The Alliance Data (ADS) story has taken another bizarre turn. The Securities and Exchange Commission said Thursday it had charged former Schottenfeld Group trader Paul Berliner with securities fraud and market manipulation for spreading false rumors about Blackstone’s (BX) planned acquisition of Alliance Data while betting that Alliance Data shares would fall.

Blackstone agreed last May to buy Alliance Data for $81.25 a share. The SEC alleges that, on Nov. 29 of last year, Berliner fabricated a rumor that the acquisition was being renegotiated at $70 per share because of purported troubles in the company’s consumer banking division. Berliner then “disseminated the false rumor through instant messages to numerous individuals, including traders at brokerage firms and hedge funds,” the SEC says. The rumors resulted in the stock plunging as low as $63 and change before recovering in late trading after Alliance issued the first of many denials that the merger was in trouble.

“The message of this case is simple and direct,” SEC chief Chris Cox said. “The commission will vigorously investigate and prosecute those who manipulate markets with this witch’s brew of damaging rumors and short sales.”

The irony is that Berliner, who neither admitted nor denied the SEC charges, turned out to be partially right. Blackstone scuttled the deal in January, and Alliance Data shares plunged anew. While Blackstone claimed that satisfying certain regulatory conditions would be onerous, it seems clear that the deal really fell victim to the financing freeze that hit last summer. Since then, despite Alliance Data’s valiant efforts to revive the deal or at least pocket a termination fee, the stock has traded mostly in the low $50 range. Five months later, a deal at $70-a-share doesn’t sound so bad.

Maybe the Alliance Data (ADS)-Blackstone (BX) deal isn’t dead yet. Alliance Data said Friday it dropped a lawsuit it filed last month seeking to force Blackstone to complete a $6.8 billion purchase of the credit card transaction processor. Alliance Data said it dismissed the suit after reading Blackstone filings indicating the private equity firm remains committed to closing the deal.

Shares in the Dallas-based company lost more than a third of their value back on Jan. 28, when Blackstone said it couldn’t satisfy conditions being imposed by the Office of the Comptroller of the Currency. Shares have since recovered from that plunge but recently fetched just $55.10 apiece - some 32% below the $81.75-a-share buyout price the sides agreed to last spring.

Despite the snub and the plunge in its stock, Alliance Data is looking at the bright side. The company said Friday it has now “identified various potential solutions” to the regulatory hurdles Blackstone had cited in backing away from the acquisition. Skeptics wondered about the OCC excuse and whether Blackstone wasn’t just trying to avoid paying top-of-the-boom prices for Alliance Data in a market where leveraged buyout loans are finding few takers, but no matter. Alliance Data said Friday that it “looks forward to working together with Blackstone to effect an acceptable solution to these issues,” even as it cautioned that it can’t be sure “that an acceptable solution will be obtained or that the merger will be completed.” Let alone what price Blackstone might be willing to pay.

Looks like the skeptics were right to doubt Alliance Data’s (ADS) private equity buyout. The Dallas-based computer services company said Monday morning that its prospective buyer, Blackstone (BX), won’t complete the $6.4 billion deal. Blackstone agreed in May to buy Alliance Data for $81.75 a share in cash. But in recent months, as tight debt markets and a slowing economy scuttled a number of private equity buyouts, Alliance Data shares fell as much as 33 percent below the agreed-upon price - a sign that investors didn’t expect the deal to close. Alliance Data certainly fought the good fight, putting out at least three statements over the last two months reaffirming its belief that the deal would be completed. But on Monday, Alliance Data said it received word that Blackstone won’t close the buyout because it believes satisfying certain regulatory conditions would be onerous. Alliance Data replied it is “evaluating the company’s possible courses of action and will pursue those that best protect the interests of the company and its stockholders,” but stockholders don’t appear to be hopeful. Alliance Data shares plunged 41 percent in pre-market trading to $36.

Alliance Data (ADS) says its private equity buyout is still on, but no one seems to believe it. The Dallas-based computer company issued a press release late Thursday saying it believes its agreement to sell itself to Blackstone (BX) for $81.75 a share, or $6.4 billion, is intact. “The company believes that the transaction financing remains fully committed by the banking group,” Alliance Data said. “The company and Blackstone are continuing to work together to close the deal as quickly as possible.”

Of course, it’s understandable that investors might believe the deal is in jeopardy, given that the buyout price is half again as much as Alliance Data’s closing stock price Thursday of $52.82. Indeed, Alliance Data’s shares have continued to plunge over the past month even as the company has repeatedly issued statements standing by the deal, which was reached in May. But DealBook at The New York Times reported earlier Thursday that the deal is on track, according to people briefed on the situation. Maybe investors just can’t bring themselves to believe Blackstone would get such a lousy deal for itself.