WASHINGTON–(BUSINESS WIRE)–Forward Risk and Intelligence Inc., a Washington, DC-based corporate investigations, intelligence, and risk advisory firm, is pleased to announce that Jen Hoar has joined the firm as Managing Director. Jen, who brings nearly two decades of professional experience in reporting and investigations to the firm, will grow and develop Forward Risk’s human source intelligence offering.

A former journalist, Jen first honed interviewing skills at news organizations such as ABC News, National Journal, and CBS News. She later worked with former CIA operations officials and prosecutors, among others, in corporate investigations and intelligence firms Crumpton Group and Investigative Group International, before starting her own firm, Sinclair Insight LLC. Jen was also a founding member of an investigative team at Facebook, where she worked on information warfare and election issues.

Human source intelligence is a crucial aspect of investigative work and will complement and supplement all of Forward Risk’s service areas, from litigation and arbitration support to pre-investment due diligence. Collecting human intelligence requires functional expertise and sensitivity to both transparency and confidentiality. At Forward Risk, Jen will innovate how the firm leverages source intelligence to inform clients’ complex decision-making.

Jen is one of the best in the business, and with her sophisticated and client-centric approach to source intelligence, she’s the right leader to help take our team to the next level.

— Forward Risk Co-Founder and Partner Brendan Foo.

By applying her extensive and deep industry experience to her new position, Jen seeks to build upon the existing tradition of forward-thinking, thorough, and principled investigative work that defines Forward Risk.

“I’m thrilled to join Forward Risk and lead the expansion of the firm’s human source intelligence capability, which I believe significantly augments the insight we provide to clients,” says Jen. “Conducting sophisticated source work in-house, along with an already expansive suite of research and analysis offerings, will propel and differentiate us in the industry. I’m flattered and grateful to be a member of this team of multidisciplinary investigative talent.”

About Forward Risk and Intelligence

Forward Risk is a corporate investigations, intelligence, and risk advisory firm headquartered in Washington, DC.

Our experienced and resourceful team conducts investigative due diligence, business intelligence research, risk assessments, candidate vetting, and other bespoke intelligence services for asset managers, private equity, law firms, multinational corporations, and political campaigns. No matter the engagement, our approach is value-oriented, and emphasizes results – through thorough research, sophisticated analysis, clear writing, and thoughtful presentation.

If you have any questions or comments, or would like to suggest a topic for further discussion, please email our Co-Founder Brendan Foo – Brendan [at] forwardrisk.com.

By Julia Wilton, Senior Associate and George Shamiyeh, Director, Forward Risk and Intelligence

Under the Hood: A Discussion Series for Investigative Professionals

As our team has laid out in previous insights, investigative researchers constantly face the struggles of dealing with tight deadlines, high expectations, and the fear of making mistakes in their work. When you add in failures in top-down communication and guidance, these factors increase the likelihood that investigators will lose motivation, or worse, become burned out.

Having a formalized process to review the work of your investigators is crucial, but failing to leverage it in a way that maximizes their potential and enhances company culture can have significant consequences in the short and long term. Here, we highlight some of the ways that reviewers can effectively provide feedback to team members.

How Reviews Affect Client Deliverables

An investigations firm is only as good as the quality of the work that it provides to its clients. High quality service, in turn, is the culmination of thorough research and analysis that has stood the test of rigorous scrutiny and skepticism.

Fundamental to ensuring that a client receives exceptional investigative services is the existence of a review process that puts ego aside and prioritizes attention to detail, comprehensiveness, thoughtfulness, and factual accuracy. Critically, any gap or failure in this process could result in flaws that go undetected. Consequently, this may result in the loss of substantial business and irreparable reputational harm. As such, it’s necessary for any investigative team that aims to impress clients and become a market leader to devote sufficient time and resources to reviewing deliverables holistically.

Reviewers should effectively operate as an investigations company’s “red team,” serving as the final line of defense in independently evaluating whether a report is up to snuff. To do so effectively, reviewers often find themselves analyzing information from a client’s perspective, and they must consistently strive to poke holes in research while maintaining an unbiased approach.

This is no passive undertaking, but rather, a crucial phase that requires deliberate, but empathetic, review and guidance.

Cultivating, Teaching, and Empathizing Investigators

Building trust and communication often starts with the investigative review process. As an editor, it is essential to come to the realization that you are working with a peer or colleague. With that in mind, giving feedback requires empathy, and providing positive and constructive guidance – as you would have it received – is perhaps the most important step in the review process.

Approaching each investigative review with respect and an open line of communication will more often than not preclude any long-term performance issues. To that end, editing needs to be undertaken in a way that teaches researchers the “do’s and don’ts” of investigative research and report-writing.

Simultaneously, the editing process should ideally cultivate and support investigators in growing and honing their skills.

Critical feedback is necessary to enable researchers to learn best practices for analyzing information and putting pen to paper, but it should be provided in a constructive and sensitive manner. Are researchers approaching each case with an investigative mindset – one that aims to leave no stone unturned? Are they relying on the most authoritative sources, asking all the relevant questions, and ensuring that there are no other available avenues of research? Are they directly addressing your clients’ concerns?

These are some of the questions that should be top of mind while reviewing an investigative report, but the way in which they are conveyed to a researcher during the editing process is crucial.

If editors rely on harsh, judgmental, or disparaging feedback – which on their own can cultivate an uneven power dynamic driven by fear – it can ultimately affect the entire culture of a firm for the worse. Instead, editors should approach the review process as a learning experience in its own right, and they should aim to impart knowledge and experience while keeping an open mind.

Instead of telling a colleague that something is plain wrong (receiving a late-night edit that reads, “Pls fix, thx,” is unfortunately too common in our line of work), explain to them why a change is needed in a certain case, even if the explanation requires a bit of extra time and effort.

An essential goal of the review process is to develop your investigators. Providing positive feedback and reinforcement for good investigative work – and being specific about what exactly was done well – can have a big impact and ensure that your researchers don’t feel burned out, particularly in the early stages of their careers in this field. Highlighting what you like about your investigator’s research and writing reiterates what you hope to see more of in forthcoming projects.

More importantly, as your investigators progress, this approach will only create more efficiencies for your firm in the long run, and it will pay dividends by boosting employee morale and improving overall workplace culture.

Everyone Should Be An Editor – And Everyone Needs to be Edited!

While seasoned investigators often require fewer edits or changes to their original work, it is imperative that teams continue to thoroughly review and critique the work of all researchers – regardless of experience in the field. Veteran investigators may require less of a ‘teaching’ approach to edits, but reviewers should remain scrupulous and focused on the content of the research at hand.

On the other hand, while everyone needs edits, it is pivotal that every researcher also becomes an effective editor in their own right, preferably early on in their investigative careers. Unsurprisingly, inexperienced investigators become better researchers by undertaking edits for a more seasoned colleague. Encouraging your emergent investigators to take up reviews can prove to be truly informative. Becoming an editor allows those early on in their careers to visualize and absorb the methods and approaches of more experienced researchers, enabling them to develop their own conclusions for self-improvement.

Crucially, it allows researchers to internalize what to do and not to do, and how to do it, and to apply lessons learned to their own investigative work.

This post is the fifth in a series about workplace challenges facing investigative professionals and other white-collar researchers, focusing on practical advice and lessons learned from our own experiences. While tailored toward the investigative and intelligence industry, we hope that these articles are also valuable for others in the professional services sector, while also providing a behind-the-scenes look at Forward Risk’s values and operating practices.

