstylo spin job," agackillgE inhorres book included allegations of the SE C's : failure to.take appropriate actionrelated to .Allied's wrongdoing- Fathom W rote thathe sentabour a doU tt letters with detailedinformation and evidence related to his allegations OrW rOnlitddixtg at Allied to several 68COfficials, butnover 'received a telephone salt orviait tenledpouse. abort) , stated thathe did nothave :any idea Vihether.anyone fa t the SE C followed ;up tat the infornianienlepinvided. In fititdletters, and in his book, E inhorn claimed that Allied overvalued many of its InveStmerits...E inhorn also stated that hebehevedhg was invd,stigatf4* the $E ( at the behest o fopting. the un usual timing of reeeiiitixa subpoena for his testimony a n d . ,d O c t u i le A t s a f t e r .*Enforcement anomeys cal led him the same day:he. a S i t e l i i Allieda question on nfereng4 Th e= conducted a comp rehen i ive invest ip t ionatheal legat ioxis h i Mah out 's :book.Th e investigation revealed that Allied sitereSsfally,lehhietitheSE C to begin i t tgest i i tn in o .E inhorn and his hedge fund Greenlight Capital viithetit spedific evidence of witingtking, oget-Eithouils negative speech about A llied:14May , 20f l2 Th e 01 0 inves t igation found thatE rtfoteem enes investigation of E inhorn and ,his ,heilvie4uul ong otherbedgefindainctudiag(b)(7)(C) (b)(8)N V 4 1 $ O P M I T it iV e d shOrtly.after , 2


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rso c u m e n t i s s u b j e c t 1 0 t h e p r o v i s lo m ' o f t h e P r i v a g *. 9 i 4 a n d r n a y n q u i s e e d a c t l o a b e f o r e :d i s c lo s u r e t o t h ir d 0 1 0 1 1 0 . N O 0 4 2 4 4 9 1 1 j i a s be p g r f o r a v i d by the tilikeAlle$PeeteriGw eraL 4;4*40;114O T t h i s 1 1 : 4 0 3 0 1 : 4 4 . 0 1 d n O t d a s s e m n i a t e O r . c o p y I t w i t h o u t thd.fiispecitir-GengraftitpprovalLi n a d d i t i o n * a id a r o a h t h e a X a n . im e r 1 4 1 ,4 . 1 ) 4 1.4 tete lmftanki .viSiti/4.01 ,elrgoflieds,-even600 0 Oft *w ere loeatet i thefAsSociate Meant -supervising the.eAtin knew (b)(7)(C)whotomg*workedtt h e SE C,, and indicated :that he trustea)md bad glevieW :thnt anyone whp1iad 'worked attire- SE C w as "niat gpingtnbedeinganyti l legal .'"'The exam iner on the Allied examination t e s t i f i e d that sheteicehted considerable "pnshbaer from the. AsSeciale D irector with regard:to her findings a g a i n s t AIliL Spe cifically, 't h e e R c l im i ll e r e x P r e i s e d

t exa had not had saki* OAK fie% earnings to pay dividend s since:

19 99 without the isstatiee of- dd it ional s took: The w oollier v ias 00;411 4 that* mgm vrioW hich Allied was financing its tfividends.was a k i n i 0 -1 1 " P h O Z I -S e s h 0 1 0 . " M O t t f a ie k a l l, of. thework papers from that examination were laterinetplioabbr deleted front the DOB Aso*eomputerin April 2004, the recind shciws that OM ii&rred M r& findings from itsexainirtation ofAllied to E nforcement, including the conceit' about how Alliedfinanceditsdividends W ithW hiehthe AssociateDirector disagreed. The OM determined thatthe issue of how Alliedfinanced its dividends was never i n v e s t i g a t e d by E nforcement. 1 1 1 M g 2 1 .1 0 4 , gnforectnentfinally began its investigationorthe c l a im s r a i s e d byEinhorn ' in*Vand AMC W V , W e fonud .that Eutloreernent determined by-mid:4W that more than adozela of Allied'S investment., - h a dsignificant problems with the calculation of their vahz and that Allied had materially mer i ts .tedits net book income on U C.Foirris"1,04(" for severalyeatS.E lowever,after inVestigating the matter for threeyears in June 2OG7J ustafierAlllatLtid.the SE C its agent engaged in pretexting, the Comm ission entered into a settlentetitagregnent ,with All ied, l it that agreeMent, Allied 'agreed 0 . ) . c o o t t o u e to , e m p l o y a : C h i e f Valuation .Ofter tooversee its quarterly valuation process and third-party valuatiOneOaS ultant$ to O S S I S t in i tsq u a r t e r l y v a l u a t i o n P r O t e S 8 R i r -t v v . d years. No penalty W a s assessed against Allied o r a n y of itsofficers Or directors. Th e DIG itivestigationfurther crigeltited that Allied'S ocatosel had requestedqtrid Olitiah tld111 V -W 0 1 1 s*4 4 1;frft.**g.iliclroin4** *14911 0 4 0 1 . C r040r i t i f o t eb a i d t tA t l i x e c 4 4 4 1 1 4 V o l il O r attorneys I r e t s ' --succesgrullylohb414 Enforce:Witt nnt.0 bringfraud charges. xtelinSt Alliedox ( b ) ( 7 ) ( c )WonfOrcementfeunclkOwte.overvalued some ofAllierrs investm ents i : n a t -tnatad to hom e A llied Iteetl i allookiatalre oa de tha rge . -W e , further bind t h a t u n d e r the settletnent with AI110114'6 W i r e A O . e f fo r t sMade by i h a e d m i rt i is s i p o , o r g y m p r o v i s i o n s in t h e W . t ti g n I g l i t order, to mon itor complianceAlti.4 with that agreem ent.Fin.ally, we found that after the OIG initiqed i t t i r * e s t i p O t i b i t A r s i las( b ) ( 8 )published about his experiences with Allied and the SE4


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,

earanteatii subject to thiproyisians otthePrivrey ittilitit974; ;aati inay re*re r ethietliin.hrtlire- d i s r l is e r p t e th i r d j u n - t i e s . : N o r e d a c t i o n b a r b e e n p o r k : r u l e d by theOfficertOlpfortsp l a t s re p o r t a b o r l d r o t d is r m n f r a a k e r O m i t w i t ti o n t :t h e i n s t r ic l o t C e n 3 0 0 1 0 0 , r 0 r o k r u l i t .(b)(8)In all, the MO's fm. dingq'dining thiskiestigation:inise concerns. aho ut h o decisionsw ere 'M ade within the SE C w ith regard to the initiating and concludins Of the examinatimindInvestigations. White we d i d n o t find an y O l i d F g o e of P P O O I G O W r O n g f lo j o g : 0 n t h e p a r t o f c u r r e n t .SEC employees, we found thaisetious and, credibie*egotions against AU TO w C t e n O ti n v e s t i g a t e d 4 an d instead Allied was. able to successfully lobbythe SEC to look into allegationsagriinv i t s rival Maho ut w ithou t any specift evitteni-e of w rongdoing,.

i )7ifi.also: found Aft there - w ag a lack oftom m tafication betWeenOCIE end E nforceM ent .w ith respect to-pending exam inations and investigations. M oreover, .a former E nfdrceratent.anner ( w h o l l a d s O o h significant performance problemste was asked to - leave 'Enforcement) .!_was able to obtain a signifi , ofsensitive iothm tatien he m ay have disclosed to Allied

W e are recommending that the Ditectonti of O efaaritanfortertienteareftdly review thisr e p o r t o f inVeatigation andthe ilikterrofthe ,aaininaten and inftstigetionntbat aredeseth ed inthis tepott andgive consideration tn.pro nalleiting aruliortlaritAig p roee dure s w ith retaittod (1 ) how oxatilitletiOPS and invegAgatious Are i n i t ia t e d w h e r e t h e r e . a r e . r e q u e s t sfrom outside p e r s o n s o r e n t i t i e s in d u c t i n g . w h e t h e r specific allegations ofwroNdo ing . have been provided, in determining w hether to commence anexanduation.or investigation;

: ( 2 ) informing individuals and entities under investigation th atthey are nolonger W ise% if au : 4 1 w e s t i m t i m i tI14 lithely M anner, as required by the - F#FaceM OntliAantlak .(3) .ensuring that other than traditional W illi m e e t i n g s areAlOt unlited by aggoAssiVe Counsel to illtto011oO-deoisions Estirooment sotionS; (4 ) i n c o r p O r a t i n g previsiOns in E n f o r c e m e n t S e tt le m e n t a g re e m e n t s t h a tenSure req uireinents.ate a d e q u a t e l y monitored for compliance;(5) . . limiting the abil it y o f 0M-P ersonae) delete examination work paFr5f r o n t G I C 1 B r A t i o n t e r s y s t e m s ; 7 ( r x 7 ) ( c )wh en he hecam e areAliedyear aftetleaving the SE C. Further, mte - f o t m dconcerns with both the O C ex amination of Allied and the resulting E nforeernentinvestigadon,and bOlkvotherO -O r e questions about the extent to whithAllledN'SEC COMe r a i b i t t V i t ta g g r e s s iv e t a t t le s i t t a ir h a v e h d l n e n c e l iB u f b r e e m e n t 's a n d 0 C 1 1 3 6 '0 . d e c i s io n s - in m o s t M a t te r s .5


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thlf doklum entlaObje4tcleeptiovis lons o tthePrivotyAct t r 1 9 7 4 i a n d . m a y . f r o g a i r v r o d a c t i o i L l y e f o r e414.41os too* third pat** $0: gadataon talpbegoverformea.bytheetfilteorkqe.e.,totDeneral gtotipletik- o f V e i t retibitAiould Adt d isdettruide or c o p y i t i v i th s t u t t t i e l a p i c t o r G e n t r a r s o p p t o l t a l Le n s u r i n g d i n t O C M u i a ii a p e i n e n r iSnO t iuid i i ly f i l i ll i let iced1011 .6pregentdarcloner S E C e m p l o y e e s i n e x a m i n a t io n s a n d t l ia t a l t i ss u e S i d e n t ir r e d a sp o t e n t i a l : * .d e r n i S e e n r it iw l a w v i o h t ti o n s b e c n r e t i d l Y c o n s i d e r e d t o rW e i * En rim onw at; ,andt r o c u r n e n t i n g t h i e t * . a s o t w s p e o i l ic i s m . = t e t e t t e r l . t o E n f o r c e m e n t t ro n iO C I E u t e n O t i n i t e p s tl g e t e d , a l so*onnnend 'thatsh e E t h ic M e e c o n s id e r ne t h o d s e i :m i re t h a t h e r e i s n oa p p e a r a n c e o f im p r o p r ie t y w h e r e f o r m e r $ B C s t a ff a t to r n e y s r e p r e s e n t a company s h o r t l y a f t e rt h e i r w o r k a t t h e $ B C p r o v i d e d t h e = W i th S P e c i . 0 0 a n d s e n s i t iv e i n t o r r n a t io n - r e l a t e d t o th a tC Q U ' I P W A Y .

