tumbled Monday after the company said it received an information request from a Justice Department office conducting a criminal inquiry.
Allied, a "business-development" outfit that seeds private companies and profits from their dividends and capital gains, said the "nature of the inquiry appears to pertain to matters similar to those allegations made by short sellers over the past two and one-half years."
The U.S. attorney for the District of Columbia is "requesting the preservation and production of information regarding Allied Capital and Business Loan Express," Allied's biggest holding, the company said. Business Loan was also mentioned in the informal
Securities and Exchange Commission
probe, which was reported June 24.
The company used similar language in describing an SEC probe it disclosed in June. The bear case on the stock holds that Allied makes incomplete disclosures about its portfolio companies. Allied has repeatedly denied any such disclosure problems.
Allied's shares were recently down $2.87, or 10.2%, to $25.37.