By Josh Oswalt, Associate, Forward Risk and Intelligence
Picture this – after watching an episode of the NBC series Who Do You Think You Are?, you become interested in learning more about your family’s history. You start writing down what you know about your parents’ and grandparents’ lives, you do some online research on popular websites like Ancestry.com and Geni.com, and you call up an older relative to take down some notes on their life experiences and family lore.
These sorts of approaches in genealogical research – fact checking, following leads, and utilizing personal identifiers – are also essential elements of other kinds of investigative work.
In fact, as an amateur genealogist myself, I was initially drawn to working at Forward Risk in part because our investigative research for clients – whether for shareholder activism, pre-investment background checks, strategic intelligence, or a wide range of other practice areas – involves methodologies that are strikingly similar to those used in genealogical research. These methodologies, when properly applied, can streamline the research process and provide significant value for clients.
Consider the following scenario. Suppose that a client engages us to conduct research on a large family-run investment office with a highly international presence and multiple family members involved in management and financial dealings. No account of such an office would be complete without providing the client a detailed mapping-out of the financial and interpersonal relationships between these related individuals.
Even in cases that don’t involve looking at multiple individuals in a family directly, genealogical research methodologies can provide important insights.
Consider another typical request from a client – they would like an investigations firm to conduct a pre-transactional investigation into a company executive as part of their due diligence process. Suppose that this executive is named John Jones – one might wonder where to begin, given how common this name is.
When looking into this executive, comprehensive investigative research would include any middle name, nicknames, name changes, and whether a parent or child shares the same name. As genealogists know, these name details and other personal identifiers such as dates of birth and residential information can be found in court records, county clerks’ records, censuses, Department of Motor Vehicles registrations, voter registrations, yearbooks, social media profiles, and a whole host of other sources.
It is not unusual to have clients request research that spans not only multiple U.S. states but also multiple countries. Consider, for example, a client interested in gaining a comprehensive understanding of a company executive’s property holdings, financial dealings, and legal exposure across North America, Europe, and Asia.
This focus on comprehensiveness would also resonate with genealogists, many of whom are familiar with on-site records checks, inquiries into family properties passed down through the generations, and traveling to foreign countries to see the areas in which their ancestors may have once lived.
Identifying data points alone is not the goal of either genealogical research or investigative due diligence. In both cases, there is an interest in capturing a true profile of someone. A genealogist might ask: What was this person’s life like? Why did they make the choices in their life that they did? What did other people think of them, and are they noteworthy in history for some reason?
The best investigators ask questions in the same spirit: What is this executive’s professional track record, and are they likely to come under scrutiny on a new company board given their previous exposure to civil litigation or regulatory action? What do their former colleagues say about their management style, and are there any red flags? Do they have a history of making controversial statements on social media that might attract unwanted public attention?
These data points, when aggregated and analyzed, give clients unmatched visibility into not just what people and companies have done, but why they have done it. Connecting the dots creates a holistic profile of individuals and companies, leading to actionable insights for clients.
Genealogical research is fundamentally community-oriented: getting insights and information is most often successfully achieved through building and drawing on the knowledge and lived experiences of others.
For example, an interview with one’s grandparent about their life can yield personal information about their family and life growing up that simply would not be accessible, visible, or knowable to the genealogist via other means. Adding this human element to the research process is a critical source of information.
In a similar way, the best investigators draw on sophisticated, bespoke, and carefully-curated interviews with individuals who are familiar at some professional level with the executives and industries about which clients would like to gain a greater understanding.
Targeted outreach to those individuals, who are able to speak with candor and professional authority on the topics in question, provides a separate stream of information that helps create a nuanced and informed individual portrait for clients.
When all of these insights are aggregated, it’s clear that expertise in genealogical research methodologies brings a differentiating edge for investigative due diligence.
These sorts of research projects are best handled by a creative, multidisciplinary team of investigators who will try out different approaches and look in places others might neglect or overlook. This is where genealogical expertise can add value on top of the skills honed through more traditional backgrounds such as journalism and law enforcement.