If you have any questions or comments, or would like to suggest a topic for further discussion, please email our Partner Dan Greenberg – dan [at] forwardrisk.com.

By Daniel Greenberg, Partner, and Andrea Tang, Senior Associate, Forward Risk and Intelligence

Under the Hood: A Discussion Series for Investigative Professionals

Fortunately, the industry also grants us boons such as a workflow that can largely be handled remotely – with a few noteworthy exceptions, such as on-site court searches and in-person HUMINT interviews. However, for the most part, the evolution of the modern investigations world has created tools that – when properly applied – enable a workflow that can be handled safely, thoroughly, and responsibly from remote locations while diligently safeguarding information security and ensuring adequate training for new hires.

Why Should Investigators Adopt the Hybrid Work Model?

The immediate benefits of enabling a healthy and productive remote work culture in most white-collar industries have already spoken for themselves – article after article has already been penned upon the importance of not only mitigating pandemic exposure risks, but enabling the daily convenience, productivity, and mental and physical health of employees in a rapidly changing corporate landscape.

This increasingly popular hybrid work model boasts particular benefits for investigators. Chief among these is enabling firms to attract highly capable employees. The demand for complex investigative work frequently outstrips the number of talented and well-trained investigators available to handle such cases. As a result, investigative firms that perform best in the marketplace are those that can win the war for talent – and one of the best weapons available is a corporate culture that trusts gifted and experienced investigators to flexibly manage their own work environments.

Seasoned investigators often have good reason for preferring a work-from-home setup. In addition to the usual challenges of handling long commutes and work-life balance issues, investigators frequently contend with demanding assignments that require deep focus and uninterrupted time to concentrate on casework. Often, these assignments are more easily handled from the comfort of home – without the myriad distractions or social temptations of the office. For more experienced investigators handling difficult casework, the option of solitude may prove beneficial.

Information Security as a Top Priority

Of course, a firm only benefits from remote setups if work can be conducted securely and in compliance with data protection laws and norms. Investigative firms must stay up to date on the latest Information Security best practices and proactively ensure that remote employees adhere to company policies. For example, a firm’s InfoSec leadership must verify that each employee’s home office setup meets baseline network security standards.

Investigators must be aware that their firms, not unlike political campaigns, could be targeted by highly sophisticated hackers, including those supported by hostile nation-states. Legacy technology systems and concepts may not be up to the task. For example, firms must be aware of cyber risks if investigators are using a VPN from home to access an internal company server. Multi-factor authentication and a modern, highly secure cloud storage platform are both essential. The data storage environment must also have strict permission controls; investigators should only see data for cases they are directly working on. Of course, employees must be trained to be hyper-vigilant regarding common cyber threats such as phishing. National boundaries also come into play in various scenarios, such as jurisdiction-dependent access to certain OSINT resources. Not every search can be done from outside particular territories due to data protection regulations.

Benefits of In-Office Interaction for Investigators

Office time remains instrumental to many aspects of investigative success. In addition to team-building and general camaraderie, office time fosters an ideal environment for collaboration on cases that demand the skill sets of multiple investigators. These may include assists on the same subject, as well as cases in which researchers must work on closely related subjects. For example, when handling shareholder activism matters, a research team typically investigates multiple members of the same board and executive leadership team, or of the same dissident slate. It is incumbent on all investigators to remain abreast of what their counterparts are working on, which is perhaps more easily done in an in-office research bullpen, where organic conversations often give rise to creative new approaches and lightbulb moments. Bespoke projects that necessitate unusual approaches or break new research ground are also often best handled by a team of investigators who can brainstorm on appropriate methodology and reporting structure.

Furthermore, time in the office creates opportunities for investigators with different specialties and experiences to share tips, tricks, and handy information. This collective in-person brain trust often fosters creative solutions to otherwise frustrating or challenging projects. Examples include familiarizing colleagues with new jurisdictions, lending a hand with advanced OSINT tools, and offering area studies expertise on non-US territories and foreign languages.

Tackling Investigative Steps That Require an In-Person Presence

Although the vast majority of white-collar investigative work – such as open source and public records research – can be conducted remotely, exceptions exist. The closure of courthouses throughout 2020, for example, affected the ability of investigative firms to use court runners to conduct research on-site, and to retrieve court documents that were not available online. Creative solutions were sometimes available, but certain capabilities simply could not be directly replaced.  Fortunately, most court closures have ended, allowing on-site research at courthouses to resume more or less normally.

Training and onboarding also tend to function more smoothly in an office environment. While not impossible to tackle remotely or online, research training simply hits fewer snags when new hires can ask direct questions and conduct practice cases in the presence of their more seasoned mentors. Although firms may convey all the same content, thanks to the wonders of screen sharing and other online communication resources, it remains unclear whether a presentation lands with the same impact if given over a call. In addition, trainees tend to ask fewer impromptu questions over chat, than in person.

Ultimately, more in-person face time for junior hires builds their confidence and skill at working independently, as they grow in their careers, whether in the office or at home. What a more senior investigator might breeze through remotely, a junior hire will likely require some degree of mentorship and supervision – and providing that environment will set them up for success working from any location. Direct face time for senior employees can be further incentivized with commuter-friendly benefits such as a conveniently accessible office address, in-office meetings that actively facilitate progress on group projects, and firm-subsidized social events. This may encourage and enable more experienced researchers to spend time in the office mentoring their junior counterparts.

Looking Toward the Future

While the lockdown era of 2020 may have been the initial watershed moment that created a mainstream rise in work-from-home setups, hybrid work models don’t appear to be disappearing any time soon. Events of the past two years have the benefits of a more flexible work environment in most corporate settings. Covid-19 pandemic aside, the growing acceptance of at least occasional remote work days creates several unrelated boons, including focused work time for senior hires, and a flexible work environment that may prove attractive to prospective hires in a battle for limited talent.

Ultimately, good investigative firms should consider mirroring their clients’ practices. As extensions of our clients’ support teams, it behooves us to examine the practices of law firms, hedge funds, private equity firms, and other clientele. At this point in time, we see a mix of remote and in-person work in most of these sectors, and it remains unclear where they may ultimately settle.

One thing remains clear: a hybrid work model, when intelligently implemented, provides the best of both worlds to premier white-collar investigators. By leveraging best practices for a flexible work environment, investigations firms cultivate an inherent adaptability that will benefit its team members and clients alike, regardless of what the future holds.

This post is the fourth in a series about workplace challenges facing investigative professionals and other white-collar researchers, focusing on practical advice and lessons learned from our own experiences. While tailored toward the investigative and intelligence industry, we hope that these articles are also valuable for others in the professional services sector, while also providing a behind-the-scenes look at Forward Risk’s values and operating practices.

If you have any questions or comments, or would like to suggest a topic for further discussion, please email our Partner Dan Greenberg – dan [at] forwardrisk.com.

By George Shamiyeh, Skyler Minke, and Knowles Adkisson, Forward Risk and Intelligence

The trend is unmistakable. Investments in professional sports, long the province of high-net-worth individuals motivated by a mix of passion and prestige, are increasingly catching the eye of institutional investors in search of value creation and lucrative returns. Professional sports franchises and leagues who once shunned private equity overtures are now spreading their arms wide, spurred by greater liquidity needs to sustain growth and manage pandemic-related losses.

