Allied Capital Corp. said Monday the U.S. Attorney for the District of Columbia has asked the Washington company for information on its activities and those of its Business Loan Express LLC "in connection with a criminal investigation."
Allied Capital, which specializes in providing financing for middle-market companies, said it was voluntarily cooperating with the request. Business Loan Express is one of the country's largest Small Business Administration lenders.
Shares of Allied fell almost 10% Monday.
Stan Collender, a spokesman for Allied, said it is uncertain about the probe's focus, but he also said Allied believes it relates to claims made by some short-selling investors that the company overvalued some holdings.
"We have some suspicions" about the focus, "but nothing definite," Mr. Collender said.
Channing Phillips, a spokesman for the U.S. Attorney's Office, declined to comment.
The Securities and Exchange Commission launched an investigation of Allied and Business Loan Express in June. Bill Walton, Allied's chairman chief executive officer, said that investigation was focused on hedge funds.
"Over the last two years we have consistently refuted frivolous allegations made by short sellers based upon false and misleading information and distorted facts," Mr. Walton said in a June 7 press release.
Allied said Monday that it received the request from the U.S. Attorney's Office last week.