By Max Cohen-Casado, Senior Associate, Forward Risk and Intelligence
Over the past few months, I’ve read a lot of articles from my contemporaries within the investigations industry about ESG. I read about the difficulty in measuring ESG amid a lack of standardized metrics, the increased awareness of investors and boards concerning ESG issues, the heightened ESG oversight from financial regulators, and an analysis of the merits of qualitative versus quantitative ESG measurements, among other topics.
I noticed that many of these articles were high-level, theoretical discussions filled with jargon that make them difficult for the average reader to parse. These authors often highlighted their own firms’ abilities to provide a “360 degree view” of a target company’s ESG standing, but seldom did I read an explanation of how exactly they would actually go about providing that comprehensive analysis. Here, I hope to fill that gap.
I like to start my investigations first by analyzing a company’s environmental track record. There is certainly more to the “E” part of ESG than just environmental violations. Issues such as supply chain oversight, use of renewable energy sources, and waste minimization are important, but searching for a company through relevant environmental regulatory databases can still provide valuable insight.
Normally I start by looking for media references to a company’s environmental track record. To find these I’ll search the company’s name alongside a curated string of words that are frequently used as markers of an adverse finding. The specific words that are included in this search string vary depending on the type of industry. I’ll also search the company’s various affiliates; oftentimes construction companies or energy companies will create separate entities for each development or project.
Next I’ll conduct a search of the EPA’s Enforcement and Compliance History Online database, followed by searches of state and local environmental databases, depending on the company’s jurisdictions of operations. Executing these types of searches provides a decent baseline and is an easy way to identify any glaring environmental red flags. However, they do not provide the full picture.
Often, the best way to get a more comprehensive understanding of a company’s environmental standing is through human intelligence or source inquiries. In previous cases we have conducted, interviews with a company’s former employees have uncovered lackluster adherence to environmental standards and blatant safety violations, among other environmental red flags.
The “S” component of ESG has become increasingly important as consumers feel the need to purchase from corporations that share their values. Recognizing this need, corporations often go to great lengths to make themselves appear to be responsible, inclusive, and fair employers.
As before, I usually start off in a search engine to catch any glaring labor or discrimination abuses that may have been picked up by mainstream media. I’ll once again use a search string that includes words commonly found in media reports about wage theft, union issues, or workplace harassment, or other typical “social” violations.
Next I’ll search PACER, the federal litigation database, for lawsuits pertaining to workplace discrimination or other labor-related matters. To find these relevant lawsuits, I’ll use the database’s filters to only search for specific “nature of suit” codes; these are usually Civil Rights 442: Employment and Labor 710 to 791, which include Fair Labor Standards Act, Family and Medical Leave Act, and Employee Retirement Income Securities Act cases.
After searching for litigation, I’ll delve into several regulatory databases. Both the National Labor Relations Board and the Occupational Safety and Health Administration have great internal databases of complaints and investigations into employers about pay violations, union disputes, unsafe working conditions, and other potential issues.
Another important source to search is employee review websites such as Glassdoor. Although some of the reviews may come from former and likely disgruntled employees, I try to look for patterns in the review. Sure, one complaint about sexist leadership may not be indicative of much, but four or five comments about a “male-dominated leadership” or a “good-ole-boys club” starts to paint a more compelling picture.
Finally, I’ve found that a great way to understand a company’s intentions is by looking at their political contributions. Occasionally, media sources will highlight examples of corporations donating to candidates and political groups that contradict their stated values. If these donations are not covered in the media, I’ll then look through the FEC’s database of contributions, then move on to state-level databases. Searching donations from the company’s top executives as well as the company’s affiliated PAC often reveal a stark contrast. All too many times I’ve seen companies that tweet about how inclusive they are, and how much they value their employees, then donate thousands and thousands of dollars to politicians that vote in favor of restricting LGBTQ rights, unionization rights, and other worker rights.
