Fooling Some of the People All of the Time is a singular book in financial literature: a hedge fund manager narrates in the first person his own multi-year investigation into a publicly traded company he publicly accused of accounting fraud.
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Einhorn narrates his multi-year battle against Allied Capital, a company he publicly accused of accounting fraud. The book is simultaneously a financial thriller, a short selling case study, and an indictment of regulatory failures. Einhorn would ultimately be proven right — a story culminating in the 2008 financial crisis.
Fooling Some of the People All of the Time is a singular book in financial literature: a hedge fund manager narrates in the first person his own multi-year investigation into a publicly traded company he publicly accused of accounting fraud. David Einhorn, founder of Greenlight Capital, began investigating Allied Capital, a business development company, in 2002 and found what he believed to be systematic irregularities in the valuation of its loan portfolio. What follows is a narrative as fascinating as it is unsettling about the mechanisms of institutional resistance to scrutiny: an SEC that does not act, analysts who ignore the evidence, regulators who close the file. The book is simultaneously a practical manual on forensic financial statement analysis, a financial thriller, and an indictment of structural failures in American market oversight. The complete 2010 edition includes the final outcome: Allied Capital was absorbed by Ares Capital in 2010 after years of deterioration. Einhorn's voice is direct and confident, but readers should consider that the book presents a one-sided perspective.
For fundamental analysts, short-side investors, and any reader interested in how American capital market oversight actually functions.
FactAllied Capital was acquired by Ares Capital Corporation in 2010, eight years after Einhorn began publicly denouncing its alleged accounting irregularities, an outcome documented in the complete edition of the book published that same year.