Scope of InVest ipt i rd iT h e a t a o b t o k e d n i td ; re v i e w e d : v o l u m i n o u s d b e t u n e n t N f r e k t i g i t o 0 4 tad* i n c l u d i n gs t n f e e l n a l ig , w o r k t t a n e E s fr o m . s C I E . e x a r n i ri a t i o n o f A l li e d :, o ff a f o rt e n t e n t d o c u m e n t st e l a t e the (b)(7)P 0)(8)l l i e d i n v e s t i g a t i o n d . .T h e a C r t o O k s v i ti n i ; o w t h e - n t e o r d t e s t im o n y o f f _()

( b ) ( 7 ) ( C ) . $ 0 . f r AC C O U l l t a n t"Oifte. OrC9111pliattCp b i w c t i p t i s . 4 . n d(2 )

k A a t u i t nat ions ( F e b r u a r yE i n h o r n , f a n n d e r

1 1 , 2 0 0 9 ) ;a n d c o i - P re s i d e n t o f C i r c e o l i g h t : C a p i t a l (M a t c h 9 ., 2 0 0 9 ) ;

( b ) ( 7 ) ( C ) f a n n e r O C I B e x a m i n e a n d B r a n c h C h i c .f (I t tl y 20; 2 0 0 9 ) ;( b ) ( 7 ) ( c ) , S e n i o r -C O n n s e l , D i v i s i o n o t E n f o r c e m e n t Pay2 1 2 0 0 9 ) ; ,

S a l t a C o n n s e l D i v is i o n o f fz i fo r c e t n e n t O n l y 3 0 , i 0 0 9 ) :b)(7)(c). .( b ) ( 7 ) ( C ) A s s i s i n n i D i m o n : R A - D i v i s i o n o f B n f o r c e r o e n t ( A u g u s i- 2009);

(b)(7)(c) A . s t a i i a t e C o u n s b i , D i v i s iO n ) t in f O r e e t r ie r i t Ougus t

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- ( 1 . ) (b)(7)(C) PhiladelphiaReglatial Office B raael i Chie f ( r ia ly 24 , 2009 ); end ,enor.Advisor to D irector, Division of Inveshnent Manageme nteIG conducted several telephone interviews of former piforcement attorneyho rernsed tO appear for MG testiniony. 3

Th e '010 a lso o log iam i the : o f f i ew P pronym pi Po i tio rd m aven A-ra t 1 (b)(7)(c)(b)(7)(c)i l s(2b ) ( 7 ) ( o )(b ) (7 ) (C) *40 0 0644 sy l ts f e4 ta . ti*orsivilioro of tlietriiiael jug or itek a h o i k ato tOcere i l i casktM00.t . 1 Y e t t f g o w t o , t i ii i . .d 001 4N ireda.00 4 bi t bar WAtitiM1 IOW OffickOntitrOWPA'aeifOrill. *AA*OrkirfKI)04 . 4hOmillitot"AkikilatO Ore0014140:04thelOtiggtor0.0:01-41.1PrOiti,,(9 ) Unident if ied Senior O f f ii a l ,. D i v is io n o f V e s tm e n t M o nanagement ( g F i l t e n t b e r 1 ) 1 )2 0 1 1 9 ) , .2he O IG also conclutted O n - t h e -m o o r ( ' in t e r v ie t V s - o fiI l e l e v an t t Ommis s i an an d 4 Cov e imme n t R e gu la t ion s an d R u l e s ,The O ununiss ioch R egulat tgn CencenAug C onduct O f M eruhet$ and: 103 1 e.A andVorm er Mem bers and Em ployees of the C om m ission (hereinafter 'Conduct Regu lation") , nt 17CT . R . 2 0 0 .7 3 5 - 1 e t r eq . , sets forth.the standards ofethical Conduct required: of Commissionmembers (Lc.,.CoultuisSionem) and current: and former _employees (hereinaiterreferred to

collect ively as em ployees) . Th e Co nduct Re gulat ion states in part:The Securities and Exchange Commission has been entnisted byCo ngress with the proteotion of the while intepAst M a hir,hlysignificant area of ou r na t i ona l co t tony . In view of the effectwhich Cornm!sgonnetion fieqUentlyhasion The pUblic, his. -

I i i i igeniO r Ofdin Irequeated con raden ti il i ty; therefore, this person is Iefeleneedthroug htint this report as ".goniurO ffieial"-Th e O I G had gregnen ielnifl:anciteklitkaike com m unication wi (b)(7)(c) I I 01n curly

F O r g a g t h r o u g h : t h e indo t Ap t i l ' 200. Exhibiti 4-2 & 1 (b ) (7 ) (C)ttaily t o a t a p t e 4 .the MP :after teongttizing allationsAgAittt hiniseltiti . t h e.-ix; ( sdir 26 0i Semi- .Annual ( b ) ( 7 ) ( C ) bit. I. DesPitenitinertais promiseslo provide rt 4S . v d ' . , t = w ' i lthe 61 cT T pmvid04.4y.w.ftn alsponv, S e e Exhibi tr e fos ed ta i i.iniony "Were T heIRG . 1 4 .3 7


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O N 4 0 1 1 0 0 0 i t s o l i jO t t n : f i t t P r O i s b n i s 0 1 . 0 0 . ft r o q M i t 9 . 1 t i s 1 4 . * * to a y . i v i in 1 4 .0 0 4 1 * b e f o r 4i n o s e s o t r o O k b . t o l p O i r t i * l o : e o 1 4 0 1 0 P .A k t a i l k t 9 r t t n t a l t k t h o O f t n t i o n k i f i t k t o rR 0 . 1 p 1 4 1 1 . 1 f in ) S i t o o r t s l i e o l d l i t s c a l o g n i n i t f o r t o t * f r h a i h o n t t n i c n o s- p e g lo r 0 0 . 0 0 e a f t 0 0 E 0 4logottant that. A n O l a f a i l l o n o s o 4 0 1 0 : 1 1 ;standatikahent*y lotogdry i f i m p o r t i a l i O a n d c O r n i u n t .1 7 . - C F A . g 2 0 . 0 . 7 3 5 - 2 ,T h e . C o n d u c t I t eg u l s t i o t e s 1 . 1 1 1 6 8 -onnerCO nnniasinit entplOyee l fromappea r ip i txf,pre t f ie aw n'0.04 i n : a ,representative capacityina:partiettlitt matter in WhiehtItglVirgeip4r4 pwonally 4114.010440:04 wIAle a u , ,44 0 ) f e er O r 4 .:pc/odbleitheriNleItyo y ears. 17 C . . F . R . . 4 . 2 0 . .7 3 5 4 < i t a l i c s 2 E 1 4 4 6 A sin* inlresitioation is ;presumed IniOlonttingtiCitiginlaft f o r a t l o a a -twoyo,*imgm otive pfohanpi &Oho i s o o m , 1 4 1 . , .mita i s d e f i n e d a s e d i s o r e t e a n d i s n la t a b l o i r a o s a r t i o n o r i t t o r t r u s a o t i o n s b e t w o r n

l a d e n t i f i a b l e p a r t i e s . " .i . 1 1 6 . 8 . f lu t t e r s t a t e s t h a t n o v t a i v e rlegranted if - t h e p r V 0 0 0 dtexoientationWeti ld c i e n t e a s i g a i f it a t i t a p p . o w a t a W o f i n i ii r o p r i 4 1 y o r i vO l a d o t h e r w i s e' a d v e r s e l y e f f e c t t h e i n t e r e s t s - a i h e government. 14.The COonytis ion'sstaff :ha theohligation to continuously and. diligently ex am ine anal'uiv g a t . ir o i wg s of sgpritips fro* as set forth in the :Com m ission's Conon o f 'Ethics_ 17 : 2 00 .50 , ;eq.' Th e C4iO n of Mk s States . thatItIt is ellaradotiWP O f O m a d m i n i s t r a t i v e ,p r o c e s s 4 1 4 t h e I f t i g g i o r so m m i s s l o n w 4 ***too in public d oton are fiffectod b y .h adW oe condoeto f the sot potiktitarlYtheTraeSsiorcal and exautivonloploom r -CZIL , f le x t e p "H i s lb e p r d r o y . o r t 1 1 0 - 0 . o r n m i s s i o n & A -N o i r e :t h a t e r n p lb y e r ism i n d t h e p r i n c i p le s i t i t h e Canona." Id .- The CatiOnProVidesMn administering the laW,inetithers . 0 1 t h i s C o n t n i s s i n n S h O n k l

vigorou sly enforce- com pliance w ith the law by all persons affected :thereby. 17 C.P.11. 2 6 0 5 5 .1he4anon a l so .that" .m em ber should nothe sW ayedby part isaderoands ,clam or or c o n s i d o i n t i o n s ' f fl o r s o n a l l a o p u l a r i t y or notoriety; so also he shou ld be allow Oaro n A t s t . o r i t ie t w i . b y A n y o n e . " 1 7 C E k 2 0 0 5 8 _ T h e C a n o n . . f u t t n o r s t a t e s , : w i n o n b e r s ix o u l d. n o t t b y h i s eO ndubt, perm it the s ' L, ;onto p revail t h a t n o y i p e t t e n c h i n i m p r o p e r l y : W i w i :i r e. h in i . , .! o r .t h a t a n y p e r s o r v u n d n l y e n v o y s h i s fa v o r o r that be iS.Ititeeted It any w ay:hit -the :' . 1 1 0 a t i P I L ; pl ig iem ac ingmeorni typer so&w I7 :CF1t i.*8


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T h i g l la c a m e a t i sg a k e t t t4 t h a p r a v i st a a i o f t h e P l * e f f i i e t a C 1 9 1 4 . 4 i rd0 4 4 6 -A s c u r i s a i c t o l l e f d p a r t i e s : M a y e d a r t i t in : t o s i it t:04 4 1 1 0 e a l e d ' h y V e l V i O e i f i l f i e l p e k t i k 0 4 0 c r a g R e c i p ie n t set tins repattshoilikaat illgs0.61.4144.9r coy It *kat thigiitoeCtar O ftterat'sivplisvat. .Results of the Investigation