Corporate governance can seem challenging to measure, largely because of the high volume of components needed to evaluate, many of which are subjective and open to interpretation.
Fortunately for us, proxy advisors, the most well-known of which are Glass Lewis and Institutional Shareholder Services, have complex models on what good governance looks like. Every year, they publish annual reports with explanations of their recommended best practices; these exhaustively detailed reports explain their criteria for inclusion on a board’s committees, recommendations for executive compensation structures, guidelines for board diversity, and suggestions for shareholder voting protocols, among other information. Other institutional investors often publish reports in which they indicate how they intend to vote on governance: I also look to these sources for guidance.
One component that particularly interests me is board independence: are “independent” directors actually independent from the company’s executives? For each member of the board, I’ll create a list of their affiliations. While some of these affiliations are pretty easy to find, more thorough research is often required to find more elusive connections.
Once this extensive list is created for each board member, I can cross-reference and look for connections that may not have previously been disclosed in SEC filings. In previous cases, my colleagues and I have found a CEO and a supposedly independent director that were actually longtime golfing buddies at the same country club; an “independent” director who was the principal of the CEO’s children’s school; and a “independent” director who was the nephew of the chairman’s longtime professional mentor.
Another aspect of governance to watch out for is executive compensation structure: how much of it is tied to company performance, and how much is tied to ESG metrics? These sorts of compensation structures are increasingly common, and companies who employ them are typically not shy about it.
I like to look for not just if compensation is tied to ESG, but how much of it? A company’s proxy filings will usually delineate how executive pay is calculated. In addition to the percentage of pay tied to ESG, these filings will also reveal which ESG metrics the company actually uses. As noted previously, there is a lot of disagreement about which ESG metrics are best, so each company measures its ESG performance in a different way. Despite this ambiguity, I find that seeing an explanation of both how much pay is tied to ESG, and which criteria are actually used, I can better understand if a company is actually interested in pursuing ESG goals or if it’s simply paying lip service to a trendy concept.
By focusing on what an ESG-focused investigation actually looks like in practice, I hope that I was able to cut through the fog to make the process more tangible. Now that the concept of ESG-minded investing is so widespread, I believe that discussions moving forward can be focused more on the implementation of the investigative process and less on highly abstract and conceptual discussions.
By Paul Sebastian, Senior Associate, Forward Risk and Intelligence
As many hard-core true crime fans might know, in criminal forensics, there is a general rule known as Locard’s exchange principle. This principle states that when a crime occurs, the perpetrator will bring something to the crime scene and leave something at it.
While most researchers in the due diligence industry do not typically have a background in criminal investigations, a modern corollary to Locard’s principle is important to keep in mind: whenever an individual touches the internet, that user brings something – usernames, IP addresses, email addresses, etc. – and will leave a trace of their presence. Searching for and finding these traces on all three layers of the internet is a hallmark of an expert open-source investigator.
The internet is generally broken down into three layers: the surface web, the deep web, and the dark web.
The surface level is where web crawlers index websites and information, making it discoverable to researchers via search engines like Google or Bing. On this level, an investigator conducting research on a company executive, for example, may find news articles and profiles on popular social media platforms like LinkedIn. The use of advanced Google operators – known as dorking – can reveal otherwise buried search engine results, but this layer is still dependent on the indexing of the website on which the information resides. The information garnered from surface-level searches would be the equivalent to a detective finding broken glass at a burglary scene: it is valuable evidence, but its discovery is only the tip of the iceberg.
Just below the surface of the internet lies the deep web – which is far more interesting from an investigative perspective. Experienced and knowledgeable investigators with a strong attention to detail can exploit this layer to discover very valuable results. This layer of the internet encompasses hard-to-find or otherwise forgotten information such as legal and academic records, foreign language databases and sources, subscription-only information, and archived versions of websites. Web crawlers do not, or cannot, index this portion of the internet.
