Einhorn Quits New Century Board

Allied said last month in a response to a subpoena that it had discovered that "an agent of the company obtained what were represented to be telephone records of David Einhorn and which purport to be records of calls from Greenlight Capital during a period of time in 2005."

But for New Century, Einhorn's aggressive shareholder activist tactics might prove best on the sidelines for now, one observer says.

"The fate of New Century is really up to the fate of the warehouse providers at this point that have lines out to them," says Matthew Howlett, an analyst at Fox-Pitt Kelton. "I just think it's better right now that he is not there. I don't know what service he could provide at this point."

According to Howlett, Einhorn was concerned that New Century was not managing its capital efficiently enough and was pushing for more share buybacks. Fox-Pitt has suspended his coverage of New Century.

A spokeswoman for Greenlight Capital would not comment further on the issue. New Century did not immediately return a call requesting comment.

Shares were up 15 cents, or 2.9%, to $5.31 on Thursday.

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