. ..ackground PuidingsA .lliedorpor at ion -X .Nig o f t h a i4argept and IVIost Prtiminent m csAwrc l i * tosge 0 Meia lkAi l ia f f ieVit iV?9 00*41teacliwtetett ia - W a S h i n a t u l t 4Onenfthe iatges raut i i n o a t blicle l n p M e t t Ec a r a p h i e t . T i t ia s e f i g t o f T e s t i m o n y : O f (b)(7)(C) t 0 0 9 , a t t a f tdh e r i t c . a s E i l t h i b i t 4, at 15;. Transcript of Testimony ofPh identifiectStitior Official in InvestmentM anagement ("S enior Official Tr."),; September 11,20 :9, ettaehecl hereto, as Podilhit 5 a t 1 1 4bOok at 41 A business developinerit company ( " 3 r I c r ) i s a c o m p a n y d a l & createdto help grow small companies in t h etages of their developinent 'Ex hibit B D C s w e r ecreated ina19$ 6 amendm ent to the luvetment dompany Act or T o o ( q 9 4 0 A c r . ) .. id TOq u a l i f y a s a B D C , :companies must bc - registered w i t h the $P..0incompliance w i t h $ e c t i o . 1 3 4 o f.4 10 1940' Act- txhibit 7 A m a j o r d if fe r e n c e b e t w e e n . s ROC.vtatore c a p i t a l f e n d i s t h a tWes allow smaller)non-aeoredited Investors to invest in ,stgiop companies: :S reehttpg/wwwinvestopedia.cOnt...(b)(7)(C)Arco riling:DC.slateof regiSte milli d e iifikfij.u iirrelare i i y PII-I fiber'. BDC.6 0r. at 11. (b ) (7 ) (C )Vlained,13DC e by their very nature, are akinto either privateequity Or'v e n t u r e c a p i t a . ' - t y p e O f f u n d , b u r i t happens to hen registered:fimd. T hm .& invest Inilligiud i n s tr u m e n t s t h a t don't trade." ki at lZ T h e r e f o r e , a c c o r d i n g (b)(7)(C) ValtlattrailiSoften an i s su e b e c a u s e o f ih e nature of dieir investments: I d ; at 11 . .Allied's securities are registeredpUrstutOt tO &Won: I 2 C 0 o f t h e S e c u t i t im a c h a n g aA c t o f 1 0 4 ( "E x c h a n g e , A 0 ' ) . , P a r b ib ) l 7 A e e l a W n l y $ M A N I A * m i re d t o m a l c i t :p c d o t l i efwittleMe. 4coriOnS Alfieri 1 3 1 )6ra tetW OCH IBPS$101:109140Pt k f i n w 4 O p i t a l t o c o m p a n i e s t h a t l i a v a n n i a r t a c e e s s i o I f t g - t e r t n : l a i e s t m e n t g a r a t a l . : a l t d,b t l ie t t l e e d e d t e s e u t e * . " littpdtWwiit.alliedeapital.Coldwh011ideplatforntinsp. Iii addition,: A l l i e d provides privately negOdated tiebt and e q u i t y fugulOng:tu *ale 'market compathes,with a ptimaryfocus on p r i v a t e f inance E xhibi t 7 Allied Tither d e s c r i b e d :

'3 D C A r g o l a t i o n s r e q u i r e th e B D C .. t o -plaint* a Conservativecapital structure, lintiting.thoam?ant u.fmeney it1413Q 'may -b.ottow; *vid e tamsparenOuwestors t h r O u g h . P e r i u r f i c p o b l i er e p o r t i t g ; a n d l in t i t t r a p s a t t i o n g i t v i O i a f f il i a t e s . M 1 ' % a r e a l s o


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T htiOptraisi0.5444d i g c 1 0 1 4 6 g400 ic ts .118:40 W M 04 l is the iVi it toi lop eek ir ckors: itgesp..nott140414404 0 . 1 e P O P Y 1 0 # 2 1 0 t o t i t t r i z i t t w e c t u : V e o .1 4 . t %raviirettompanies kky.effcting Managerialad ice andother nesou tter ..ht tngiwwwal l iedeoPimizondwho/bdepla l for in isp-:According p a A l li e d , i t v a t a . s .f o o n d , e d i n . 1 9 5 8 . . O a a s m a l l b u s i n e s s r i n A s b n e a t e M n p a r t y )antLho kA naneedtto nsandtatnit t l int i thnid4le . t t iork ettott ipt i t t ie t inft lIni tedStatet . Id. M .the end linnet 2609, M t p ortailictinoluded iniAtestments in 92 different com panies 'V tat..gerterotaggnate .mutt ig :Fgvq;01.0414 0 K O X i M a l o a y $ 1 0 t e n o n 4 1 5 0 . -Pi mloY-more 00 4000 paol i ke lAcco rding to glahO rA'in 2064:Altied dociatit itsleas b a y * a l a r i i/ a t O r l a i n c A P I N C 4 1 . 0 0finelod.ing] :investments in over WO companies 'with ngrapte tavatuos b ite M e g d $ (O lt

billion, -su pp orting m ore tban.100,000jobs:" . EinhO ra's liook at 256:1 3 .v e n T h o u g h R e g u b te d b y SEC as au Tnvestm eif iCaM itinnyand C iii .us idtred. : B i . hlt.isitB"DC'a . CnnldGnVneiutmiited rot Stveral l i tenrt ,,A t noted t ibot tn qualifit .1 AJAX* torilpanie$.._P S l ie : rgg is . t erg t *l i the SE C u n d e r-h e. 1 940 A ct. . ft ibit 6. , l il lV o . a r 0 designed t .0 4 c c O l n a l tA a r o p l in k . 4 0 / 0 1 3 .4 04 4 v g . s . t i l V I A s a ,Ehey have *el" o m a k i n i i t iramework and tiO ir oNVIR MiquolAsge,sq Solor OSzIalT x . -at 1 -1 6 .. .. . A v e o r d i n g y - v i e w p t B D eo l eav e r y en q , ofd ientis an ta ireetnent .c A s e waiting to llepppi", 064. Yet , O PTi dO es net auttently have . y g t a r t i r c eattributing riskprofiles' . Nrestinetit companies; onty investment adifitora: 4 /4417. While -th e C o m m i s s i o n ; has resisted assigning tisk profiles far-investm ent eorap anleaas f; ... . . . . A r t s t c i a e i r t viso m t.t.o.nOiritt1,4 sit thit entritglikdon.e0 f t s i d b r pro o . b e h i g h ris k

a a '3 )(n(c)w o -. T id y 2 4 , 2065 , auk i , . . , - , - , lis.athi t g at1 1 . . .. a t 1 7 ; : n r e a l s o S e i g C l r O f f iP i a t T i-a t 101 ACc9g 141g ( b ) ( 7 ) ( C ) a m : 1 0 1 1 T O . a r eh i 1 g. eo4lidercd . aa a - , :t h e re I a . 9 .1 3 1 4 5 1 t k o w w w O w s We a :i r - ore lo ba examinedthe 8 :40. mai t.. At 17,. TiteraOroi acCO rrt ing (b)(7)(C) )3DCS c a n go more ttien fiveYzar$ wilhou . - t r i g 6411i i i i ted. , 5 4 l a T O : . (b)(7)(C) :a

7.

.S e e a mTO "R eview otthe Copun ission's Proces,ses f o r $ l e n t i n g Jo a n n e * ,Advisors and Investment Com panies for Examination." (November 19, 2000, ivailaiile 4h t tp : / / w w i t see-oig.goviReixestAnditsIt ispectiend2009/470.pdVb)(7)(0)d i r e & O s h O t f u rdk i e r v a t io n t z r o l tt R I t . h e C A U S O -BlIgs areor the.maiketplac.e and onlyalibett, small number uttharehlders.o f 17. A Senior MOW lobe Divbiowlrhivol i .na i lt :1400 gemen t_Mensvameoelstatedilitt lavastmeat k a n g n i e n t=Mt oftiumno: W ogs relatedto M IC4 , giventhe ir nuniberand tiies c o m p a r e doth erinvestinertroo m paniet. Senior Q ffieial Tr. . at 17.1 0