According to estimates from 2001 (the most recent available), the surface web contains 19 terabytes of information, while the deep web contains 7,500 terabytes, and since then the divide has grown exponentially, with more recent estimates placing just 1 percent of all information on the internet in the surface web. Examples on this layer of the internet include local court records and information found on genealogy sites like Ancestry.com. No amount of research using a search engine will uncover the valuable information found on this layer of the internet.
There is one final layer that experienced investigators search: the dark web. This layer is intentionally hidden from normal search engines, and its data is encrypted, requiring a specific web browser to discover. While there are legitimate reasons to use the highly-private dark web, it is on this layer that researchers will most likely find illicit activity and compromising information.
One of the most important pieces of data found on the dark web is data breach information. After a hacker steals log-in credentials from a website, these credentials will often appear on the dark web. Reviewing these compromised credentials – usernames and email addresses – may inform further surface and deep web searches, revealing previously-unknown social media profiles or blog activity. Finding these hidden or obscure social media accounts may provide greater Insight Into a subject’s personal connections, Interests, and history, which the subject may have believed was safely concealed behind an alias username, thus providing an investigator with greater insight into a truer picture of the subject aside from a carefully curated public persona.
There is also a thriving dark web market for the login credentials of users at websites containing extortionable information, such as Ashley Madison and Epik. Discovering that a subject had an account on these controversial sites can be a key piece of information when constructing a holistic picture.
Together, information found on the deep and dark web is the nonobvious evidence akin to a crime scene technician lifting fingerprints, documenting DNA, or finding other clues not readily apparent to the naked eye.
At Forward Risk, our trained and skillful investigative team frequently provides clients with insight into the hidden characters of our subjects. Our reports include extensive deep web research, as well as a section dedicated to dark web research. This has provided clients with industry-leading insight into subjects of interest. The following examples show how Forward Risk’s deep and dark web research skills can provide more actionable information than research that focuses only on the surface of the web.
One important facet of deep and dark web research is the investigation of known IP addresses and web domains for a subject. In one case, our researcher discovered several inactive web domains previously registered to a subject. It was discovered that this otherwise-unassuming subject had once registered several questionable, race-related domain names that raised concerns about their judgment.
Often, sexual behavior and proclivities are a source of controversy and risk, but knowing this, people often attempt to obfuscate their activity online. One of our investigators was conducting opposition research on a political candidate and, using an email address discovered on the deep web, uncovered this candidate’s account on an adult website, in which he commented on videos “grading” women and made demeaning comments about his wife. In today’s political climate, this information can end a candidacy without further argument.
Information found on the deep and dark web can also inform a client on how to interact with a potential business partner. In one case, an investigator was conducting due diligence research on the founder of a tech startup seeking an investment from that client. Dark web research easily identified the passwords for several of the founder’s email accounts, all of which were common words easily brute forced by a computer program, meaning a computer program could easily guess the password. This signaled poor IT security practices, which does not augur well for the founder of a tech company, and it gave our client the knowledge that communications with the founder were vulnerable to a leak or hack. (A quick disclaimer when accessing dark-web data: Open-source researchers must take great care when accessing dark and deep web information, adhering to all applicable laws. Any passwords that may be discovered during research cannot be used to gain unauthorized access to any computer system.)
These examples show the value of research that goes beyond the surface level. By engaging professionals with expertise in deep and dark web investigations, clients seeking information about an executive they are planning to hire, or a company in which they plan to invest, may rest assured that they will be armed with comprehensive findings with which to make an informed business decision.
WASHINGTON–(BUSINESS WIRE)–Forward Risk and Intelligence is proud to announce that legendary corporate investigator Ernest Brod, founder and CEO of Brod Global Intelligence (“BGI”), has joined its Advisory Board. Brod will continue to lead BGI as CEO.
Brod founded BGI after an unparalleled career in the investigations sector. He was most recently a Managing Director at Alvarez & Marsal, leading the firm’s business intelligence practice. Prior to that, he held leadership positions at Deloitte FAS, Navigant Consulting, and Kroll.
