Decoding Due Diligence - Finding Bad Actors 

Is Your Firm Onboarding Hidden Risks? 

If you do not thoroughly vet key executives before they join your firm, you can take on more risk than you realize.  

Infortal Worldwide has established a risk-based program to minimize this risk exposure and to manage your firm’s executive character and fitness review process.  

We focus on eliminating the possibility of new hires bringing on hidden risks, including past criminal acts, conflicts of interest, patterns of litigious behavior, undisclosed involvement in other companies, hidden adverse information, inappropriate social media posts, and many other significant risk factors.  

Infortal’s data collected over 30 years show that 20% of executives have serious issues of concern in their history. That is one in every five! 

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Case Studies 

The following are examples of risks at larger corporations and how these risks can be effectively identified and mitigated: 

  • Large companies have paid a heavy cost for failing to conduct the proper level of due diligence. For example, Moderna had to pay $700,000 to a new CFO who was hired and fired after only a single day in addition to market losses and reputation damage.  

Due diligence would have prevented this situation from developing into a PR nightmare reputation damage and market losses. 

  • A client was interested in onboarding a new partner in one of its offices in Central America. While conducting due diligence on the executive, we had to track down records across several international borders.  

Based on our research, we discovered that the executive was wanted in another jurisdiction based on bribery allegations. This information would not have been disclosed without our research. The client was able to avoid this hire and to prevent significant reputation damage and loss of clientele for that office. 

  • A client engaged Infortal to identify and locate an investor at a Fortune 50 company. Our due diligence investigation identified his location, major international real estate assets and extensive work history with both with the Chinese national grid and Russian company Gazprom.  

This critical information enabled the client to make effective decisions regarding the future involvement of this investor in key business transactions and to avoid serious reputation damage. 

  • While conducting executive due diligence on a new CFO for a growing healthcare company, we uncovered several businesses linked to the CFO that were not disclosed.  

When confronted with the information, the candidate was unable to address the company’s concerns.  

Our research uncovered several civil actions filed internationally that provided a great deal of insight into the partner’s past business practices. This allowed our client to move forward into the negotiations armed with substantive information that would otherwise have caused inflated transactional value and potential exposure to civil actions.   

Reputational Risk Protection 

A firm’s reputation built over years of success can disappear in minutes if you bring in the wrong executive.   

Infortal Worldwide’s Executive Due Diligence program protects your firm’s valuable reputation, enhances shareholder value, and protects your leadership team from unnecessary regulatory risk. 

Routine Background Checks Are Not Enough 

If you are relying on simple background checks, you are not seeing the whole picture.  

Routine employment background checks only include a few items, such as criminal history, education, employment verifications, and possibly credit history. However, this limited information will not reveal federal crimes such as money laundering, sanctions violations, civil issues such as SEC violations, class action lawsuits, or even a possible history of sexual harassment claims. 

Routine background checks also fail to uncover problematic financial habits or violations, such as interstate bankruptcies or significant debt issues.  

In addition, conducting a routine background check and for key positions is no longer considered a sufficient level of due diligence according to many federal, state, and local regulators. 

Our tested approach to executive due diligence removes the guesswork around whether your program is capable of ensuring candidates meet your company’s standards and culture. 

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Who to Focus On? 

It is best practice to conduct executive due diligence investigations on any new hire who will have a significant role within your organization. This includes the C-suite, CFOs, CIOs, COOs, senior leadership, and anyone with a major public-facing role.  

In addition, many corporations today conduct due diligence investigations on their board of directors to prevent unnecessary fiduciary exposure, shareholder lawsuits, and reputational damage. We have a specialized approach for boards that also meets fiduciary reporting requirements. 

The Approach 

Executive Due Diligence  

Benefits of Executive Due Diligence 

  1. Gain Confidence in Hiring the Right Candidate 
  2. Ensure a Good Cultural Fit  
  3. Avoid Hidden Risks  
  4. Prevent Reputational Damage 
  5. Gain Fiduciary Protections 
  6. Protect Firm Value 

What is included? 

A risk-based approach to Executive Due Diligence starts with quality research.  

Due diligence investigations are designed to detect hidden and undisclosed information that is not readily available in standard background checks. Due diligence investigations evaluate the relationship of executives to foreign officials, criminal history, financial and legal issues, civil litigation issues, relationships with other companies and entities, reputation issues, shell company involvement, evidence of fraud, signs of money laundering, financial impropriety, conflicts of interest, drug, alcohol and human trafficking, anti-competitive behaviors. and numerous other serious issues. Open Source Intelligence (OSINT) investigations are an important source of information in addition to publicly available records. 