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1 : 1 4 . 4 1 6 4 1 f i x c n t i st t t h e f r o l it g i m s o t t l ie P f ir a Y A t t - O f W i r . f in d i p t y r e g g i r e a u r a c t i e n lab*di.sclasure M ini -patties, No rettnetion tar been fierforntedb/Rie Once 4 4 Inspector General: Recipients. o r th i s l e p u n t s h o n k l b e t W i s s e n i i o n t i O r e o p y i t w i t h o u t t h e I n s p e c t o r G e t t e r a r s u p p r o v a l . .C .aluation alnvestateatt. a P C : s tU : 0 s o q u i t o 4 l o v a l u e e a c h i n c I t A b a t i n v o s t m e n t o n a quarterly bas i s , See Pa l *- A s a 0 1 : 1 C , - A l li e d p r i m a r i ly i n v e s t s : in i l ik o l d s e c u r it ie s : : W W 1 l a O k r e i c t il y m i lu b l e marketquotations.hen tnexterqu.otet icinsem notuadi ly iwallabiejun ds met . wiluevottfoliosecurities end all. other toots by talk vaitio a determ ined iii guoilloitit by the beadd i r e c t : a - s o f t h e . f u n d s , p t u t u a i d io - t h e r e 9 n i t e m e n t s o f th e 1 9 4 0 A c t a d S E G guidauceissuodt h e r e u n d e r , a s w e l l a s g e n e r a l l y a c c e p i e d . .a c e o u l d in g t i r i n c ip l e s e i lA A P ) a n d t h e F i n a n c i a lA c e o u n t i n g S t a n d : a t i lt Heald tedinfithients.A c c o r d i n g t o a Senior Offidal *the D i v i s io n o f - i n v e s tm e n t M a n g e m e n t t h e t e4 1 4 4 e , o r P l e - b a s e d m i r t h P 4 0 1 0 w i t 1 1 4 1 ruttl.5'ee 1 ,4004a w e 0 4 ' d C ie r nil*** v41 'OfficialTr S c a iet 8.344. The ConuUissionhasissued guidance in to r e l e v a n t A c c o u n t i n g $ o r 1 e . v .Keteges C.ASR ")::teletedp fair value-ASK I m andAsa ink adlibits 1.0 IL T h 0 0 0 1 0 1 t swere isStiedin t9970.evebASK 113 Ade s,g e 4 e r a : p r i n t i p l e , the current ildtwalueoftesuictodscOuritiegv t : 4 1 1 . d e p t i e a r to b e t h e amoun t ivitidlillie o w n e r k n i g h t r e a s o n a b l y e x p e c t t o r e c e i v e f it t h e wu p o n t h e i r c u r re n t s a l e ? ' E x h i b i t la It:Conlinnes, 'M ild depekids on t h e i r in h e r e n t w o r t ha d j u s t e d for any.clintinution. in va lue resulting from the restrictive teatime!JiL AR 1 1 3cautions companies ozaiastnqi .rtzan "automatic fornwle to d e t e n n i n o value, 14 , :AM I : 1g- s t a t e s t h a t n o s i n g l e s t a n d a r d e : O s t s . fo r c l e fe t t o l ti in g f O i r v a l u e o f a s s e t s f o r w h i c h M a n k e Aquotations are not r e e d i t y t a v a t t a b l O ,, n n a t h a t t h e b o A n I n f a t o c t o ts s h o u l d telllowa p p r o p r i a t e f a c t o r s re l e v a n t t o t h e i r a I n e o f t h e : t eetintitSt PAtli ibit 11 Ia 10.5.90: S aid Officialin investment.Management Vifittdia l e u c i t e i h e l n y e s t r a e n t . C o k u p a n y t t t i t t i t w o i h i e h stilted thatAPR s 113 and 1 1 8 o o t t im r 4 1 t o w e li g g t i l ieviows , dike Commission i i i n t e c l t h I h i r v a l u e' E x h i b i t 1 1 .T h i s current-sate Valuat ion test be man is between Ai l ied and:E inhornissued a white p a p e r , -v t i i ii e h E i t il i o in w a s highly C r i t i c a l 0 C : entitlek"Vaitratfon f 1 1 1 i q U r dS e c u t i t i o ll k t i c y B u s i n e s s Deve l opmen t Compan i e s " Exhib it 11 Alliettleok t h e p c i S i t i O r a i lt h a t p a p e r t h a t t h e applketm Q M* k'altte by a )10 C:for:its i lliquid portfolio is D i/en d it6ulttnalign w i th th e p w i fi c : r o v i l l o t g e p t # 4 4 , 0 1 4 1 1 3 and la Allied staled, "The :conceptecemen t sale' f u r p u r p o s e S of40.1.eminingtdr value in AS K US i t diftlOnit i tt iot .in ipas ib le , a p p l y i n t h e e a s e o f a 000,t fpgroke.m ., Azoigmowdeoti4fgene ral, the 13134.pipanBiteineuMu#aistiatintd 'Policy is lemore:applicableto the -goittilia oraBptiamikei..voluetionguiilAnre s e t fbrt.yby the -SE C i t r the .B o t h t h e S c a l e ; O f f ic i a l t a n y e s h n e n t . M a n a g e n t e n t and b) (7 ) (0 )agreeihatotditional u p t h d e t l g u i d a n c e i s n e e d e d , S e n i o r M e t a l T r : f it -8 9 & 7 ) ( c ) Tr.v14: Investment07-1 : 1


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k- 'l it a k O c o r b e n t l t* I b J e c t I O . t h e P r o v i c i r ia s o t h e P r i v a c y I k e t 4 1 9 ' M l c c o t i a iw r I a t u i r e fo d e c t f O r t b e i c t oi ll s c lo s a # t o t h l t4 I 1 p a r l ie s . : N o t r e l li ce i g o t b a s t io o n p A c t o k t o e d h y g l e , 0 1 0 0 0 1 . 1 0 0 0 e t o r G e f t e g I L . R O V I c c i t : 0itel1410e0O rtaa Oot.4s*M itatO Of . cOpy it ivAinttOo*Pe etotalitieritr.f4410"" 1 0 ,4*0 1 0 1 t t h a s . P c o P a r e d many.tiraftS ava l4ation htterpreii:VereleaM f o r t h e O o n a t a i s s io t e at o n s i d e r a t i o - - -- A t y e a r s ; :h u t t h e C o m m i s s io n : h a s d e f e r r e d ; c o h s i d a t a t i o a ; S e n i o r O f f ic i a lL1 , : . , . -T 4 . a t i 8 & 9 1 ( b ) ( 7 ) ( c )t t h ie s t in e e t : M a a a g e t o n t i s su e d h : s e l e a t h i b Il o g r a O h y o n.titiaiiiii '0r S heiclh$frekistered investment tompanle,'S kart 'attem pt to lilt id the: g o p ' s:,until U pdated guidance can be issued. Senior Official fir. at 93; Ex hibit 9.i n V e s t i g a t i o n ,s .

A l l ie d S r g e d 1.40$16P t o W o e_ atigata -l a l i o n t a nd h i s l u s t l tFuneGreenlight eking, Withraort Wido w tit W raftdoing After VitlibiOneSIgegailve, Speech About:AlliedLinhorn's Speech -.011M ay 15; 21)02, *horn gave aSpeeeh attire ha W . Solto. Research ConferenCe forcharity wirerche a n d Other portfolia-mnirgers w ere a s k e d to share their most compellingi n I f e a l i n e U Xf t iliztohgles the oomph* videotaped. s p e e c h ) . . 1 : t u r h t o h l a - s p e e e l t ; E inhorn desedbed livhllte believed Allied S tock would decline andGreenlight Caiiital h e l d a s h o r t p o r t i o n h a Id , $ p e e l f i ta l fz - E l a m e x p r e s s e d N s ' v ie w t h a tAllied b x f o n h i n b e r o f I m p a i r e d i tt ir e s t a i ta l S 4 h a t i t it e l d a t i tg l a t a t t a l u e . ,wh i a resultedoverstated results .3inhorti concentrated on its Valuation metho dologies fo rportfeliOinvesunents. I d . .

.0.4*Ith.9 apacch, several in the audience wete on their Xilackberries, although when4*(4 about tbi inhis SE C. testimooSr, E inhorn said he d i d n o t realize this. Einhorn's b o o k a t1 6 1 , E x h i b i t 1 4 a t 9 7-8 A c c o r d i n g t o E l o l t o ro , t h e d a y a f t e r t h e speck the WW 1 York StockE xchange closed A l l i e d shares for trading because there w ere so many sell orders it c o u l d n o topen triulivitt anerderty.gialloo- Eboth'sbedat5. .i o l v iz a m o t e s o n In s welisite relupddixfaia:book,' c l i t h a t , f o l l o w e d w a . s . f i r e s t e t n i o f t o n t r o v e i t y - Allied responded . w i t h a W a S h in g t 0 1 1,144e414job frAttackilla O j o h o r n 21 0

.d i s s o n i i t a f i n g l O r - It a t h a a n d o i t t li g h t l it * R a t h e r t h a n p r o t e c ti n v e s t o r s b y r o i e v io g r i ih r i o n e s w e l l :d o c u m e h t e d e a s e a g a i n s tA l l i e d , the SE C tthebehest o f t h e p o l i ti c a l ly c o n n e c t e d A l l ie d :instead f a v e s t ig a t e d E i n h o r n f o r s t o c k m a r d p o l i tI o o . 'O v e r t h ec a s a l b g s ix y e a r s , t h e S E C a l lo w e dt o . m a k e : th e p r o b le mb ( ) ( 7 ) ( C ) . ( b ) ( 8 )Ti: he 2064: . . . . . 1- 4, 1 2


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This:doerottent subjeetto the:provh ihm s Oftire Privacy Arta 1974,, end Kay req ularredadiendieferedisclosure M AW p arties. NIA redaction.hisbeen perform ed by the Office.efinspeetor Georx eft- Becipients.orthis reportNhould oat dissemiatte.oreepY it without.thelespertorgemierers appra.akb i g g e r ' b y uppiaiore thantadmin additional s t u c k u f f e -t i t i g stha.t relied oV er.S1 bilifork.frorn . i lewb t r p - l iw w w i ro o l iE l g t o r t ie p e c i p le . a n n This Wee'Cli E i B l i o n k s o t P I T ' a w e l l - p u b l i c i z e d f e u d h e t w e c u A l l i e d o d s . E i n h o r u t h a tc o n t i n u e s W O ; . S e e , . 4,..Februa ty3., 2007 Forbes M a g a z ine , "Allied Capital's B l o n dA s * d i s c u s se d b e l o w , toople of W eeks after the spe4A. E t a l i c i r a t,o l t * ted the C *e l ep1 ion -and then in w riting .with detailed allegations o f f a l a i b y A l l i e d . At t h e s a l u $ 1 : k o r , A 1 1 1 0 4tuteessfagysoug lit a m e e t i n g v v i t h .s g a a l it i a is i o u r g e a t t E t i fu r e g a e u t i t i v e s t ig a t i e uE m h o r n . F . u f O r t e i t ic i a a h r i o s t it u n e d i a t e l y b e g u n l u v e s i lv t i n g : E l a c t a t e l a t e a t o speech '.aborthile the agency did b e g i n l e n g t h y eicamin atiOnot Alliedas a . resaittifE inhom'i allegations, it took Enforcem ent-another two yeatS before beiginoing its initeStigaticiaof Allied_

2.llied Stepp ed U p its Political E fforts1 Einhorn alleges-in Ins h e c k t h a to l i ti c a l ly c o n n e c t e d , l u i lu t h i g . o u t t h a t A l l ie dh e a d q u a r t e r e d o n P e r a m i tt u n i a . A v e n u e i n WC .- addition E mliorti statedAl l iedhad connections to the SE Cb ) (7 ) (C )I w o r k e d for the SE C,:( 7 ) ( C ). rotintt S E d . C o t a n i n i s s it a i t t i a t e s e w a s a s e i i o r a d v s o r t o . Allied. E rnbodk tt2$5263:. Elnhorn. claiinsihatfacceleratedits political effort?' once the Ac, invesdgationof Allied began. td . at 256-Accordingto E inhorn, Allied b e g a t ! : apolitical action connnitnte ii 0 o t O b o rus tfour nionths after Aired m i n c ed sRIM111. ear an investigation ofit, .E inbora"shookat2P;T h a t sa m e w o ngistered.as Allied. Exhibit.15. AS E' S 'r a tlit h is hue 11a d n o t b RailiOnt'S book a t 2 5 A t t h a t po 'gas a. patine; for the law i I enable; accordltm to V et la f le4 website atlice Iheus was t o 4 4 4 -h r i s o n p u h l l o c i a m a n i M s e e m i r a t l e s i r i d u s t r y . w a o s , S k a l l 4eats ati,matters ofsccprities kw violation an d con lAnce.":.Exhib it'M In.a d d i t io n , A l li e d h i r e d L a n n y D i v is il b u t t e r W h i t e E l o u s e c o u n s e l f u r P le s i d e a t O i lt e l ig o u r t o 'Ode Al l ied tiutuagegiout d u r i n g t h e t i m e * i t : E U : t h o r n ' s s p e e c J m Einhoras b o o k t i t t - $ 4 . . i rhwTranscript of Interview o