Alongside Brod’s appointment to Forward Risk’s Advisory Board, the two firms are partnering to offer their clients industry-leading investigations services. Forward Risk’s lean and nimble in-house operations, combined with BGI’s decades of expertise and global network, will offer both firms’ clients cutting-edge intelligence on matters including proxy contest defense, asset traces, and executive- and director-level due diligence.
I’m pleased to join the Advisory Board of the gold standard in U.S. investigations. This partnership with Forward Risk will bring to BGI the experienced, capable resources to extend our leadership position in corporate contests, global asset searches, and cross-border due diligence.
— Forward Risk Senior Advisor Ernest Brod
Forward Risk is a corporate investigations, intelligence, and risk advisory firm that provides tailored investigation and litigation support, investor due diligence, and strategic intelligence services. Our unique approach combines well-honed industry savvy with bespoke reporting to deliver value-driven information tailored to meet complex client needs. Staffed by a diverse team of professionals including former attorneys, investigative journalists, intelligence community alumni, and other government affairs experts, we help clients navigate transaction and dispute lifecycles by providing investigation and litigation support, investor due diligence, and strategic intelligence services. We marry comprehensive rigor to the curation of narrative context, which ensures that our clients receive actionable intelligence in the unique context of their specific engagement and objectives.
Brod Global Intelligence (“BGI”) is a New York-based investigations and intelligence firm led by legendary corporate investigator Ernest Brod. BGI provides an array of specialized investigative services to attorneys, investors, and corporate executives, including litigation support, investigative due diligence, asset tracing, and fraud investigations. BGI sets itself apart by executing on the vision of its founder, a pioneer in the field who is committed to providing outstanding results for clients.
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 Krystal Ramirez, Director, Claire Vinocur, Associate Director and Andrea Tang, Senior Associate, Forward Risk and Intelligence
Traditionally, investigative due diligence and political opposition research have been considered separate fields. While both can be considered branches of risk advisory work, rarely have the twain explicitly met in the middle – which is surprising, given the tremendous overlap between these highly complementary subfields. Ultimately, the currency of both political campaigns and proxy contests is the notion of influence. While traditional political campaigns aim to influence voters, proxy contests similarly influence shareholders. Lobbying firms, in turn, influence decision-makers. In all three cases, professional researchers provide the ammunition behind that influence, using the power of carefully unearthed information.
As a result, experienced due diligence analysts and opposition researchers share elements of tradecraft including familiarity with database-driven research, comfort and creativity working with open-source intelligence, and high levels of attention to detail on tight, high-stakes deadlines. As Forward Risk partner Brendan Foo, director Krystal Ramirez, and associate director Claire Vinocur noted in a recent Directors & Boards article, “The Politics of Proxy Contests,” corporate proxy contests in particular bear remarkable similarities to political elections – to such an extent that the article’s authors propose that those hunting for success in a proxy contest may take valuable lessons from politics.
As they point out, in both realms, “winning candidates tend to be those who have researched themselves and their audience, built and engaged with a coalition of constituent groups and power brokers, and articulated a message to prospective voters that encourages them to turn out to vote.” In other words, investigative due diligence and political opposition research have far more in common than not.
So, if commercial due diligence and political opposition research draw on such similar skill sets, where does the difference lie? Primarily, their immediate context.
Despite the similarities in execution, we must keep in mind that findings in these two fields are tailored for fundamentally different audiences. An oppo researcher will customize their reporting to suit the needs of campaign’s communications and digital teams. Meanwhile, an investigator conducting research for a private sector due diligence project will aim to arm an investor with actionable business intelligence.
Lobbying firms are among the few client types that occupy something of a sweet spot between the public and private sectors. Although technically a private entity, the average lobbying firm builds its business model off an ability to sway political decision-making through the effective use of well-substantiated research and persuasion. In this sense, a lobbying firm has a foot apiece in two worlds: one strictly commercial, and one in the government sector. As government affairs-focused organizations, a knowledge of political campaigns and hot-button policy issues is crucial. However, unlike a political campaign itself, a lobbying firm’s lifeblood flows through its ability to generate commercial revenue.
