Not two days back from vacation out of the country, you can imagine my surprise when I picked up the phone and it was a special agent from the securities fraud division of the FBI on the other end of the line.  I didn’t even know that the FBI had a securities fraud division, as I assumed these matters were handled by the SEC.  Well, apparently the FBI also looks into securities fraud, and this agent had received a few copies of The SeniorCare Investor and wanted an additional four issues from the second half of 2006 as part of an ongoing investigation.  When I asked him how he obtained “copies” of the other issues of our newsletter in his possession, reminding him of federal copyright laws, he grew quiet and responded that his sources were confidential.  So are mine. 

After thinking about charging him our standard fee of $50 per back issue, he said he would rather not have to go through the subpoena process to obtain the material he was looking for.  I agreed, but I asked, why The SeniorCare Investor?  He answered that some of the people they were investigating had said they received their information from the newsletter.  Really, imagine that.  So naturally we had to put our investigating reporter’s hat on to see which companies may have been involved in the investigation.  In those four issues, just Capital Senior Living, Sunrise Senior Living, Advocat, Ventas and Kindred Healthcare had any stories about them that could have been part of a securities fraud investigation.  Capital Senior Living and Advocat can probably be ruled out, for different reasons, so it may have something to do with the Ventas rent-reset negotiations with Kindred (doubtful), or the larger problem that Sunrise Senior Living has been having with its accounting restatement, now in its 14th month of review.  In the latter case, the SEC already has a formal investigation going on, so we don’t see why the securities fraud unit of the FBI would also get invlolved.  So after much thought, we are at a loss.  If anyone knows of any securities fraud investigations, other than the one at Sunrise and the one at Genesis HealthCare Corporation from last January, which we believe has been solved, please give us a call.  And remember, all our sources are kept confidential!