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About .04 w e e k M i r h i s a b o v e 4 e f e t e h t e d t o te k , E r a t h e x t t coM atiedtheOfficial 1h:hit/esti:Oat M anagem ent brelephone" geniorOfficigilll. a t 42. The & h i t t -0ffieial,test if ied he reeelvcdtli lActilf tronjardroieogt rrf the M oe' Id. at 41t, rtolbgth at r u s t call,aixcnt-$1 .1 14 13 c : w a n t 4 4 1 .to tai t o h i0 1 . - A b o u tttd valuation. .t.c44tillZ T h e S i d e r O f e lp i a l-t o ld E in h o m h e .could nca talk s h o u t A l l ie d , b u t that lie would-be glad to speak to him a b o u t h o wvaluation is to be done under the InvestoiOnt CompanyAt o 1940

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.4 .iccOrding:to the S enior Official Einhortivalled back shortly thereafter. Id . ati.S e n i o r Official recalled that Imhof asked if it was ahight If the phone call were recorded, andI . 'he S enior Official said he agreed :16 .1idifilit the ikeV eitiiiiim Itcoidati. IL Einhom thene x p l a i n e d he knew the. Senior Official mild not talkeboticAllied, huttet ; he did want to talkabout v a l u a t i o n *464- ig '701..0440T 040:40 , t e s t i fi e d i t w a . . 5 . :c l e a t , O n I to .m . 'w P o t e c ilo 1 4 1 1 E .about-Al: .Itlidretthink he - t v a s j u d T h e o r e t ic a l ly i n t i t o t e d i f a v a l u a t i o n h yithieStmeakbropimles. There aren't to e many people ou t thereinth e - world that-vimild do that. I could put bee and one - tOgellietand ... figure out h is interest in Allied valuation.V . at 4.6: . , s P u k i n g d ie a d v e r o . a t io n , E i tt h e tu a s k e d t h e S e a l e r O f f it ia l ? W h e t h e r th e 1 9 4 1 A o t e n t re n t. fa it *du e : tes t*** be u s e d for muftml funds Anther. than BDC S w hich bold algid SecutIties:23M o b o r a b o c k 4 7 9 4 0 A T he $e n io r (g rv ia t Pe tu ud e d , 1* . o s t e e " 440 :41 1 0 6 1 1 t o g iAnin it sa fl ie w asow ato t44 - to . td -v idka t i a. s geh l t s liD C -4 h ave argu edb)(5)16. *.


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400.10.10.4441014;itaboa,y 0014 oed.iictioit lorto.1.1*110arrelo AlnLprtLes o re4.400i tow becorpott'onted by thevirigtot taspector0 0 4 4 . 4 4 _4014dot4isuainater copy icwitiootthelospc.ctor00 .000 :opltopvall.h lappr w i t a i - t O ra W i . ta vah ie l i ta i tt v ta ig IV S I -Oat. d i fund would expect-ta .pi:tor it atgang P -Oitit uttho.fotlgo because the appropriate standard is 'what Oft you get for tOdaYr"- E i b b , o r n responded , m i g ht, b u t ommen tary, their response would be took nobodyever 64U:these loana.and theta:001e anybOd y evet - ella these . loabS Vil tudiey ' re i ti&mess or when the nAtierlsiti financialdis Cress atidlits tb tondatta fife tit"The S eater Official repl ied, " twotild saythstwO uld beil l .the More reason to hold if at . IOW &value teedisethaes what i rs Avarth.: :"IL A t the en d of that - 411, the Senior. Glacial testified- tha t I rma* * W i n was say i ng w as t it was 4. 'wqrAbr of tur thet inqu i ry by the S tai' A l. at4047 -

, InstafterthatPhOneC a l l, on May 3J , , 200 4 E i nhor t i . hegaz writ ing to the s c E C w i th f d e l a i t a l ,com g*gsl ito l taiectr Exhibit 24 In a% F o l u i r n s e n t a b o u t a , d o z e n l e e tt e ra : T o t h e=. awl M gt t v v i t e . v i a l F r i t t ra t t i e ; a t : s t e tind d. luh itZS Intha t titat 14 00 'A t t i r i = e 4 to the Sen icir Official, E i n l io n i i V r e t 't e , f l a V e d r e ' w r i ti n g t o c a l l y O u r a t t e n t io n : t c k e e t t a ix idisc ioil i esauu l lecout i ti t4#eut thet it s by A i led. Capi tal Corporat ion C AL M & awe bel ievea r e w o r k o f i tives tiOi0oe E xhi l l if24 . I le Ad ded , 5 10 summarize the rnaba point, we bel ie- liethat AL D does -n o t O O T A T I Y w i t h e T A V O , 5 1 n .l e 1 t C o m p a n y A P r O f no, 1d zxozggpr93400.aPooliOo examples of its investments and h i s 4& 7:#i410144gaton owm *1 r a n d g i ta o h p i l ib 4 l i o r Awhite 1 3 4 9 , F o n v a l u a t i Q n o f i l l iq u l d e p u n t e s . i t h o l c l ,, a . N .t a y 20( )2 1100 ,1 I ,y uch r epor t -0 .0a l o o k a n s c t i p t i o n of au A l lied codetenee cal l , am:mother th iugs . a The SeniorOfficial. testified he believed h e forwarded to ocie,ond En forcement- Senior Official Ti. at 47- -: Einh orn sent tWo m ore letters tie. the Sen ior Offititd. in:Iiivesenent M anagemen t. about

Allied . . 0./4 34200 2 and tuiS eptetubo 1 2002 . Exhibi t s 26 & 2 7, la the July 20 02 let ter toThe S eolor O f fi c i a l , g lo h c I a a c i d r e s s g a . t h e r e c o r d e d conversation be h a i l with the Sealer Official,s . . since All ied expressed coneernaboutthis cOnversatieu. .E xii ibit 26, Inad dition, 'Einl iornadages.* Allied's white paper . &missed: above, whleh :discussed why SE C f a i r value!am :14411 4,04a* should* aPPlYtti A BM SitelitisAllicit stat i f tg , ."Enhotoloi i tof;.Current sale for fiUrpoSet of determinin$ fak *t ie I I AS It : li t ISPZ & M ance ' i s .d i f f ieu l t , i fIot impOssible to apply in the,case ora ED O* portfol io" .14, Again, E iohornatt4bedseverall i i 1 04 4 F 49Pt41_ i n c l u d i n g t e P o t t l I t V a r - F A Y O X O C u l i g h t Ospitalealled i. "An Analysis of All ied .i - C A p i t a t : ; 9 u 0 s t i o t A a of l /awl:Ru t reelinique -1 4 '.F l i t t t a t i W i t apparently h a d been posted onCritettlight Capital 's W ebsiteallertlie S peech.., -- ,. -eatmber 2002 le t te r tO the ISea*Off ie ideoresge ,4 covenisalsciW aram . i tOth et - ' Milt% itteetittatifetel4ceoglistfiith Allied t a i d , d h a n g e $ i t t k A I l fg r o t l is d i a s u m t o t t la g & t e l go a l t i . .1 1 : 4 7 0 4 1 6 d i g w i t i A v a A m i ts i m i l, 4 ,1 1 i i x te -1 0 $ 4 w o r v a l v 6 , th m e o f i t s .5 1 4 . 1 w i n 1 3 .4 s k i * L 4 0 4 .k -

10 i V o n o t e :t h a t E h i h o t a . tt a t e d i i r d i e s t le t t e m s , 41 3 1 r t i l 1 (*closure Oreenlightbas a shortpos i tion InA L D tAlUed j comm on s tocle 84e co l Exhibit 24:

1 7


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he Invstigation W sS u p e r y is t d . by(5)(7)(Ctv-fi,., rt,..ve ar "`" (b)(7)(C) i . . 4 9 t o r (b)(7)(C)thrt:do4iiientS Allailettithapro.ttiOa 0111t ,Altia0.400.1P il, oud 1 40 tomtit* totrt.ttaeo 1410.te.glWanteth third patiltt. to redaction boo . been posottooti by the 0.itioo 014*ot:tot. Ottostot :It 'out 044 OPotto`bouiit,44t tlisotelltto 4w OW 4 40001-40 144 1 0 4 0 ' g e t t e t0 3 . 1 ' a p p r o V a t :

Express *MIX%argest investment and the second largestsm all busine,ssieralini ,0 0 1 1 1PanYier4tding$0Eialiont (which te had complained about in the:04410*sta. the SEC )EldribitnThereafter , : Eitihoin continuedto - send severalletters to the SE C with al leigetiemsagaiat -Allied to venous staff and officials at ii- 9 9 14 O ctober 200 throug h January 2008. SeaExhibits 2 $ -b)(7)(C)Siallont4eatt kttgrsin O ctober 16, 200 and December 12, 2003-.bit s 28& 29 . These le t ters were sup p e m e n t a l r e n a r t s . W 1 1 (,)(7)(c) Is A c o u t M O O C V S alleged"r o t t g c l o i i t s ,m p t i n gy i t h (b)(7)(c)003'e gixh ibit 28, IOUs ;sbiatiettertibout ob -go l o g f r au d 4 . /1 = 4o t (5)(7)(P) :Apra26, 20 044 "QU O toittiottes to raiseh.UndtedsofmilliOna of do llars -anew investor capitalthrough registratien statements declared e f f e c t i v e . b y T h e SEC , - -BetauSeAllied'a 'disalcoires.a r e p e r i t i ta t i 4 d . M i t h : in f l a t e d valuations and pettbxm ance smo othu tig, javai.tottiViliielyort t h e mare duped into overpaying Allied for its Stock?' Exhibit 30 Eirihorn added, "We, again, requestthat the SEC put a stop to Allierrafraudulent practices through foreefid and timely regulatoryaction? I d*re fo ltow ed W EL May 71 24041ei terkr e fe r e n c e d b e lO v 4 about B -( bh t e e -K r a $ 0 4 4 0 1 " S P t e n t fe :2 0 1)(7)(C)thle , ; and January28 , Z O KreetnenrA lead i i tti intey .lavest igeth igAmed. Exhibits Si; IX &e ptember 2004:Ietter:Einhoin raised theissue of his hotite telephone records being stolen. Exhibit 31 . li-the January 2008 letter,Einhom alleged that t h e "massive fraud" at Bis,X came to l ight anda BIZ ex ecut ive had beenindicted O n " charges of defrauding the government of millions Of d ol lars of Smal l B us iness Ad ridaistration("SP A To ans. Ex hibit 34 Th at>nrfi ty 2008 letter also. :al lege rl that -A llieri had-

repeatedly violated the sett lem entonler w ith : the: C om m ission,- discussed bokov.

