Research | Screening | Due Diligence | Investigation | Intelligence
December 22, 2011
Are you conducting proper due diligence?
Even when you think you know who you are dealing with, conduct your due diligence and be sure. Take a look at a case between S&L Mechanical Plumbing & Heating (S&L) and Taplen Constructions Inc (Taplen) - a dispute over a construction lien and its validity due to a name discrepancy. S&L brought forward a motion seeking leave to correct the name and sought an order declaring the construction lien is not invalid as a result of the incorrectly names claimant. Taplen brought forward a cross motion seeking declaration that the construction lien was invalid and an order vacating it.
As a result of the lack of due diligence by S&L, the costs associated with this case could have been avoided had S&L conducted their own basic due diligence. In fact, the entire dispute may even have been avoided!
November 19, 2011
Here is a great fraud prevention tool from the Association of Certified Fraud Examiner. I have found it very useful www.acfe.com/fraud-prevention-checkup.aspx
November 11, 2011
DUE DILIGENCE - AFTER THOUGHT OR INTELLIGENT PLANNING
Today, I ran into to someone I hadn't seen in many years. After the usual pleasantries were exchanged, our conversation began to move towards what brought us to our fortuitous meeting - I was in the City for a fraud convention and my friend was in the City for an investors convention
He had just made a fairly substantial investment with an international land banking company. In fact, he invested nearly all of his savings and even borrowed an additional $100k to get in on this once in a lifetime deal! After being sold on a land project and after hearing the possibility of staggering returns, he was given 24 hours to come up with the money to get in. He did.
He admitted that he didn't know anything about the company or its directors. He didn't do any due diligence or even have a solid understanding of what he way buying into but he did meet the owner, review the prospectus, receive a n impressive certificate declaring what he was an investor in and had heard from others how much money they had made in prior deals. In other words, he invested on faith and a hand shake.
Now maybe some of us can afford to loose money on such questionably legal land investment schemes in exchange for the possibility of making a very high return on their investment but I am guessing most would not. I know I wouldn't ... but maybe that's why I am not wealthy yet!
Although some might say that I am slightly risk
adverse, I would say that I accept risk only when I know everything I need to know to minimize my risk and make the best decision for me - ergo my specialty in due diligence.Due diligence shouldn't be an afterthought ... it should be part of our intelligent planning and development process.
I asked my friend to send me the prospectus as I was curious about the too good to be true deal. I was assured that I would find it enticing ...