Together these factors create an environment that offers promising new investment opportunities not only in North America and Europe, but in regions as far-flung as India and New Zealand. But these opportunities do not come without inherent challenges and risks—fan passion and exposure to corruption and organized crime, for instance—that are almost entirely unique to the sports industry. The successful private equity investor will require a nuanced understanding of this sector to navigate the risks associated with acquisition and marketing opportunities, including efforts such as investigative research into potential equity partners and club leaders, as well as a strong understanding of geopolitical risks.

Transition Away from “Mom-and-Pop” Ownership

From the early days of professional sports until relatively recently, ownership in franchises was limited to high-net-worth individuals, or sometimes as in the case of European soccer, collective fan ownership. Leagues feared that corporate ownership would lead to a loss of control by virtue of being accountable to stockholders and having to submit proprietary information to financial regulators. As a result, leagues such as the NFL, NBA, and MLB in North America instituted rules limiting, for example, majority ownership stakes to individuals who can afford to pay cash.

But starting in the last several years and accelerating during the coronavirus pandemic, those leagues have started to amend their bylaws to relax those restrictions, for several reasons. For one, sports franchise values have exploded. In 2001, for example, Forbes estimated that the average NBA franchise was worth $207 million. In 2021, Forbes pegged the average NBA team’s worth at $2.2 billion. This upward explosion in valuations has made the prospect of summoning the liquidity to purchase a franchise outright increasingly daunting for the individual investor.

A key driver of these increased valuations is an exponential growth in media rights deals. The rise of digital technology and streaming have enabled sports entities—such as European soccer clubs, a popular recent investment target for institutional investors—to grow their brands beyond national and continental borders to reach truly global audiences. Recent developments such as the 2018 U.S. Supreme Court decision striking down a federal prohibition on sports betting are supercharging this trend, with the number of Americans betting on sports in 2021 expected to increase by more than a third over the previous year. Ongoing competition between clubs to maximize these new opportunities has required them to transition into truly international businesses, or else be left behind.

In March 2020, these trends collided with the coronavirus pandemic to create a perfect storm for private equity investment in sports. Even as league and franchise valuations continued to rise, revenue across sports plummeted with the cancellation of games and drastically reduced fan attendance. The disruption almost prompted the collapse of Italian soccer’s premier league, Serie A, while Germany’s top league, the Bundesliga, sought to stem revenue losses with a proposed sale of its overseas broadcasting rights to private equity bidders.

Each of these developments—a need to professionalize their business operations, sustain growth, and compensate for pandemic-related losses—has led sports leagues and franchises to seek outside investment from private equity investors, who had record amounts of unspent cash on hand at the onset of the pandemic. And attracted by consistent returns and the prospect of future growth, private equity has returned the interest.

“Clubs and leagues are looking for investors who can support their growth through strategies like international expansion, broadcast rights partnerships, new streaming distribution opportunities, betting and digital,” Franziska Kayser, a Managing Director at KKR, recently told Private Equity News.

The Risk Landscape

So, with inexorable revenue and valuation growth and an urgent demand for liquidity, sports investments should be a, well, “slam dunk” for private equity investors, right? As in other sectors, the most realistic answer is, “not always.” An investment in sports brings with it a set of unique costs and challenges that are ignored at great peril.

For starters, the sports industry in general has long suffered from exposure to corruption—including match-fixing, bribery, and money-laundering—and the sector offers numerous entry and exit points for illicit finance. Any potential equity transaction should begin with due diligence—including executive background screening, extensive public records review, and independent source interviews—to arm potential investors with all available information before making a major commitment. Having thoroughly examined and analyzed public records and news sources in countless jurisdictions across the globe, Forward Risk’s team of investigators is well-positioned to help private equity investors identify and mitigate risks arising from bribery and corruption. Leveraging our multilingual research capabilities and subject matter expertise in major world regions, we piece together open-source information to provide our clients with actionable intelligence.

Depending on context, investments in this sector can also be volatile to an investor’s bottom line. In English soccer’s Premier League, where each season the three worst clubs are sent to a lower division with dramatically reduced broadcast revenue, poor on-field performance can have immense financial consequences. American PE firm ALK Capital’s recent purchase of English club Burnley F.C. could, according to some estimates, see the team’s television revenue drop from about $130 million per year to $4 million per year if the club doesn’t win enough this season to stay in the Premier League. Without a proper deep-dive review of open sources, or interviews with well-placed individuals—focused on gathering a concrete understanding of a league’s relegation practices or a management team’s track record—prospective investors might find themselves behind the curve from the get-go.

Finally, any investor must also understand that the high-visibility nature of sports carries with it the potential for widespread reputational damage that can happen quickly and with little opportunity for damage control. The recent takeover of Newcastle United by the private equity firm PCP Capital Partners and the Saudi Public Investment Fund has brought with it a spate of media coverage surrounding human rights abuses by the Saudi government. Unlike in, for example, the real estate sector, investments in sports require stakeholders to maintain a strong relationship with fans and players. In April 2021, a proposal for the largest European soccer teams to form their own, transcontinental “European Super League” fell apart almost immediately after it was made public in the face of immense backlash from fans, players, and politicians. JPMorgan Chase & Co., which had pledged nearly $5 billion to underwrite the new league, suffered what the New York Times described as “an immense reputational hit” when the proposal collapsed.

“Investors need to appreciate the community and country dynamics in which they are investing,” Gerry Cardinale, the Founder and Managing Partner of sports-focused private equity firm RedBird Capital Partners, recently told Private Equity International. “Teams at the most fundamental level are emotional assets and brands that ultimately belong to the fans and their larger community.”

Institutional investors seeking entry into the global sports industry will require a seasoned business intelligence and due diligence partner, as investments in this space should be made with a full picture in hand. That includes not only an in-depth review of the track records of potential equity partners and club leaders, but also a clear outline of the geopolitical risks that may bring blowback to a deal.

Forward Risk’s dedicated investigations team comprises industry experts who have years of combined experience in supporting hedge funds and private equity firms to navigate the risks associated with acquisition and market-entry opportunities. We invite you to find out more about how Forward Risk can help.

By Daniel Greenberg, Partner, and Krystal Ramirez, Associate Director, Forward Risk and Intelligence

Under the Hood: A Discussion Series for Investigative Professionals

An investigator’s job at its core is to obtain the truth. The investigator must grapple with the inaccessibility of much helpful information, and the need to filter out huge amounts of irrelevant data. Often, the key finding in a case is the needle in a haystack.

To overcome these challenges, investigators must approach their craft with a mindset that prizes intellect over rote actions. Investigators make informed decisions and practice good judgment, keeping in mind the key attributes of quality research: depth, breadth, carefulness, and direction.

An investigator’s judgment can become clouded if they are affected by their own biases – both conscious and unconscious. It is essential that investigators reflect on what biases may be affecting them, and then take steps to counteract them.

What is bias?

In the case of explicit, or conscious, bias, an individual is very clear about their feelings and attitudes, and related behaviors are conducted with intent. Because of this, conscious bias can be easier to anticipate and recognize.

For instance, an investigator may experience conscious bias stemming from a preexisting relationship with a company or individual that they are looking into. This, of course, can present a conflict of interest during the course of an investigation.