(b)(7)(C)

.: , . S bottlY a llek Allieduertiollt ofrieliti$ atikte SE C io AxittAto ibliet4galiottorEitikOni li t1 A l o e 2i)02 the nivitio . o f : :e e t h e n t began an inVeStigati .,. .. ,.,t- A., -,_ (b)(7)(C) ,(b)(8)PuInW waFNz1b(7)(C,(b(8.,O r l Y X hop Una G reene& Capi ta . (b)(7)(C) (b)(8)(b)(7)(C).(b)(8)I A P e r k e d .t o g e t l i e r b a o r d o o t t ' a t e ( b )(5)(b)(5)t ,AO 4. ,2.1i1P-AbimnatterisamoOenerLinitialbtosamattetooder LuquitY CW")entitlee (5 )ut it was !Ater renamed,Re (b)(7)(C).(b)(8)xhiltas 3 5 A t 3 6 .1 8


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This doi tunO tis 5114Jfmtto thilfikitiOiciii$O f the l s d v i t c y A c t t f l . 1 1 4 , u n dr e q u i t e r e d i -e ( i i n t z b o o k t0;0040'4 th i rdo t h i d i o o l h a t beep p Arterite4 by ti* W ho oftganfttOo rke1041; g1/140o t h i i r e p a r t s b o b l it e a t i n t s o a t i la t e ht co py it WitilieidAlie /0,lieetO t 0.00414 4 Sq4.0.00/21,(b)(5)(b)(5)

u e d o n F e b r u a r y 1 1 . 2 0 0 3 a n n o t h a n a (b ) (7 ) (C)(b ) (7 ) (C )(b ) (7 ) (C)b) (7 ) (C)b)(7)(C)A C ite.410.11d6riggIS tat f iatatigat10102Ado : that h a , ( b ) ( 7 ) ( c )a( b ) ( 7 ) ( C )0443):04.v v V . E q P c i e - gE r a W 7 A N o t,investigation. Ex bott;Za..3(b)(7)(C)(b ) (7 ) (C)(b ) (7 ) (C)(b)( 7 )(c)(b ) ( 7)P(b)(7)(c).(b)(8) (b) (7) (C).(b) (8)teti as supervisor on ty,estigatign. During that tittle,pe rsonal difficulties, natl. Enfo r I Wa SPOt $atis f le4 v v i t h 1 . 1 1 0 j o bas discussed further be low ( b ) ( 7 ) ( c )s k e d by the Associate D irector0 3 X 7Mleave Etifordernent. TinnadAtt nftaititannyup s , 2009, attathed h ereto as Fi th ibi09:at

(b ) (7 ) (C)

(b ) (7 ) (C)

Vt unde r then(b)(7)(c)u n t i l h i s-t e n u r e i n E n t b r c e t n e n t e n d e dugu s t 11, 2009 , at t ach ed h e re to a s D a l* a t $.(b ) (7 ) (C)9.9 I 'working atthe Coniniimilon as a-vvas.przFrovit r t r z aw i l r h i p f ; Esfa a c em e nt,9...1U 101 9( 1 3 ) ( 7%., : s 1 1 el / n e s t orrdt i n repotted. to i 'A (7 )TransciiPt O fTegiroony ofl ( b ) ( 7 ) ( C )e Y 1 4 4 E n f o r c e( b ) ( 7 ) ( c ) ( b ) ( 7 ) ( c )rb)rst(7)(C) A S (b)( 7 )(C)b) (7 ) (C)( b ) ( 7 )( C )' t e i l i a n d lb g i v e te g t im a n y t O t h e 0 1 0 . .ime kw prep are it "Written narrative" respo nse to theA legetiOnsagninst :A n d despi te icpeated : prorn i ses proViae the w i t l l *""un l i fMnar r4 t iVvrovicind =sponse, m thibit puting the ores s e v e r a l n t r a n i p t i tnt e st i n m o n y o r a written response to ihentletatiOns Olantarliki n f O m l .a t io g r e t a t e C I t i? P a r i t o r r o d i g a g o l a g i n g,b) (7) (C) r . ;a r e n o l o n g e r C O m m i , s s i o n e m p l o y e e sb) (7 ) (C) (b ) (7 ) (C) 19


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1 .

(b ) (7 ) (C)

.7. This document issubjectto. the provisions of the:Prhincy Act of 74 aid may ectinire rednetinn beibie:discinsurelo third.porties. No:redaction h,se hem performed ky'tbeiNTiena totPector Generale . R ecipients:-r t h . W i r P o r t ' s h o u l d n o t ( I b s e n : d a u n t o i - c O P Y . I t it it h n u t t h e f in s p r i e te r G e n e t a l li t* p p r o V n t se d a G reat Deg A A nt All ied D ewing Con. 00 o fvoidgatiton.,.c la im e d t o h a v e " % O r e i tt V : O h r e a i ,e t it in t i n t ' -grArri inn;tri oioftr. . . . . . . . . _ _ 2 . , . . . , _ _ _ _ _ _ _ _ _ , . _ . , _ _ _ _ _ th a t i ...t o ( b ) ( 7 ) ( c ) , ( b ) ( 8 ). i I 1 If I t 4. . : ' 'utv 'Cvc* wqw-a4lu W4f4W - -learned (b)(7)(c) i, e .. .ilea .. r n e d 4 great , 4 e a L 4 1 1 0 1 1 1 4 4 1 1 ., tt o nieellog w ttlyAlhedM elting ou t to S E C o f fi c i a lsJ. -. aithei$FX ,:as discussed below. Ilh e h a d n o i d e a Allied w ou ld b4 his eliedw hen h e joined.Ve.nable. Id. '\

(b)(7)(C),(b)(8)

Citifilbteli (b ) (7 ) (C)

(b)(7)(C)

'114)t114gS,6' la aliu ( b ) ( 7 ) ( c ) (b) (7 ) (C)(b ) (7 ) (C )D i e t W A

g h tprodins, tanom=let ml oils h as cop ie s . I Li g if t het a can a n d s a e . i f s o m e o n e o a npick them up today." & hit& 45.n P e . b r I 1 4 1 .3 t ; 2q !t o s sat h O M e d a n

(b) (7 ) (C)I tt 1 777 ; 1

a. . (b)(7)(C),(b)Walis.S h o w e d h is En ga ge me n t (8 ) (7) (C) , (b )]Engagement (8 )m a ts a h o w h e V a aa d t iV e ly t a g a g e d iit t h e"1 / 4 0OPOU)4 00.903,(b)(7)(c)1 1 1.!4 ,1 e r c i ) g /, I : i (7c l i (c ):-., , II o n y , : f p n oReferrinem m e 13 :014,,,;-,. 1 Iat NM iCe w h e n th ee s l i g a d . . . . ;.Ib) (7) (C) (b ) (7) (C)Pak**atien. , . $ .l O g . p : o u n t tu r nr d for hini. at 4a tt e d 01 00 4 0= M O m itthe e ase Was related to- p roVingm atiill anon in the o re& . - w in tum id,. titif gi v n u t e l i t h e -A f f i e d /6reenlight - a s P e c t o f t h 6 hivdtlitition. ter ShaAddef . t . "SOIA l iO k i t t (b)(7)(c) inial:h ad grea t p o ten t ial k ih i th h i t t th e i t h e q U i e k lk t ir e d p t i t- . O n c e . We 'st i t of g o t i n t o the case and.realizedit was not going to he a hu ge p ayelli he quickly check ed ou t." Id. . I n addi t ion (b ) (7) (C)e - M A T I 4 S h O W 6 4 f ir L I V a r il e 0 ie V i t it algi4svfrtili n q u i r r about llieusinv.esfigation of (b)(7)("(b)(8)Far mrasinni 0 3 ) ( 7 ) ( c )

iob ) ( 7 ) ( C )nqui reabout e 77771177557451471 -ini.gIPt s*They onikhdatycons ider ed thg MatkO trg tttellt 0i tt lO n t . 7 1 1 0 .1 e:irt aft I 2i - ; r e c o m m e n d a t i o n . Itt s h o r t; there:00 overlap with what we are:doing:7 Fshibit iakantir h i t t ( b ) ( 7 ) ( c ) g p o n p h a d j o o l o s d i n t r i 0 1 '1 3 0 4 1 4 C a p i ta P s t r i t ic i S M S of4044(b7 ) ( P )Wh en told ahonta scheditledneetinwilit Allied to 'tdiscusa'the Tal.%st at e m ents' de; in. the Creenlighttep o (b) (7) (C) p o n d e d , . V I I a t t e n d It can? Ex hibit 4 6 .i3c o r d i n g t o t h e S E C 's I n t r a n e t (b)(7)(C) u t t e n t l y w o r k s : in the SEC's ifew York .Regional Oface. 20


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(30

(b)(7)(C) ' a b o u t d r e e n l ig h t C a p i t a l ' s p r o d u c t i o n . o f .he had learnetahoutO re0Allight Capital h t t h a t -i x i r t ,

U t A lh Ito r 1:Ta -l i n 8 h e r h e h a d t i .l e n g t h r e c a v e r s a t i o n w i t h .learned C IE would be:(b ) (7)(C)t t i a lh e(b)(7)(C) (b)(7)(C)-I t h ia r l o c u m m i t is:s u b j e c t t o t h e p t a V i s i o n s t h e ' P r iv a e y A . c t o f t tO t i a a d m a y r e q u i r e r a a r * i t b e f o r e

i l l a t ts u r e I d t h u d p a r t ie s . N o r e d a c t i o n h a e b e e l l P e r fo r m e d b y t h e O f t k e a f la t t p e t io G e n e r A L ? t t e e i p i e n t s, o f th i s A r e p A r t s h o u l t t u o t t l i s sa n i n a M or eOpY k w i th o o t t h e i n s p e c t o r G e n o t a i r s a p p r o v a l ,(b)( 7 ) (C )In a April 9&drawnpoint Exit '

r t s p o n . d i nr d v i d e c i seelfidelly (b)(7)(C)(b) (7 ) (C)

33 .

