David Einhorn knows how to up the ante. And the hedge fund manager, who came in 18th in the 2006 World Series of Poker in Las Vegas, is taking on some serious opponents. He’s sticking it to the Securities and Exchange Commission, accusing the regulator of being more worried about what hedge fund managers say to one another in their private conversations than about mismanagement in corporate America. The 39-year-old founder of Greenlight Capital is currently short Lehman Brothers Holdings, having publicly questioned how the firm reported capital gains on certain illiquid securities. But he doubts the SEC will investigate. “I don’t have any confidence at all that the authorities will look into Lehman’s accounting,” he says. Six years ago Einhorn criticized the accounting practices of another Greenlight short, Washington, D.C.–based lender Allied Capital. Soon after, the SEC began investigating him and other hedge fund managers over their trading practices; no charges were brought. Allied was also investigated but never reprimanded and its shares did not drop significantly. But in this game, Einhorn, who recently published a book about his experience with Allied, is not folding.
