Artificial Intelligence (AI) is sweeping the merger and acquisition industry to enhance the due diligence process. However, AI engines are only as good as the data that is fed into them. Because not all historical data is electronic, it cannot be relied on for background check reports.
It is common that electronic access to public information – such as criminal records, civil litigation, liens, judgments, bankruptcy filings, regulatory filings, and other information – may be limited to geographical areas, a certain number of years, select courts, and types of record sources, not to mention that every jurisdiction is managed differently so there are other inconsistent variables across the U.S. There is no national repository and no universal approach to requesting public records and any provider who tells you otherwise is spreading misinformation, risking unknown gaps and leaving you vulnerable to other uncertainties.
This issue is just one of many reasons why you need professional investigators to support your due diligence and background investigations. In addition to the collection of information, the discernment and analysis of the records to ensure it pertains to your subject is crucial, especially when records are comingled with similar names, common names, or relatives. This holistic approach is paramount to LexPro Research’s research methodology.
LexPro Research, celebrating 20 years of servicing the financial and investment banking communities, is committed to excellence in providing accurate, thorough, and robust reporting for its clients.
Learn more about us at LexProResearch.com or call (203) 921-1281 for a consultation.
As history has shown, public agencies and regulatory bodies cannot protect everyone all the time – one need look no further than Bernard Madoff. You can no longer do business with someone based solely on the fact the individual is “respected” or has “proven” returns. Companies and business people must now rely on as much independent and objective data they can reliably obtain to make well-informed decisions.
LexPro Research’s partners have worked at top-tier investigative firms and name brand accounting firms, so we can provide the same high-quality research and results, but at a fraction of the price. Our team has more than 50 years of collective industry expertise to leverage for its clients. LexPro Research’s process leaves no stone unturned. Our in-depth research and analysis create a comprehensive and insightful report for our clients, typically within five days or less. Occasionally, we can accommodate shorter timeframes – even 24 hours or less, depending on information availability. If any adverse red flags are uncovered, LexPro Research alerts its clients immediately. LexPro Research’s fast turnaround and quality of intelligence distinguishes it from other firms.
It is estimated that approximately 35% of public records are available online, according to a leading public record source publication. Contrary to what is portrayed in the media, there is not one massive computer or database – not even the Internet – that stores all known information on a person or a company. Although the growth of online sources and the volume of information they contain are massive, a significant amount of information is not available online, especially if you need international business intelligence where privacy laws, such as in the EU, play a critical role in information security. LexPro Research delivers consistently with its research experience and knowledge to support its clients’ needs, whether it is a domestic or international requirement.
Furthermore, finding information in today’s content rich world is not always the difficult part. Information can be found in hundreds or even thousands of places. The critical component is sifting through the data efficiently, vetting it for accuracy and reliability, as well as analyzing the information and distilling it to only the most relevant and meaningful elements. Other firms will provide data dumps leaving you to do the additional work.
The most traditional records sources – local, state, and federal agencies, and of course, the library – have always been publicly accessible, as are many online resources. However, professional researchers and investigators can search and obtain information much more efficiently and accurately. Equally important to where information is located, is how sources are searched. Most due diligence and background investigations, especially in the United States, include many of the same public sources, such as criminal records; civil litigation filings, including bankruptcy, liens, and judgments; regulatory filings; Secretary of State filings and corporate records; property records; media reports; and of course, the Internet.
But how these sources are searched can make an enormous difference in the quantity, quality, and reliability of the information returned. Take something as widely available and powerful as Google, for example. How the average or even business savvy person searches Google compared to how a professional utilizes it, can produce vastly different results. Using various keywords, search strings, and a combination of phrases or wildcards will reveal different information. In other words, most people can add, subtract, multiply, and divide – yet many still rely on an accountant to prepare their taxes.