001004414 the m atter lootwany Joet even ,e v e t v y a s a N t IT I ) t u t a t i e l r e d i t t o . ? N i ft y w h e n s i t ri ld n ' t. k g *like a f a s t h i t a g i i n s t Allied0heres no write up)- 0 1 1 1 Y d i d s o m esort ofreview , though its no t c l e a r t h e y r e -visited [ s i c ] . t h ev a l u a t i o n i s s u e . .Id .(b ) (7) (C) (b ) (7) (C)Tnadd41o it m a d e contact w ith aeolleave in [ruvestnientMatisgertettl ut,..70 :o t e r t r t a t a lhoak id ,* .6 6 W k . * *, on getting somegiffts im dnt Alkna gezu gnt] help. t p u t a r i e w c a l l 1 4 t o . 1 ;( b ) ( 7 ) ( C ) kanzingthouia g c e c p a r t in d c h i e!Opt:4W *M ontagesd. Thatn d e do n t a e f a v i t t] . s o t h e r C P t u n o l t s s i-O n P f 0 e 0 a 2 "(b)(7)(C)After feat-Urn&1 f r $h a t ; A i l l e d ' s : e p t i n i e l t o l d b e r -thaterl a d ; b e e p , e on g t h e comnanv overlie l a s t f e w w e e k s - to .iole;d,alk . o v i t t (b)(7)(C)1 1 1 1 . 1 i s u b i ,v s : t o m e : I ' l l(b ) (7) (C) (b) (7 ) (C)b) (7) (C)Y m ai Plan ning itet tim ttghti l ttou t - for Iheir teatiritoay of Bighorn:. Balulit.48.seeking further ' m align on O CIE 's(b) (7 ) (C)(b)(7) (C)< t w e e t s . v a t u a t i o nb) (7) (C),m ent ion it I - peak te ltomorrow." Exh ibit 47. In Ma' 2 0 T 6 l (b) (7 ) (c)CaPtfeazapPg.tP,n, Atflad in proP . a l a a n e n i a 4 onMay2i , 2003o n ofAllledf.arating, in part34 . : II. 0(b ) (7) (C)

I taiderstatid:thi (b ) (7 ) (C) 0 , 1 3d I t i l l y be (b ) (7 ) (C) 111W .hee n. look ing at '1 ,.. . an.c e r t a i n ; p r i v a t e l y - h e l 4,c o m p a n i 91 9 ei.e 9 9 .(b ) (7) (C)n Is ina l l attorney in m yb r a n c h , h a i re p o r t e d t h a t O C I E . is . c o n r e tn i n a n n g a * f e u d t o .' Enforcemente nn f o r c e m e n t o n t h i s i s s u e . - I t a l i e d y e s t e r d a y t o f in d o u t a bit - m o r eabouttP CIttr iview : and determ ine, theta* tgattiO s w 1lirelou . .- M odu li t e -ipxe . e z ; I s ic i W s 4 r e f e rr a l b e e n n O n t e r rr p l a te d . b y . _ you and the OedfrOxit effiee2 t a l t . r e f e t t a l midi? rd.opteeigte-a n y i n f o r n u i t l o u c y e t t c a n e u p p t Y ... ...,, ' '' -2 1


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f

W as dotwagutis nailed to tbe:m vielott i of the Priveiwketor; 19 74,20 ,4 m y require ttAUtidao bermalsetostareto Wird parties: No redaction, Wm beett performed by ilmOrtee.orrotgeetor 0004 Recipientsof psis reparts i tmddmot. t l issee iutt t i r copy tg *Ohba the lnspeetergettereittAppitita.loo king into two plimaryissues: (I) the w ay Allied determines'fait value? o f its.ho ldings. in. Titivate companies and (2)-All ied m ust ritiseibtirrtw f eapitat to pay o utits dividend.11..that O M is no t contemplating a =renal towen:teat at fids time.Exhibit :S O , .

( b ) ( 7 ) ( C )b .ro te: s t TiP.INirediMeniorandl im with ittvos ttgath r erhotm t h e ( b ) ( 7 ) ( C ) , ( b ) ( 8 ) lintir,$figgiOlataid.. I g, 200a repAred a 12-page detailed memorandum to Il i isVeri f isor--outlinitin the investitrAtive Mat) in the (b)(7)(C).(b)(8)rivestiotitiOn F.sthihit b) ( 5 )( b ) ( 7 ) ( c )( b ) ( 5 ) ( b ) ( 7 ) ( C ) Aggeeiglittbfratitatiiiitif Zlit l iok* 1I1 Test i l t iay

t inho rn appeared fo r testimonyat the SEC o n,May #t 9, 200 3. Exhib its .14:& 5 2tinhorn was represented b e r at the law firm Akin Gump Strauss D a uerFeld," and (b)(7)(C)of the'law firm tteMelte.ny4.1V1yetsor th eSE C, (b)(7)(C) atcl(b)(7)Pppe ite d.( b ) ( 7 ) ( C )Ir is um fispoteparti ,resent f o r of g inhopes two .daYs 'of tOtizoo ,O .Y-befr.0 the SEC, and was wive , . 4 I . : 0.w = id .oithetzt, how ever, te didnotlal teEinitoin's tesl iniouy; h o 4KA , , : . b)(7)(C) as resew .* e, or: t l iat and said he only "steppe'nr to ask '' .41 wits of oggregive questlims, -bit 20. Hoiaabit Oat in that 4 64inionYlvasto , gpt E i tg itgo to *twit W atten ipteak M ire . d i! , i ,e 'rice of All ied 0.00k wh en Sinhom gav ehis Spe er*in 2002 , as Al l ied h ad:al ,, ,, id i ia l l fa tthetWaimed po i to .have revievyed anyifthe'do pittneiits:prodliced b (b)(7)(C).(b)(8) 1 =poise tObe subpamasi- they isgaqd, sayingit Wag*Ondar4 44101'Am:we .-=. 4 tit;CeMent fOt a braudlfuhieft ir ie lyo njbe:Stair"In Cloteber2(109,,Zabel was appointed of of to erkainalf the S a i a t er nMOM of New York's MAO. S ah t c p i/us"tieer091Mitninaldiitision 'eraimmen22


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she believed ch ning_ Einborn's testimo ny

(b) (7)(C) (b ) (7 ) (C)uncomfo r ta b le w i

eached Qut: to SEC Oarma abourk A lli id t inattlavestigittion(b ) (7 ) (C)j 0 Gill't ".(b) (7) (C).(b) (8)servedas Associate D irector in Enfbrcanent m iltsSE C a f t t i l 0 ) ( 7 ) ( c ).ini(b)(7)P(b ) (7 ) (C)

(b). (7)(C) I n f t

T h i s d o c u m e n t i s s u b j e c t t ir t h e p r o v is io n s o f t h e P r iv a c y A c t o f1 9 7 4 a n d m a y r e i l a ir e r e d a c t i O n b e f o r edisclosurethird parties . . No r e d a c t i o n h a s b e e n p a r f o rm e d . b y t h e a l ik e o f I n s p e o t o r4 S e n e r a 1 ; R e c i p ie n t s .O r : M i s re p o r t s h o u l d : n o t d i s s e p i la a t e o r c e p y w i th o u t t h e I n s p e c t o r !R e u e r a l !s a p p r o v a l ,attorney w ho is taking thetast im ony. id.test imony Wake. Id .

( b ) ( 7 ) ( C ) didaddithe p nabably tore Al e i d e l k o f t h e . thihant test im onysho w s that it began atahout 1 0 am. on iviaand o o t t O n n e d a n t i l a b o u t 5 . 3 0 p . m . . t h a t 4 a y .i 4. T h e t r a n s c r ip t d e m o n s(C ))()s b o u r e d n p o n M ay 8,2003 about an hou r afte (h e t e s ti m o n y , h e b e g a n . questions vet, quickly thereafter , and cO ntinu- u ntil the co d o f that day atabo ( b ) ( 7 ) ( C ) sB i n b o r n a g a i n a p 13 4 ,1 10.4 9, 2003at *ou t 9 axai Exh ibit 5 2 . Once Ig n(b)( 7) (C)- 1)11ingbitpp eare-iat io t .p iandl thmedia teJybegan q u e s t lo m p g I M istayed -an I n . o f th a t day ' s .: te s t i n i o n y , uthiektoncluded a t around 120* ..

Einliortt coinplained tOthe OM *Out, a n d i i c i : I i t A t e i l a.4 : . - ' 1 1testimony he gave beforatheSE C In M ay 20.3 . t inhorn daf t n - .' 'confrontat ional" and 'verlaggresk ive in his qu est iOning at-Ei n u i,es book at 162 & T ranscript of T1 1". t.D A . g-AZill 112009 , at tached he re to a s Ex h ib it 53 , a t47 M Nt o m e t t w as over the top ( b ) ( 7 ) ( C ).% v a s s o r t o f p u t t in g o n a s h o w r o (b ) (7 ) (C) .. . - 'tried his0112 to j it se re hadi., ated; e stotDavidthe ttoeie (11)(7)(c) r.at4l (b)(7)(C) t e s t r a e r t t h a t $ b p - ) 0 4 - a lot of le 14that testunony, including thatte`did not assigther, had anor . m g late, and be starting tr i i-7 - i i n 8 bet about -vvbatshehad asked M ahandining the firs[ tire -alt- Id at 47. Einborn noe tween1estified before the O IG thatitaltanst.EltM a que stioning. Einhorn T r. at $0- (b ) (7 ) (C) 'r i 41 (b)(7)(C) mm; tes*DILY-( "Eitthoto Thl March 9,"a little combative" ander testified, "I though tr d . at 48.I q1AmOrgibagh a r d e s t : t o g e t DavidTinhorn didproblem s wiinadequ ate reasonI1 : 1 1(b ) (7 ) (C)(b)(7)(c)I 1=.1 (b)MDu nogthe devise of thet i v e s t i `-C.(b(8.reached ou t to Several officialism onteterit ornces t o dt4 .1-6 we re relpteato A llied, pthibita, As a restilwere b e i n g t a k e n r e la t e d t o A l li e d , : a n d t h e p o s i t io n s a t l i( 1 )) ( 7) ( C ) *the babe,n i ii n g s - a n d / o r a C t i n n s .learned w batactiO nshad andetent staff a n d officials h e l d about(b)( 7 ) ( C )

2 3


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I :( b ) ( 7 ) ( c )aillip,1e did not I Tb)(7)(C)lit That Some0titb)(7)(C) rat (b)(7)(c)a t 60-61dmittedhemaybaAll iedw as not engaged in wrO ngdorng. . 461. Addings t o r a . c o m panyus , A g e d inyaongd o blgve a fter , 0.010n. i t A ate. But.t h a t . a t t h a t p o i n t t h e r e w e r e " i s s u e s , [ S h o W i n g ] t h a t 4 1 4 .600 4d .be ivrongdOWt e d : t6 lan t

( b ) ( 7 ) ( C )(b ) (7 ) (C) i r e c o i 4 . s t o t t 4 I x i min inid4003'on Staff