So, given that it treads a line between the public and private sector, where should a lobbying firm go to address its unique needs: the veteran oppo researchers with their fluency in government affairs, or the commercial due diligence outfit equipped with the resources and understanding of financial clients who do business with lobbyists? The answer, in an ideal world, is both.
While the average risk advisory firm may not have always focused traditionally on targeting campaign staff for their recruiting efforts, it’s not a bad idea. A seasoned oppo researcher’s skill set includes not only subject matter expertise in local and national political landscapes, but also a carefully-honed understanding of the right questions to ask. When placed alongside a commercial investigator’s business intelligence savvy, the risk advisory firm makes for a potent combination for supporting a lobbyist’s needs – particularly when it comes to building well-substantiated policy arguments.
Simply hiring the right mix of oppo and commercial intelligence professionals isn’t enough, however – the firm must have the know-how to combine their skills in an effective interdisciplinary manner. An excellent example of this is the application of stakeholder mapping. Traditionally a commercial intelligence subfield, a researcher versed in stakeholder mapping can essentially apply this so-called commercial intelligence “playbook” to a government affairs case. By consulting with a good opposition researcher on the same team, the stakeholder mapping expert can determine the specific pain points of who to lobby, and how.
Another example is the use of source inquiries. When public records alone do not suffice, a well-equipped risk advisory firm may employ a source inquiries expert to interview select individuals who may have personal contact with a subject of interest. Combined with oppo know-how, this additional research toolkit can pay tremendous dividends in the lobbying world, where accessing otherwise difficult-to-find reputational information is paramount.
Countless examples illustrate the proof in the pudding regarding the success of an investigations firm that effectively employs researchers from both oppo and commercial intelligence backgrounds.
In one case, a government affairs firm required assistance for a client facing harassment from a political opponent in a foreign country. Combining the research know-how of investigators from both opposition research and traditional commercial intelligence backgrounds, Forward Risk’s investigative team was able to launch a deep dive investigation into local-language media and public records in several countries that ultimately uncovered a decades-long track record of involvement in organized crime, money laundering, and public corruption. Forward Risk developed both a detailed investigative report and a set of concise talking points to assist the government affairs firm in its discussions with key members of Congress.
In another case, a client requested that Forward Risk provide background information regarding several nominees for a major federal government position. The government agency in question held significant influence over potential business opportunities for the client due to the client’s investments in the industry. As a result, the client was interested in the shortlist of nominees for the position of agency chair.
Accordingly, Forward Risk leveraged a combination of traditional due diligence know-how and political vetting strategies in order to obtain the necessary information. In particular, Forward Risk’s team carefully identified the subjects’ views on specific policy areas most likely to impact the client’s investments in the industry area. As a result, the client was armed with information that would enable them to lobby for the nominee most beneficial to their business interests.
By Daniel Greenberg, Partner, Forward Risk and Intelligence
The phrases “open source” and “public record” are sometimes mistaken for “easy to find.” While it’s true that open source records are largely accessible to anyone, locating the relevant facts can be akin to finding the proverbial needle in a haystack. Many research projects necessitate the services of trained and experienced professionals. This applies especially for research that is investigative, requiring a systematic approach to discovering and exposing hidden facts.
This truth is not always clear. Lawyers, investors, and other white-collar professionals who occasionally conduct research as part of their normal job duties logically consider it one of their strengths.
The temptation to simply “Google it” is understandable.
However, there are serious drawbacks to an informal approach to investigative open source and public records research. Corporate intelligence, due diligence, background investigations, and litigation support require specialized techniques, devoting sufficient time and resources, and working on tight deadlines. In other words, investigative public records research should be treated as a specialized skill and service. Indeed, it is worth remembering the stakes involved in such projects. A mistake, error, or omission can have harmful consequences, such as:
But what really differentiates such a professional’s investigative research process from the more casual approach? The basics can be summed up as follows:
A corporate intelligence professional must have an advanced level of knowledge across several subject matter domains, including law, capital markets, finance, fraud prevention, international and domestic politics, real estate, media, and social media. A researcher must likewise be capable of quickly getting up to speed on a wide variety of different regions and industries.