Although conscious biases are most often thought of in connection to relationships with people, such biases also can exist with respect to records and sources of information. For example, an investigator may consciously trust certain news and information sources more than others. Indeed, many investigative professionals would admit that they favor more mainstream media over less well-known publications, and account for this explicit bias in the way that they present their findings.

On the other hand, unconscious bias, also called implicit bias, is a bias that the holder is not aware of at the time. Science has shown that people harbor more unconscious biases than most would care to admit.

Specifically, numerous studies indicate that there are limitations to human perception, attention, and decision-making – that is, individuals cannot process all stimuli that surround them on a daily basis, so instead they adapt “mental shortcuts.” Although there are ways in which this tendency can be helpful, it also has the potential to inadvertently undermine investigations. A number of nonprofit organizations like The Innocence Project have documented how unconscious bias can negatively affect criminal investigations and criminal justice outcomes; these same biases can also affect corporate investigations.

How can unconscious bias affect investigations?

Unconscious bias can affect how an investigator looks for evidence, interprets facts, and ultimately reaches conclusions. Common examples include attention bias, confirmation bias, affinity bias, and attribution bias – all of which can negatively impact an investigation.

Studies show that we pay more attention to action that is consistent with a stereotype than to action that contradicts a stereotype: this is known as attention bias, or low-effort information processing. In these cases, an individual may tend to develop inferences or expectations about a person early on in the information-gathering process. Consider that when conducting open-source research, an investigator may unconsciously be more likely to expect to find criminal records for an individual if they are a person of color. An investigator affected by such a bias could mistakenly connect a criminal record to the target of their investigation, when in reality the finding actually pertained to a different person with the same name.

Similarly, confirmation bias is the tendency to seek out and attribute weight to pieces of evidence that support an individual’s preconceived notion and ignore evidence which disproves it. It also manifests itself in the tendency to interpret ambiguous evidence as supportive of one’s own thinking. In the case of a human intelligence (HUMIINT) investigation, confirmation bias can even unconsciously affect the questions one may ask, leading a source to give answers that are skewed. While an investigator may be inclined to ask targeted questions, these may unintentionally elicit answers that support an initial assumption, whereas a broader line of questioning may provide a more fulsome set of facts.

Unconscious bias can also lead an investigator to discount important evidence. For example, individuals often have a tendency or preference for people like themselves – this is called affinity, or ingroup, bias. This preference for people like ourselves is largely instinctive and unconscious. Affinity bias can affect an investigator’s professional skepticism; say, if an investigator were to unconsciously be less critical of someone who shares their political views.

Unconscious biases are also problematic because they can interfere with the objective assessment of facts and skew an analysis. In the case of attribution bias, an investigator may attribute an individual’s behavior to a stereotypical characteristic. Conversely, if an individual behaves in contrast to a group stereotype, an investigator might attribute that behavior to external causes, preserving the integrity of the stereotype. For instance, an investigator may unconsciously be more likely to ascribe a woman CEO’s accomplishments to external factors (e.g., an upturn in the economy, or stronger overall demand in the industry) than to her effective leadership skills.

Because we are fundamentally unaware of our own automatic, unconscious biases, we believe we are acting in accordance with our conscious intentions, when in fact our unconscious is in the driver’s seat. Therefore, our assessment of the facts is never as objective as we believe them to be.

In what ways can an investigations firm combat unconscious bias?

Managing unconscious bias during an investigation is challenging because, by definition, an individual is unaware of its influence. However, by proactively recognizing the impact unconscious bias can have on investigations, and consequently, the quality of the work, a firm can take steps to combat it.

First, an investigations firm can recruit talent with unique backgrounds by employing hiring practices that encourage a diverse candidate pool. The strongest team will include individuals who have different lived experiences and multi-faceted identities. This diversity (including sexual orientation, gender identity, neurodiversity, socio-economic or educational background, and myriad other traits that are hard to define) will pay dividends especially during the internal review process, when colleagues aim to bring in different perspectives to the research, analysis, and reporting on an engagement.

Employers can also actively foster a culture of learning and growth. Investigators should feel empowered to continuously self-monitor their own perceptions, judgments, behavior, decisions, and actions for the influence of implicit biases. Firms can nurture this by providing opportunities for investigators to pursue professional development. For example, the firm can provide grants or stipends for its team members to attend conferences and training courses.

Having access to these grants at work motivated me to pursue professional interests that I may not have been able to explore in as much depth otherwise. As an example, I recently attended a nationwide conference exclusively focused on LGBTQ+ inclusion in the workplace. Developing additional skills and bringing some of those lessons back to the office has allowed me to connect with colleagues in new ways and build initiatives that ultimately contribute to the work that we do.

— Forward Risk Associate Beatriz Bechelli

Taking such steps to mitigate the harm of unconscious bias will lead to higher quality work, and better outcomes for clients. As investigators, efforts to combat bias and improve diversity will ultimately demonstrate our commitment to our profession and our clients.

This post is the third in a series about workplace challenges facing investigative professionals and other white-collar researchers, focusing on practical advice and lessons learned from our own experiences. While tailored toward the investigative and intelligence industry, we hope that these articles are also valuable for others in the professional services sector, while also providing a behind-the-scenes look at Forward Risk’s values and operating practices.

If you have any questions or comments, or would like to suggest a topic for further discussion, please email our Partner Dan Greenberg – dan [at] forwardrisk.com.

By Daniel Greenberg, Partner & Christopher Darroch, Associate Director, Forward Risk and Intelligence

Under the Hood: A Discussion Series for Investigative Professionals

Investigative professionals are not usually the first group that the public will think of when discussing burnout. Nowadays, white-collar workers can typically do most, if not all, of their work remotely, or as it is sometimes phrased: “from the comfort of their homes.” At the national level, it is certainly appropriate for the conversation to focus far more on healthcare professionals, teachers, and others facing extraordinarily difficult circumstances.

But if you personally work in the field of corporate investigations, or if you rely on the work of investigators for your business’s success, then the work conditions in this sector are likely important to you. Investigative researchers must contend with tight deadlines, high expectations, and the ever-present knowledge that a single mistake can have deleterious consequences. In short, the conditions for burnout are all present. Fortunately, there are several approaches leadership can take to prevent burnout on an investigative research team.

Mitigate Feelings of Over-Work

An investigative researcher who is dedicated and passionate about their job can still burn out if they are overworked. As explained by a May 2021 New Yorker article (“Burnout: Modern Affliction or Human Condition?” by Jill Lepore), the term “burnout” was coined in the 1970s by psychologist Herbert J. Freudenberger, who put in long hours at a free clinic in New York. Freudenberger wrote, “You feel a total sense of commitment… until you finally find yourself, as I did, in a state of exhaustion.”