4444ate 411;d14 ptes. Istottioetion kas boa perrototo ilyibe..oingwottistiffeter central. itecipiiimT h l 4 i 1 4 . m t n ie g t S a b l e 4 0 4 t h e p O t v i* O F W h o pl:blo Actor i90 ,xod m a y r e q u i r e re d u e t t u u - b e t O r e

kihis repottoonki i to it l i sSat inate 'o r topy w i t t in a r t h e t i s p e i t o r GesItraPi i i ikrova l .Id the OM tfat least one meeting(b)(7)(C)g h , th e y h a d p r o b a b l y fo u rI1 . 1b)(7)(C)(b)(7)(C);:

(b)(7)(C)

r a i s e i b o t r o w c a i i i ta l t o pay. out its dividend. Ex hibit* The e-maii continued, (b)(7)(c)S a iaidOCIE not exwealPlating.- - a . r e fe r r a l t o E n f o r c e m e n t a t Oa OM ? bu tas their get a beir handlebusines,s."14. adclitieni h e received extensiveco mommentsfrog (b ) ( 7 ) ( C ) regarding the diff iculde.s bringing a. case aga inst Al l ied ,onvaluation:Isaacs. Egldbit 48 . ,he 0 145-*s tilephOne conversations ivt*P m - h i st:the$E allowthai he 0ovem,h b4ween S taAaryand luneeyed Alitedw asnoterigagedin(b)(7)(C)(b)(7)(C)

to : $,(b)(7)(C)(b)(7)(C)

w haller Allied w as *dating tI t tw. In additioIith Allied at w hich hekd Ac o o p l iot o fiventeeliags with Allied. (b ) (7 ) (C )t 41- 1 (b)(7)(C)" The itivestigatiOnfottadabetit Allied.. SpecOialltaswiping . :. II It Ott I 1f Allied, y . to r e s u l t(b)(7)(C)t was u. .8)Chil i i i49 (b ) (7 ) (C ) t o * l iedhd.haat:leitstkt C O n V e t t a t i o l tAllied oni ., a n d found out that 00 E ' was looking into two primary gsues : , to th ewa y Allied determined fair value of its private h o l d i n g s , and (2) whether.-Alliedinust(b)(7)(C)a n d . minimikkingahout OCIraend .atoitt(b)(7)(C)

7)(c)

Al * .had been.,exarns. Ex hibit20ecall2003, after his t e s t t ua' onyn,u(b)(7)(C) 1, 1 6 (b)(7)(C)(b)(1id hini6 1 1 he indicated that I he retainedn...larinary2.9, 2001 an (b)(7)(C)Id 'm(b)M(C) ...Ninth routine no cause"oka s"6 Iw rongdoing. SinceE inhorn's testimony vva.s on M ay& Z it' 9, 2 ' took place in Iviay o r J u n e 200 3. As discussed belOw; clesrajz w(b)(7)(C)i c k YM ay 2003 the 0C1E .examiners had found evidence of wrongdoing

IQ IIONUS II II0.03 tut'evidence

II (b)(7)(C)(b)(7)(C)

ed .and that Allied Was not financing their diVidenda. I'recalledsatisfied Allied w as not engaged 'g c lo l n g & A g e05-told the M e. h i s notes showed led Min On JalgialY 27 ,they w ereclosing theirinvesragano .0 lied lieeause them w as lie -r O p e r v i a l i l a t i O l i of its funds. :1 6r o o k e d i f t h a t w ild have iecna more:accurate Agentwhether itappeared Alli Tr. t:ttcl. in wrongdoing,( bwhathe said and asked ) (7 ) (C )ad notes. ki ."Inalte in t e s p o n s e t o 'ined-Mt tOttealtom p24


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...T h i s d o c u m e n t i s s u b j ec t t o t h c p r o i ld i o r t s o ft h e P r i va c y A c t o f 101440 way rciptirAtagliin'WoO3:d i t r lo s u r e t o t h i r d p a r t i c i ; N o r e d a c t i o n h a s b e e n p e r f o r m e d : k r :M c O f t e . v r t a g p .e t tO r t A t a t * 1 4 c i l i k t i t s :a n d s m a r t s h o u r r o i t d * C r o i s a t o g r c o p y 7i t m a i t i t it I t ti 6 i i t s 4 e . r t t e k 0 . 0 0 0 0 $ t i l li i t t Y . 0 1 , - :

methods m isted tonvesbneint. bit 2& It Willie-t h e M Ge r eca l l ed tha . (b ) (7 ) (C)a s - w o r k in g 'W i t h I n v e s t m e n tM anagem ent on A llied A n n t n a t i .m a g . R a w ( o n t t Allied w ai. financing their d ividend s; fd .e = C o r d S h O W S t bndiscussed be low ; i li n o t . 1 7 ,u iv I Ifer. H o " s t a t e d , : . (b ) ( 7 ) ( C )t Allidd it145 kon2r111111.1 e re m akingiudiments vir ithou t d igging i n t o .m ere n t and asked t h e m t o l o o k ; i n t o i t f u r t h e r . iv

reinernbered ineednimithoffidal4 Ineindinxthe:0 "Itive,sintea . l en ien t and s ta feh t ; D iyiiionorr*ficet Regu lation; ou t , 111111 ldske i t ica teEinhorn ' s c ia lmsmhontndAea l a i r s A n c l i t i g s abbnt Allia a n d a s te d e 4010elieved10611 ( b ) ( 7 ) ( C )n blilliant'attil : ". .1 -4 n ee tth er'cite bplievnd

i s , and thatnot think . : t l i c y

i .. Accord ingE in h o r n t o p r e p a r e d o c u m e n t s fr O k t Einhoovihdlfund m anagers involved in the

Additional InvestigativeSfforts by ( b ) ( 7 ) ( C )la BO= o r bccuinento ,Subpoennedfrom rinfipm r .

i s o f i n i b r i n n k i o no o m d i e l t C4i ta lti *r. at,28 ,, 29: Infant, theyteeeived 13 box ei o finvestigation, Td a t 2 9 .h o u g h tmostsrgmlieard PoCtioA o f t h eedreenight:Vostelisfu i t h g A t i m a t i o n i 0441444* wiltk ikmert . :-.Wwiltien report .:As. reetting to waithe ,analysis .akmiinfonitis:h a t vas 4ritical grAllieds theAS lyity . *a s a : fr a u d u le n t c o m p ly . 1 4 E n b ib it 23 -.Aecordingto E i n h i o t o , , G r e e n l i g l i t C a p i t a l r e c e i v ed a letter on January 24 201)3 frond-the $t? advising that there wasan informal, inquaryand asked for 0=004 Capital t o p r d u c t s e v e r a l d o c u m e n t s including th eir research o n Allied; all c o n t a c ts m a d e t o th i rd p a d , * A t t o n i1 hied and their teSearchille ottAilied, all &di fritrAng mein*, an organizatitniaLebaikOntaai n f fi r i n n t i o n f o r al l *cCrIl l tb 020 . 1 4 1,t j o u n e R t z 4416410tharlIf ili00,104%4 list oftleir baa tat btO teespaecountk And the ' telepho ne n ) in I A O n e x y 4 3 .26 02 farwo rd; Einho tifteloo k at 14% olgolivrefie thatlatei in Epting2003O nzeilfigh t -Nal received ittnbpoetia for m t h o o e s t e g t h iu m And that doe nninl. 74 4 153. Wh omsaid the seeed4'4 149P01 f i o t 4 1 N u m m t s ,r e q u d g c 4 i n to m a t i o n c l a 0 0 1 4 c o m p o k it ifam atioi

on jraclingoroclitderivatiyos; c l ie n t P O O n a p t i o n r o w * , . 1 4 4 :, . .o r i e s p o n d e n e e w i th s e v e r a l .. o t h e r und's. I d .a e r . . e S , S f o = W O W d o n t l i n e n t l fr O Ma theW e r e V a l u a b l e t o Allied, nogg:Pinhnrrt 42-ated(b)(7)(c).(b)(8)


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l r l i t ' s l t ec 46 0 -e n triviteyAit rift-644mq*uliet*d00 , l et m d i s c lo s u r e 4 : 0 6 1 . 1 0 P a r t 6m , 110 irethietio)i b0P;u . pC ifurgAd bthe O ffice 6.t 'Spector G eoral. RerV iedtso this itieertsltoulditot disticajitatO-Orcqpylivithtuit tlie-juspettoriOeneiari approval.. T h q ' yMVP heAske4 :Or 90 Irait ingtwox4.at i4realizeee: A llied xlespegatelPAstAtetiPknow O t & O V A * w a s t o w n I z t 0 0 . . ,0101014.We:bigiatbitellAtilUOSOta.b) (7 ) (C) l i C C e r k S+au r itadil itti ieords. liedigahatt-teacsgto;hat -h ad relatitiolb Allied o n e v e r y to*. gothexe ate e-tnails from thef o o n e r e m p l o y e e W h o . o o n t a c te d u s , there were . M ots and lots ofeltaas relMtingtg ourer i t ie isnorAll ied , . inelor tf r ig w hat otherPeople we were tallcia:10 and ge t t ing idnInAtiOti from and so onand so to tal, And ail o f : t h a t -2 0 o k t b e i p ro x i o a ti o n , O w X * 0 0 1 4iltinIc would be inappropriate for :Allied to have any senseEiz in TrA t 5144 .

riatiitt riehtttaiirtedika ( b ) ( 7 ) ( C )b ) ( 7 ) ( C ) I * 1 1 41triblit l would considet to bewafiditraiht a n d proprietary i n f o u t h a m o n _his was a very hated battle. And they asked fo rlots and lois - a n d l o t s o f t e c o r d s a n d t h e u h a d t h r i e , t o lo o k t h r o u g h : a l l o t t h o s e r e c o r d s i n . t h epreparationfOrquestioningt34. According to Einhores counsel , . Zabe (b ) (7 ) (C )"would have had thefundocuinentaryvtindow into what trinhon4 was doing:- according 0. tinhorn , based ea the goestici I I (b) (7) (C ) a das`very cleat" jte ..1 t 4 d reviewedthe: rnateii* pro Yided iu reiponselO th e Subpoe nas,( b ) (7) (C)4 % 4 4 0tuanagv6p, anridng E inlunnilo .did not think they everzot Outt WO I 1 :Rol (b)(7)(C) tc.tit 29. - Einhoin :Mae i x ii ii ,5bO O k *h aG reenlight: t i tal. produced tegetal d tic tUtieuts to SE C in. retptalse to a subpoena they -received on.Januuty 23, 2003, including Gteettlig4Capitirs tv0.440 01 1 A l l ie d , tra .din# F40a s ; - al* oftheir;bauk and brokerageamien tvt tut4., ttleirtelePhon6 r e e o v d s " fr o m J a n u a

SEC Case No. OIG-496

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Transcript of SEC Case No. OIG-496