Our reviews begin with the review of available records including the following: 

  • Global Watch Alerts (PEPs, OFAC, SDN lists) 
  • Criminal Records Searches 
  • Civil Records Searches 
  • Credit Checks  
  • Employment History 
  • FINRA License Checks 
  • Tax Liens 
  • Bankruptcy Checks 
  • Fraud and Corruption Risks  
  • Conflicts of Interest Checks 
  • Past Regulatory Issue Checks 
  • Reputational Risk Checks 
  • Negative News Screening 
  • Social Media Screening 
  • Open-Source Intelligence (OSINT) Searches  
  • And More 

After we obtain the relevant public records and documents, the process kicks into investigative analysis of deep, dark and historical web sources often called Open Source Intelligence (OSINT). These investigations go far beyond simple Google searches and social media searches to explore the deep web and historical web.  

OSINT searches yield 30% more adverse information than is found during routine background checks and will find hidden and undisclosed information that is essential to improve risk mitigation. 

Navigating Cultural Landmines: Cultural Intelligence in Executive Due Diligence 

Culture Eats Strategy for Lunch 

It takes years to establish a successful business culture focused on delivering results for your clients while also making sure your team is doing the right thing.   

Our Executive Due Diligence process will make sure that any key executives will be a solid cultural fit for your company so that you can maintain your hard earned, and valuable business culture.  

Activities that may be acceptable in one culture are often not in another country or cultural environment. For example, accepting cash gifts and donations are very commonly practiced in several Asian cultures but are considered bribery in the USA and many EU countries. If the gifts are larger and/or occur with frequency, may be considered criminal in scope. Mis-applying these “cultural norms” may lead to significant concerns, potentially violating federal regulations and to perceptions of improper business ethics among other issues. 

Cutting Edge Investigations 

The Value of a Licensed Investigations Firm 

Infortal Worldwide is a licensed private investigations firm with over 39 years’ experience in global investigations and well-versed in the latest investigative tools and approaches.  

We have access to a full suite of investigative tools and in-country on the ground assets that are not readily available to other investigators. This allows us to frame out our investigation in a way that ensures the best local information and knowledge of regulations in that city, country or region.  

Open-Source Intelligence (OSINT) Investigations 

If any red flags are identified, we can dig deeper, including a full open-source intelligence-based investigation. Infortal Worldwide is a licensed private investigations firm well-versed in the latest investigative tools and approaches.  

Reviewing OSINT-based intelligence regarding key executive hires puts your firm in the strongest position to grow with confidence, knowing that you have a true understanding of the new executive's character.  

Infortal's Bespoke Executive Due Diligence: Tailoring Assessments to Industry Dynamics 

At Infortal, we have over 39 years of providing risk-based solutions across a wide range of industries including: Financial Services; Healthcare; Tech; Manufacturing; Professional Services; Legal Services; and others.  

We also work with companies ranging from start-ups to Fortune 100 and beyond.  

We understand that each industry and company is unique and requires a specialized approach to the due diligence process. It is important to work with a team that truly understands what to look for.  

The Collaborative Journey: Partnering with Infortal in Executive Due Diligence 

Initial Consultation 

It starts with an initial consultation with our team of experts. We then work with you to map out a due diligence plan that meets your team's needs. For example, we frequently work with financial institutions to ensure candidates are vetted for any concerns that trigger regulatory actions or future licensing issues. 

After an initial consultation, we establish a menu of options for your team to use. Typically, this involves a set of three review tiers that correspond with the level of seniority and responsibility of the new hire.  

Then, once you have a candidate ready for review, you notify us to start the process, and we take care of the rest. 

Actionable Recommendations™ 

For each Executive Due Diligence Report, Infortal Worldwide provides a set of Actionable Recommendations™ that explain the investigation's results and describe how your firm can mitigate any identified risks or issues.  

We also offer consultations with your team to discuss any findings and how to mitigate any risks uncovered.   

Reports and Records 

Each Executive Due Diligence Investigation results in a comprehensive report tied to each executive, which allows your firm to maintain a record of the completed assessment. This report includes citations to the sources reviewed and a clear description of the due diligence methodology. 

Program, Policies, and Procedures 

If you need to update your hiring guidelines, Infortal Worldwide has established a risk-based program to manage your firm’s executive screening and align with your risk management strategy and goals.  

This includes a pre-packaged set of policies and procedures your firm can adopt today. 

Contact Us Today 

Our team is available to discuss your firm’s character and fitness assessment program and how Infortal Worldwide’s proprietary approach can seamlessly integrate into your company’s current program. 


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CLE Accredited Courses

Infortal’s Continuing Legal Education (CLE) courses are designed to equip executives, attorneys and risk managers with strategic insights to navigate the complex landscape of geopolitical risk. We cover topics such as international sanctions, regulatory risks, corporate espionage, AML, global warfare, anti-terrorist financing and corruption.

We can help you make informed decisions and mitigate potential risks for your business.
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