Due diligence case study

What you can expect from your due diligence background research request.

Client

A law firm providing services for a public offering

Request

A background check of directors and officers of a company, using sources that will stand up in court or under regulatory review. The client provided the name of the company and the names, addresses, birth dates and places of birth for its five directors by email.

Process

1. Determined name variations and associations with companies.
   
   We searched InfoAction's subscription and free Internet sources to determine name variations for the individuals and other companies they had been associated with. We used this information to plan our search in advance, minimizing our costs in expensive time-based databases.


2. Conducted searches.
   
   We searched InfoAction's fee-based subscription databases for litigation, securities violations, court filings, bankruptcy records, and media coverage indicating potential negative activity. We used the information we had gathered in step 1 to check that documents we found were for the correct individual, using middle names and previous company associations.


3. Summarized and flagged results.
   
   We produced a summary letter of our due diligence background research identifying the sources we had covered, negative findings, and areas for review. We flagged our search results so that the client could quickly find relevant documents, but also provided the full record of our searches, in case the client is ever required to provide evidence of due diligence for litigation or regulatory review.

Deliverable

The final result for the customer was a summary letter of our due diligence background research, including sources covered, negative findings, and areas for review, as well as the full search results from our research. The search results were flagged so that the client could quickly find relevant documents.

Timeline

InfoAction completed the research one day after receiving the due diligence email request, and the client sent a courier to pick up the printed results package and deliver it the same day.

Sources

LexisNexis (securities, case law, bankruptcy), FPInfomart, Factiva, Quicklaw (securities, case law), Office of the Superintendant of Bankruptcy, Canada Stockwatch, InfoTSX

Cost

The total cost for 6 names was $1500, at an average cost of $250 per name.