One-Off Transactional Due Diligence Highlights

Most commercial relationships and partnerships entail putting assets and your reputation at risk. It is therefore a common practice to perform background investigations of entities and related individuals to provide clients with some assurance that the representations that they have made are truthful and that there is nothing in their background that reflects negatively on the character, integrity and history conduct that would make them ill-suited as business partner. Some examples of findings from such investigations include involvement in human trafficking; a pending indictment for theft of client escrow money; a murder-for-hire conviction; one party to the deal was incarcerated in federal prison at the time of the proposed transaction; one of the subjects had a criminal conviction for embezzlement; a potential private wealth management client had a prior conviction for running a stock boiler room operation for an organized crime family; a former employee who was listed as an Office of Foreign Assets Control Specially Designated National for having sold two naval surplus attack patrol boats to the Sadam Hussein regime in Iraq; and an SEC debarment from serving as an officer of a public company due to previous accounting fraud violations while serving as CFO. Not all investigations lead to such findings, but it is better to know these things before you put assets at risk and your reputation.