The previous article in this series discussed how investigative team leaders can mitigate feelings of overwork and burnout by creating a functional work environment, thinking ahead, and setting boundaries. In addition, leadership can consider the following approaches:

• Mix up project types: Working on the same type of investigative project over and over again can lead people to feel overworked even if their hours are reasonable. After a researcher completes a big project, try to assign them something different for at least a day or two to break things up. Similarly, if a researcher has been assigned a number of smaller projects in a row, consider giving them a longer-term case to work on. Overall, watch out if someone ends up becoming your “go to” for a certain project type: is that something they actually want?
• Avoid “speed up” pressures: According to the New York Times (“Young Workers Disrupt Key G. M. Plant” by Agis Salpukas), in January 1972, General Motors assembly line workers in Lordstown, Ohio famously went on strike in protest of “being asked to work too hard and too fast to be able to turn out quality automobiles.” Investigative researchers may be familiar with this general sentiment. Be cautious when reducing “hours per case,” unless you have a well-thought-out plan. Genuine efficiency gains come from changes to techniques or approaches, not simply pressuring researchers to “speed up,” or meet an arbitrary “utilization rate” that fails to measure the objective quality of their output.
• Cut down on distractions: If your researcher has 10 days to complete a project, but they are on conference calls and responding to emails for half that time, then they really only have five days. The phrase “that meeting could have been an email” is ubiquitous but only tells part of the story; emails and chat messages can also be disruptive. Good research requires intense focus on the subject of your investigation. Leaders who respect this need for focus and structure their internal communications carefully can minimize unnecessary distractions and empower researchers to hit ambitious targets.
• Encourage employees to utilize work from home advantages: While something of a mixed bag, working from home comes with novel advantages. For example, workers save time without their morning commutes and are more able to tailor their work environment to their specific needs. However, the high-stakes nature of the investigative field can cause some employees to question their use of these benefits; taking a walk around the office feels perfectly natural, but taking an equally-timed break while at home can feel lazy. Encouraging employees to reap work from home benefits can not only help counter burnout, but also increase trust between employers and employees.

Connect Researchers with the Purpose of their Work

MIT Sloan Management Review (“What You’re Getting Wrong About Burnout,” by Liz Fosslien) recently emphasized that overwork was only one of the causes of burnout, with other causes being lack of meaning, feelings of ineffectiveness, and not receiving emotional support. As such, the following points may prove helpful:

• Investigators who believe in the purpose and importance of their work are less likely to feel burnt out. Managers should regularly remind their team why their work has value to the client and often to society as a whole. Perhaps more importantly, managers should also take the time to learn about each investigator’s values and beliefs, and help them connect their day-to-day work to an end goal that has meaning for them.
• A researcher’s sense of purpose can dwindle over time if leaders are neglectful. Some investigative projects are inherently meaningful and interesting; digging up evidence of fraud and stopping a scammer in their tracks is usually going to feel satisfying. Unfortunately, in many cases, the ultimate goal of an assignment cannot be fully shared with the researcher. In other cases, a researcher may come to feel – often mistakenly – that the assignment is “routine” and not fulfilling any larger purpose. It then falls to leadership to actively communicate why the work is in fact meaningful.
• Leaders can emphasize the link between high-quality research, client satisfaction, and workers’ career objectives. If an investigator clearly sees that high performance on a project will result in advancing their own career and the goals of their team, they will feel more of a connection to the project. Often, a sense of purpose can come from helping a colleague or hitting an important benchmark.
• Researchers can also find innate value in the mastery of the investigative skill set. At Forward Risk, we often advocate for investigators to see each project as an opportunity to develop and apply creative methods and techniques, which often uncover hard-to-find information. Regardless of the ultimate end use of the case, a sense of purpose and progress can be found within any assignment, so long as the researcher believes in the value of the investigative craft.

Avoid Seeing Burnout as an Individual Failing

Managers typically have a lot of competing priorities and duties and may be tempted to view topics like burnout, motivation, and purpose as something that each researcher should handle on their own. They may think, “if someone is feeling burnt out, why don’t they just take a vacation?” Vacations are one part of the answer but far from a complete solution. Researchers should be energized by their work, not drained from it and in desperate need of recovery time.

In addition, what some managers may fail to recognize is that, while working from home, an already fragile work-life balance can quickly take over a researcher’s life. The lack of the concrete distinction between time spent in the office and time at home leaves some employees in a state of limbo, never fully leaving their workplaces. Managers should regularly check in with their researchers to ensure that their work does not bleed over and dominate their personal lives. Such bleed over will only serve to increase employee burnout.

The benefits from employee engagement and retention vastly outweigh the costs of preventing and mitigating burnout, in terms of both quality of investigative services, and financial considerations. The above suggestions are just a few examples of actionable steps that leaders can take to prevent burnout, although it is a task that is admittedly easier said than done. While this article does not have all the answers, we hope that you found some value in this discussion.

This post is the second in a series about workplace challenges facing investigative professionals and other white-collar researchers, focusing on practical advice and lessons learned from our own experiences. While tailored toward the investigative and intelligence industry, we hope that these articles are also valuable for others in the professional services sector, while also providing a behind-the-scenes look at Forward Risk’s values and operating practices.

If you have any questions or comments, or would like to suggest a topic for further discussion, please email our Partner Dan Greenberg – dan [at] forwardrisk.com.

By Daniel Greenberg, Partner of Forward Risk and Intelligence

Under the Hood: A Discussion Series for Investigative Professionals

High-quality investigative research adds a huge amount of value for clients – uncovering hidden facts, changing a narrative, and developing actionable insights – ultimately resulting in improved business decisions and results. Many firms boast of offering top-tier investigative and intelligence services to clients for this reason. However, delivering client value depends on a highly engaged investigative research team that is focused and motivated to excel consistently.

White-collar professionals, like many others, have felt burnout in the past year and a half, and this has led some to feel less engaged with their jobs. Even before the pandemic, investigators and other white-collar research professionals often felt tremendous stress from a variety of factors. Among the many negative consequences of job burnout are lack of concentration, decreased productivity, and increased turnover, according to the Mayo Clinic and Harvard Business Review.

For investigative researchers, burnout impairs core job functions. With a team of chronically stressed out or over-worked employees, how can a client trust that nothing will be overlooked? A key research finding or analytical insight that breaks open a case and delivers real value requires an investigator striving for excellence in all efforts.

For example, an important civil or criminal record finding may only be retrievable by diligently searching many variations of a person’s name. Or, a seemingly benign property transaction could actually be sign of an improper pay-off – an insight only discoverable if an investigator digs in to the background of all involved parties. There are innumerable scenarios in which a highly engaged investigative researcher can add substantial value beyond a more cursory or slapdash approach.

How should investigators (and their managers) promote engagement, prevent burnout, and fulfill their responsibilities to their clients? The full answer is complex and depends on each particular situation, and even the best intentions can fall by the wayside without thoughtful management and sufficient commitment to a long-term outlook.

From my experience, there are a few general lessons that can serve as a guidepost:

Prepare for Busy Season

Investigative researchers and other white-collar professionals are likely already quite familiar with the impact of a sudden spike in project work. Increases in workload happen with enough regularity that they can be planned for. Those taking a fundamentally long-term view of staffing can invest in hiring and training workers before they are desperately needed. A brain trust of talented, hard-working, and experienced researchers is your firm’s most valuable asset, and one not easily replicated. Treating your current investigative team well, across the board, ensures that they will feel genuinely motivated to step up when the situation calls for it.

Be Realistic and Transparent When Assigning Work

Opaque, unrealistic, or even unfair delegation of work can grind down even the most passionate investigative researchers. Research teams should take the time to properly assess how long a project will take –conducting brief preliminary research – and then devote sufficient resources. Managers should routinely bring investigative researchers into the decision-making process and create a culture of inclusivity where opinions are genuinely valued.