On one recent matter, Forward Risk’s research into a South American businessman found mysterious business links to the sons of a high-level politician, disproving earlier claims that he separates his business life from his political activities. Assessing the issue required a close examination of business and financial records combined with a nuanced understanding of the political environment.
Common access restrictions include hefty subscription costs, lack of online availability, and limitations on who is allowed to conduct searches. Data access varies tremendously state by state, and country by country. Investigative research specialists are experts in solving data access problems and ensuring that research is as accurate and comprehensive as possible.
For example, a client once asked us about a supposed “criminal” record that someone else had brought to them as a “red flag.” Forward Risk knew the state’s records well and used a subscription-based remote access portal to find out more. The matter turned out to be nothing more than a routine speeding ticket.
A trusted, licensed private investigations agency also has access to certain proprietary databases that must be used very carefully, and only in approved circumstances, because they contain sensitive personal data. These resources are very valuable for investigators.
For example, through the use of such databases, we have found addresses for vacation homes located far from where subjects ever claimed to live or work. With new geographic areas to focus on, we have been able to reorient our searches and uncover litigation and other risk issues that would otherwise have been missed.
A simple error on search input, such as a misplaced comma or the lack of a necessary asterisk, can cause an inexperienced researcher to miss the project’s key finding. Failing to identify and account for name variations can ruin any name-based search. And when there are hundreds or thousands of results to sort through, a researcher must work carefully and strategically to home in on the important matters.
During a pre-investment due diligence project, a search on a very common name in California state courts resulted in dozens of “hits,” but few details were online about the cases. With investigative rigor, we narrowed the list of cases down to a handful of the matters most likely to be relevant. We were then able to engage a court runner to retrieve key documents, ultimately uncovering an allegation of violent conduct by the subject of our review.
A casual research approach will usually involve making assumptions about where relevant information is most likely to be found, and focusing all efforts on just those data sources. An effective methodology, however, covers a far wider array of searches, because key findings often show up in the least expected places.
One example is the practice of examining the track record of each company where a person has served on the board of directors. Less experienced researchers often skip this crucial step, or approach it in an insufficiently targeted fashion, thereby failing to develop truly actionable intelligence for clients.
In support of a proxy contest matter, we once found that a certain board nominee had previously been on the audit committee for a company accused of committing serious account fraud. When the proxy battle was settled, this nominee was not included on the board.
Someone who is not a full-time specialist in open source and public records research may waste much time and energy. It can take hours to simply figure out what records are available and how to search them. Investigative professionals have done this legwork already, and they can also leverage their past experience to avoid making costly missteps. Researchers can also brainstorm challenging problems and share best practices with their team or professional network.
Perhaps the most important value-add that a corporate intelligence professional provides is also the hardest to explain: the investigative instinct. Key qualities include curiosity, creativity, diligence, persistence, logical reasoning, and focus. Top-flight researchers know instinctively which leads to pursue (sometimes for hours), and which “rabbit holes” to avoid.
As just one example, a researcher’s meticulous review of county recorder data found a seemingly anodyne “agreement” filing, that upon closer inspection revealed a business executive’s personal financial distress.
These examples illustrate the value-add of a corporate intelligence professional in conducting open-source and public records investigative research. Once fully grasped, the contrast to an informal, casual approach is quite clear. Forward Risk’s professional researchers can save clients time and avoid costly mistakes by leveraging all of the information that open-source records can provide, leaving no stone unturned.
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.
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.”
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
Growing and developing your skills as an investigator starts with receiving feedback from peers and learning from that feedback. But what if you’re not receiving the guidance you need to take the next step?
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.
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.
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.
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
Investigations firms, like many white-collar employers, are grappling with changes to the workplace sparked by the COVID-19 pandemic.
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.
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.
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.
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.
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.
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.
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.
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.