Like other services, costs can vary depending on the depth of research and level of detail. Although LexPro Research has hourly billing rates, we typically undertake work on a project basis that normally offers a discount or economies of scale. For example, if we conduct research on several individuals, relating to one transaction, such as the CEO, CFO, and COO of a company, and one person requires more research than another, we can often balance costs out across the entire project. We can also tailor a scope of work and related costs to match a particular deal’s “size.” Our work product is equal to, if not better than, some “name brand” firms – but at a fraction of the price. Most importantly, due diligence can not only help protect from actual losses, but also help mitigate against further losses – namely potential liability claims in the event an investment fails. Thusly, when it comes to cost, remember that proper due diligence is usually a fraction of the overall investment.
Conducting a background check is in many ways like solving a puzzle, connecting the dots to complete a picture. At LexPro Research we start with a basic foundation of information and then dive deep, layering our investigation using multiple resources to gather the detailed intelligence needed to verify every angle to ensure accuracy.
As an example, a client engaged LexPro Research to screen a dozen senior executives and research on multiple companies in their portfolio. Each bio had complex and lengthy profiles with multiple red flags, such as:
Unlike our competitors, LexPro Research searches in multiple jurisdictions, namely where subjects lived, worked, and went to school. Then, we dive into federal, statewide as well as countywide records to uncover and piece together the puzzle, understanding also that many county records do not find their way into statewide databases which many competitors will miss. And, equally important, not all public records are electronically accessible and manual intervention is required.
Leveraging private investigative database records, secretary of state data, police arrest records, media articles, and various other investigative sources and public records help complete the picture of gathering the intelligence, all while not using AI tools or a computer algorithm, but with actual human analysis and critical thinking from a professionally trained and experienced research team who rule in and out records discerningly.
Don’t leave blind spots or gaps in your research. LexPro Research’s holistic approach with in-depth research methodology and detailed and timely intelligence reporting sets up apart.
The client was looking to acquire a prestigious beverage company and requested background checks on six executives managing the company. Internal and external investigative checks had already been conducted by another provider – “no records found” – LexPRO was asked to confirm the findings. Five were clean. The CFO of eight years was…suspicious.
This CFO was careful and clever. Decades of fraud, embezzlement, obstructing the IRS, even prison time, and still she was able to evade authorities and not trigger red flags on background checks. Why was LexPRO able to expose the truth?
Our approach to research analysis and investigative probing has proven deeper, broader, and more exhaustive than standard approaches. Thanks to a proprietary year-long training process for our people, plus a policy of multiple criminal checks and a wider range of database sources, we uncover what others cannot.
The reason for our track record? LexPRO’s signature vetting applies to our own team.
We painstakingly recruit investigators and research analysts who have a tenacious ‘sleuth’ mentality. They love to dig. They don’t settle for face value. They relentlessly peel the proverbial onion until they uncover the real story.
Getting it right saves time, litigation, embarrassment – and potentially millions of dollars. If your deal/hire/board appointment is worth getting right, it’s worth getting LexPRO. Contact us to experience a more diligent approach to due diligence. Our team is eager to perform for you.
A client engaged LexPro Research LLC to screen several senior executives, who were previously screened by another firm that found “no records.”
The executives all lived in Connecticut, where no records were found. However, for the past 20 plus years all the executives have worked in New York City. Using their human brains and thinking, LexPro Research’s highly trained and professional staff knew to conduct research in that jurisdiction as well. The additional research revealed one executive had a criminal record in New York.
The previous screening by another firm appears to have been performed with very little care or thought – likely because it was based on an automated screen scraping algorithm that only saw Connecticut addresses thus searches were only conducted there. Moreover, not all public records are available electronically or online. In many cases, manual field record searches are imperative; followed by human analysis, to assess relevance and accuracy.
A year later, the client asked LexPro Research to refresh, or update, the background check. LexPro Research again uncovered the same executive was charged with another offense in New York. Again, the record would not have been found if the search was only conducted in Connecticut, where he still lived.
While computers, the internet, and artificial intelligence (AI) can all be wonderful things, they need to be augmented with actual human thinking. And not to put too fine a point on it, but artificial intelligence (AI) is just that – artificial, false, fake, reproduced, simulated, imitation – and not genuine intelligence.
Searching in only one area – because that is only what the computer algorithm “sees” – can leave blind-spots or gaps in the research.
LexPro Research’s holistic approach is what sets it apart.