Avoid a “Fire Drill” Culture

Any workplace should be, at a minimum, functional. In the investigative research setting, this means leveraging the team’s experience to develop standards around case assignment, research best practices, reviewing, and communicating with clients – without creating excessive bureaucracy. Importantly, those who step up to help their teammates on a difficult assignment should be recognized or rewarded, while any drama or ego battles must be immediately quashed. Leaders must model good behavior themselves, or chaos and dysfunction will filter down throughout the team, with predictable results to engagement.

Set Boundaries

Because of pressing business needs, there are often urgent emails or assignments that come in during evening and weekend hours, or when employees are otherwise unavailable. Research teams should proactively plan ahead for such events in a way that works well for both clients and employees. One simple fix is designating a teammate to cover certain projects while an employee is on PTO. Another may be to schedule emails to be sent only during business hours unless there is a genuine emergency. In general, research teams should act as if boundaries are not just a luxury, but rather an absolute essential component of long-term success.

Our experience in the field of investigative research has shown that a firm cannot effectively serve its clients without retaining and motivating its cadre of research talent. A firm whose leadership takes a long view on employee engagement, talent development, and burnout prevention will consistently produce better results on deliverables and create better long-term relationships with its clients.

This post is the first in a series about workplace challenges facing investigative professionals and other white-collar researchers, focusing on practical advice and lessons learned from our own experiences. While tailored toward the investigative and intelligence industry, we hope that these articles are also valuable for others in the professional services sector, while also providing a behind-the-scenes look at Forward Risk’s values and operating practices.

If you have any questions or comments, or would like to suggest a topic for further discussion, please email our Partner Dan Greenberg – dan [at] forwardrisk.com.

By Daniel Greenberg, Partner of Forward Risk and Intelligence

Online due diligence investigations – vetting potential business partners, investments, or key hires on behalf of investors, law firms, financial institutions, or corporate clients – need to be conducted in line with the latest best practices, in order to ensure that all pertinent risk issues are identified and highlighted. Scammers and fraudsters, however, have become savvier at manipulating search engine results and other sources of online information, hiding accurate but unflattering content under the aegis of “reputation management.”

Investigators have a responsibility to counter these techniques and provide accurate, non-sanitized facts to their clients. This entails spotting the often-subtle signs that something is “off,” and working carefully to separate truth from fiction.

Reputation management is similar to digital marketing, but with a key difference. Whereas digital marketing involves efforts to promote a brand online, reputation management is an attempt to influence or even control what others will see about a company or an individual.

There are certainly valid reasons why reputation management may be carried out. For example, if a defamatory claim or sensitive personal information is posted online, it is only natural to want the offending content removed. As another example, some companies respond to negative employee posts or customer reviews to give their perspective.

On the other hand, reputation management can also be used to prevent the public from viewing accurate but negative news stories, blog posts, and reviews. For example, a fraudster can seek to bury an article in the local press about criminal charges filed against them. A June 2019 Buzzfeed News feature highlighted “Google-savvy reputation consultants” who can “cover up arrests, poor customer reviews, and other image-killing content.” The article discussed various techniques used to manipulate search results and ultimately “enable people to hide important details about their lives from potential employers, customers, and romantic partners.” While not necessarily illegal, these methods are fundamentally deceptive.

This unsavory form of reputation management is primarily intended to mislead both search engine algorithms and the general public, but even investigative professionals can be fooled. In the context of investigative due diligence, such a mistake would ultimately deprive a client of an accurate understanding of whom they are getting into business with.

Any investigator should already know how to approach online claims with a critical eye, but they may not always recognize some of the tell-tale signs of a whitewashed online profile. Drawing from our own research, we have compiled some tips that can help investigators to identify and sidestep common reputation management tactics:

1. Spotting Fake Web Content

The easiest way to determine that the online reputation of a company or individual has been “managed” is to spot artificial, positive content.

A reputation consultant may create fake webpages, press releases, customer reviews, or blog posts meant to both bolster their client’s reputation and hide unflattering stories. The fake web content is carefully designed using search engine optimization (SEO) techniques that trick an algorithm into featuring the content at the top of search results, pushing down other, legitimate, sources of information. One controversial SEO technique is to pay for other websites to link to the fake web content, making it appear to be a legitimate and popular destination for web traffic.

Spotting this artificial positive content requires an investigator to be at least as media-savvy as the reputation manager. There are so many news sites on the internet that it can be hard to tell at first that any particular source is fake. Also, in the era of “sponsored content” masquerading as news stories, it is common for a promotional article to visually appear like a legitimate news story. On a similar note, the Wall Street Journal recently discussed how political organizations have created networks of websites that purport to be genuine local news sources, while actually pushing highly partisan agendas.

For a potentially fake news site, an investigator should look at the homepage and a few other news articles to determine whether there is a legitimate news service being offered. Do the articles focus on news related to a specific industry or location, or are the topics seemingly random? Is there any odd or unnatural writing, which could be a sign of bot-generated content? The article’s byline should have the name of the writer, and an investigator can assess whether this is a real person with a discernible track record in journalism.

For a potentially fake press release, an investigator should consider whether the announcement is truly a newsworthy event. For example, a reputation management firm may attempt to hype up a charitable donation or scholarship that is either for a small amount or entirely fake. Investigators should be aware that some well-known news websites will publish paid press releases without vouching for their accuracy.

Fake customer reviews and blog posts can be harder to distinguish. Still, if the tone is overly promotional, the investigator should take a skeptical approach. One tell-tale sign of a fake post is finding the same exact text repeated on multiple, ostensibly unrelated, websites. A sudden spike in the frequency of posts is another indicator of fake content. An investigator can also use web domain registration data (registrant name, IP address, etc.) to uncover connections between purportedly separate websites and blogs that are actually managed by the same actor.

In order to get past a mountain of fake web content, a media-savvy investigator can include the use of targeted search terms to more quickly find relevant content. In addition, Boolean operators can be used to filter out artificial content or “noise.”

2. Spotting Fake Social Media Followers

If a company or individual has numerous followers on Twitter or Instagram, that can appear to lend them an air of credibility. However, many people – including fraudsters seeking credulous investors – purchase fake followers on social media platforms. The two easiest ways for an investigator to spot fake social media followers are to examine the followers, and to examine the quality of the followers’ engagement.

Legitimate follower activity (e.g., likes and shares) should be somewhat proportional to the number of followers. If an account has 800,000 followers but recent posts are only receiving a handful of likes, that is an obvious sign of fake followers. Comments can also be reviewed for signs of genuine engagement. An investigator can also scan the accounts of a sample of followers and determine whether they appear to share interests with the social media account. If, for example, followers of a biotechnology company seem to have expressed no other interest in the biotech or pharma sectors, that is an indication of fake accounts.

Likewise, an investigator should be able to recognize low-quality social media posts and accounts. A social media account for a relatively unknown person or company, with only a couple dozen posts, is very unlikely to attract thousands of legitimate followers. Also, if a recently created account has made thousands of posts already, that is probably the work of a bot, not a real person.

3. Finding What is Intentionally Hidden

The most challenging aspect of investigating a person or company with an actively managed online reputation is finding web content that has been removed, or “scrubbed,” from the internet.

Web content can sometimes be removed from a search engine’s results through a process called “de-indexing.” A reputation management consultant can ask a search engine provider to remove a link from its results, although usually they require a legitimate reason – like copyright violations or sensitive content – before removing the link. A website owner could also be pressured into de-indexing a page through coding changes. While investigators often have a favorite search engine, they should also run searches on competing platforms and compare results.

Perhaps the hardest content to identify is a page that has been taken down from the internet. A reputation management consultant may have pressured a publisher, like a local news website, to take down negative content about a person or company. For the investigator, they may find that a potentially significant lead runs up against a broken link. One perennially useful solution is the Internet Archive’s Wayback Machine, which has a huge collection of archived web pages that can be reviewed. Investigators should also search within subscription-based news media databases, which contain older articles that often do not appear in normal search engine results.

4. Intuition vs. “Checking Boxes”

The increasing sophistication of online reputation management techniques puts into sharp relief the difference between a surface-level review and a deep-dive investigation. The key finding in an investigation may be based on a subtle indication that something is amiss, rather than an article or legal filing plainly stating allegations of wrongdoing.

Online reputation management could also expose the limits of artificial intelligence (AI) tools that purport to automate the due diligence process. Such tools, which scan large datasets and carry out natural language processing for unstructured web content, are touted as able to highlight risk issues. However, these scans are typically targeted at risks in the form of government sanctions or major news stories that contain certain key words, like “fraud.” While results from automated scans could be useful for investigators to review as one part of a larger process, it is not clear how these tools will be able to adapt to an information landscape that has been intentionally manipulated.

Ultimately, an investigator’s most important ally against online reputation management techniques is their own instinct. Research must never become an exercise in rote “box-checking.”

While investigators often shy away from providing subjective opinions, that does not mean setting aside their own analysis and common sense. Doing so would unwittingly play into the hands of deceptive practices like those outlined above. Instead, no matter the scope of any particular assignment, investigators must always approach all claims with professional skepticism and apply their own knowledge, experience, and intuition to their research.

By Krystal Ramirez, Beatriz Bechelli, and Julia Wilton

Imagine that you are a campaign manager, and your candidate is down 5 points in the polls. You know you have a strong message, but you’re up against a well-known opponent with significant endorsements.

A research report hits your inbox: your opponent is not who they say they are. After patiently combing through court filings, property records, past public statements, and even old yearbooks, research has uncovered new facts that voters will be keen to learn. It changes the game, and a new strategy emerges.

Looking for an opponent’s strengths and weaknesses has been a key aspect of political campaigns for centuries. To this day, opposition research, or “oppo,” remains one of the most vital, yet misunderstood, aspects of any competitive campaign for office.

History offers some examples of the impact oppo can have on a political race. The revelation of past sexual misconduct allegations has abruptly ended promising congressional campaigns of both Democrats and Republicans. Likewise, issues related to candidates’ personal and professional track records have, at times, overshadowed policy platforms as central talking points of past U.S. presidential races.

Data from recent election cycles shows a more diverse, and oftentimes younger, pool of candidates now running for office against incumbents at all levels of government. Many of these individuals are first-time candidates. Especially in the current political climate, understanding the importance and core principles of opposition research is more important than ever for these candidates to effectively run for, and win, political office.

Despite oppo’s fundamental role in shaping campaigns, for some, the thought of engaging professional researchers still evokes a “political operative” stereotype of dubious tricks to dig up dirt on a political opponent. These are four of the most common myths preventing campaigns from employing an effective oppo strategy.

Myth 1: “It’s unnecessary.”

No matter the level of office sought – whether a local position or the presidency of the United States – all candidates should consider research a fundamental starting point when launching their campaigns.

At its core, oppo is aimed at gathering information in order to compare and contrast candidates. It is a vital tool used to inform decision-making about messaging, polling, and other elements of a campaign that will help to shape public opinion and media coverage.

While this process may uncover negative information, when done right, it also provides a broader examination of the opposing candidate and a foundation for building the campaign’s central “thesis.” This “thesis” is the argument that the campaign can use to convince voters why they may, or may not, want to support a certain candidate. Campaigns are about storytelling, and research should be the underpinning of crafting a narrative against an opponent.

In the case of self-oppo, research is aimed at identifying a candidate’s own vulnerabilities, in order to better anticipate and refute attacks during the course of a campaign. Before going after a political opponent, it is imperative to first “know thyself.”

Myth 2: “It’s shady.”

Oppo has unfortunately garnered a stigma for being “sleazy” or “playing dirty.” But true opposition research does not involve hacking, breaking and entering, or any other illegal or unethical activity. Opposition research is conducted by professional investigators using public records, and a legitimate firm will adhere to strict standards of integrity.

Some may think that researchers are dumpster diving or having “back alley” meetings, when in fact there is a treasure trove of information available in open sources, much of which is readily accessible online. From campaign finance filings, to criminal history and property records, there is much an experienced investigator can unearth without resorting to tactics for which opposition research is oftentimes unfavorably characterized as “the dark underbelly of political campaigns.”

Moreover, opposition research is not about discrediting an opponent with slanderous or libelous accusations. It does not involve presenting unconfirmed allegations as fact, nor does it involve other unscrupulous conduct. Instead, oppo is based on documented evidence found in open sources that can be corroborated by journalists and others. Oppo is not useful if it is not accurate and grounded in fact.

Myth 3: “Anyone can do it.”

Given the financial constraints of their budgets, many campaigns believe that engaging professional researchers is too expensive. They therefore decide to have junior staff, like interns, or even volunteers, conduct oppo. Many folks consider themselves amateur Internet sleuths; however, there’s more to it than Googling around. Consider this – would you ask an intern or campaign volunteer to conduct polling, create an ad, or lead debate prep? Probably not. Similarly, engaging experienced research experts is invaluable.

Professional investigators who conduct research for a living know what to look for, and where to look for it. Effective research has evolved to be more than simply compiling “votes and quotes,” and regularly involves sifting through highly complex business filings or court documents, for instance. Even gathering information, such as filing Freedom of Information Act (FOIA) requests, can be quite nuanced.

Working with a research firm can help to avoid making erroneous claims that lead to embarrassing headlines for the campaign.

Myth 4: “All oppo firms are mostly the same.”

Ideally, every campaign would have an in-house research team. However, given the reality of limited funds, many campaigns will need to partner with an outside firm. But, not all firms are created equal. Some shops will provide a “data dump” of findings rather than actionable information. What is ultimately most useful to a campaign, particularly to its communications and digital teams, is a narrative that can be conveyed to voters and the media.

Additionally, what can set a firm apart is its ability to adapt tailored projects for a campaign that go beyond a “cookie cutter” research book. A successful oppo research approach targets specific local concerns that may be especially salient for a campaign’s unique context. The best firms become, in effect, an extension of the campaign.

When shaping their strategy, successful campaigns will choose the right partner to unlock the information advantage that political research like oppo, and self-oppo, can offer.

By Daniel Greenberg, Partner of Forward Risk and Intelligence

U.S.-based law firms and investors participating in international proxy contests may find themselves at a disadvantage if they cannot match their opponent’s local knowledge and jurisdiction-specific research capabilities. Fortunately, a partnership with a dedicated investigations team that has substantial local experience can bridge the gap and increase the odds of a successful outcome. This is especially true in Israel, where there is a wealth of information to find, if one knows where to look.

Israel’s Companies Law is “considered a paradise for activist shareholders,” according to articles by Tel Aviv-based law firm Shibolet & Co.¹ The regulatory environment has enabled campaigns by institutional investors as well as American and Israeli hedge funds. Traditionally, one major deterrent to activist campaigns in Israel has been a high proportion of listed companies with controlling shareholders, owning 50 percent or more of the issuer’s voting shares. In recent years, however, opportunities for activism by minority shareholders have increased alongside a trend away from listed companies having controlling shareholders.²

A well-known recent example of activism in the Israeli market was investor Starboard Value LP’s campaign against semiconductor company Mellanox Technologies Ltd. (NASDAQ: MLNX). In early 2018, Starboard leveraged its research into the Mellanox board and highlighted a “staggering” pattern: Mellanox’s board and management had been aggressively selling their shares in the company, with no open-market purchases recorded in the preceding years.³ Starboard used this information to argue that the Mellanox board was not confident in the company’s future and was also not committed to the company’s success. In June 2018, the parties reached a negotiated settlement, with Mellanox agreeing to replace three of its board members.⁴

The Starboard / Mellanox case displays the especially international nature of corporate contests in Israel. Many Israeli issuers are listed on both the Tel Aviv Stock Exchange and the NASDAQ. Activist campaigns are more likely to target dual-listed Israeli companies than entities focused solely on the local market. Likewise, trends in Israeli shareholder activism may be more dependent on global market conditions than the local economy. Navigating this landscape requires an approach that combines the nuanced insights of an Israel specialist with the broader perspective of an internationally savvy generalist.

Parties vying for an edge in an upcoming proxy battle in Israel will find themselves at a significant disadvantage if they cannot match their opponent’s research capabilities, both within Israel and internationally. The outcome may hinge on whether an activist’s research findings persuasively support an argument that significant change is needed. In any corporate contests involving an Israeli issuer, executive, or director, an investigative researcher should be adept in the following areas:

Diving into Hebrew-language media

The Israeli press is fairly accessible to English-language speakers, who can draw from a selection of translated media articles. Don’t be fooled, however, into assuming that all the necessary information will be available in English. Local business news outlets – including TheMarker, Globes, and Calcalist – publish many articles in Hebrew only.

A controversy or scandal may fly ‘under the radar’ of English-language media sources if, at the time, it appears to be a purely domestic Israeli matter. In the context of a high-stakes corporate contest, however, the details reported in Hebrew-language media about such a matter could be used to build a case for or against a proposed change. An investigator who can find these articles and properly interpret them – leveraging their familiarity with the local business and political environment – can therefore add a great deal of value during a corporate contest.

Identifying hidden relationships

The independence and integrity of a board member or director can be called into question with the revelation of a significant, undisclosed relationship. In a small market like Israel, there are increased chances that two people who are ostensibly unrelated actually have noteworthy ties. One method of uncovering such an affiliation in Israel is a thorough examination of publicly available company records. This research requires, at a minimum, Hebrew-language reading ability combined with experience using the relevant systems.

Hidden relationships can also be exposed via social media connections, and locating and examining these accounts should be a key component of research. A word of caution to those relying on automated translation tools: social media posts and comments can be undecipherable to those who cannot actually read Hebrew. As an example, a popular automatic translator once told users that the comment “חחחחחח” meant “I love you.” The accurate translation is “hahaha” or “lol.”

Reviewing Tel Aviv Stock Exchange filings

Some issuers’ financial reports are available in both English and Hebrew; this is especially true for dual-listed issuers. Additionally, this year the Tel Aviv Stock Exchange launched an English-language version of the “MAYA” corporate filings database. This is similar to the U.S. Securities and Exchange Commission’s EDGAR database for public company disclosures. However, while the Israel Securities Authority is encouraging companies to publish reports in English, many will choose not to. Importantly, earlier filings are usually not found on the English-language MAYA portal.

For example, the English-language MAYA search portal reveals two disclosures in recent years for oil and gas company Delek Drilling LP (TASE: DEDR.L). The Hebrew-language portal for the same company shows 125 disclosures in the past year alone.

For those comfortable reading Hebrew, the Tel Aviv Stock Exchange’s MAYA system is freely available, largely comprehensive, and searchable in various ways. The technical language and volume of data can feel overwhelming, but an experienced investigator who is familiar with Israeli company filings can uncover valuable information similar to what U.S.-focused researchers routinely find in SEC filings.

Uncovering red flags

In a contentious proxy battle, revelations about the integrity and track record of a key executive or director could swing the vote of other shareholders. Such discoveries are often found within litigation and bankruptcy records. Availability of such records in Israel is somewhat reduced compared to the United States, and a truly comprehensive search may not be possible. That said, pivotal findings can be found through a deep examination of Israeli litigation and bankruptcy records.

Experienced investigators know to search both official web portals and litigation data made available by respected third-party providers. Proper interpretation of documents can be challenging, because often the only available information about a legal proceeding is a judge’s ruling on a procedural matter. The original complaint or indictment may remain out of view. Another challenge is accurately confirming the identity of the parties; records often do not include national ID numbers. There are also data access restrictions – some records are available to Israeli lawyers only.

Whereas in the U.S. it is common to enlist the services of a court record retrieval service to conduct in-person, on-site research, this approach may be of limited value in Israel. Typically, to get information beyond what is available online, one must have a formal connection to the case (or have the consent of one or both parties).

Notwithstanding all of these limitations, past investigations have shown that extremely valuable information can be gleaned from Israeli litigation and bankruptcy records.

Taking research further with human intelligence

Local contacts in Israel can assist with a proxy contest by conducting interviews with knowledgeable local sources, who may be able to provide additional information about an Israeli company, executive, or board member. These individuals tend to run in small circles, where “everyone knows everyone.” Sometimes executives and directors are hired – even at publicly traded companies – without a formal background check. Human intelligence may be especially helpful in such a context, but there are reasons to be cautious with this approach.

According to Eyal (Allan) Weiss, the CEO of an Israel-based competitive intelligence consultancy named The Firm, local sources are generally willing to speak with an investigator so long as the approach is done properly. It is essential to have a clear, sensible reason for asking questions, and to build trust with each contact.

Any real or perceived attempt to obtain material non-public information (MNPI) is fraught with risk, and interviewers must be explicit that they are not seeking and do not wish to receive MNPI. Likewise, any investigator who misrepresents themselves (a controversial tactic called “pretexting”) could bring both legal and reputational risk upon their client; a modern, ethical investigations firm will scrupulously avoid using this technique. Especially for proxy contest matters, legal counsel should be involved prior to entering the realm of human source inquiries. Those who are risk-averse may prefer to skip this form of research entirely and focus solely on public records.

Law firms and investors can effectively navigate the somewhat daunting Israeli information landscape by enlisting the services of a dedicated investigative team. U.S.-based law firms and investors would be well advised to select an investigative services partner that both knows the Israeli research environment and has direct experience working on corporate contests.

¹ https://www.lexology.com/library/detail.aspx?g=ba2f264a-0a8e-4cad-9d20-9f56512d0d5e ; https://www.shibolet.com/wp-content/uploads/2019/06/Shareholder-Activism-Engagement-2.pdf ; https://www.shibolet.com/shareholder-activism-they-sharpened-the-sword-in-2017-where-are-they-headed-in-2018/

² https://www.lexology.com/library/detail.aspx?g=ba2f264a-0a8e-4cad-9d20-9f56512d0d5e

³ https://www.calcalistech.com/ctech/articles/0,7340,L-3731230,00.html

⁴https://www.reuters.com/article/us-mellanox-settlement-starboard/mellanox-starboard-settle-on-new-board-members-idUSKBN1JF2Z6