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Charles Griffin Intelligence Launches Bad Actor Due Diligence Service

Press Release – As hedge funds rush to comply with new SEC rules that mandate the detection and reporting of “Bad Acts” by directors and others, they are faced with the requirement that they conduct a kind of due diligence that is unfamiliar territory: examining not only company balance sheets and managers’ skill, but the financial and legal background of people who may be complete strangers.

“Overnight, hedge funds have a ton of extra work to do in order to keep regulators happy. They can’t just rely on representations from big investors, directors and others. They have to conduct their own due diligence on a wide variety of people and that is not something they are used to doing,” said Philip Segal, founder of Charles Griffin Intelligence.

In response to the requirement that funds now examine not just current but also past bad acts of a wide variety of people associated with their fund, Charles Griffin Intelligence has launched its Bad Actor Due Diligence Service. The service will act as a hedge against the SEC’s expanded regulatory oversight, and will ensure that fund managers demonstrate that they have taken reasonable steps to check the financial and legal backgrounds of larger investors, managers, executives and marketers of their funds.

“Our service goes beyond verification of material that big investors or directors may submit to the fund. We go out and look for court actions, restraining orders and other potentially damaging information that’s usually not available on the internet,” said Segal. ”

Hedge funds that rely on simple representations by major investors, managers and directors are taking a risk that if one of those people turns out to have been a “bad actor” as defined by Dodd-Frank and the SEC, authorities could decide due diligence did not take reasonable steps to discover a bad act. Simple desktop computer searches and superficial reference inquiries may not be enough to guarantee SEC compliance.

“What a fund gets from us is not a certification that someone’s a ‘good guy’ or ‘not a bad actor,'” said Segal. “What we offer is the exercise of reasonable care in checking someone out. That’s the standard the SEC wants to see, and that’s the standard we adhere to in all of our searches.”

Segal added that although the Bad Actor due diligence may be new for hedge funds, the process Charles Griffin Intelligence is following is the same as for most other kinds of due diligence the firm has been hired to do for years. “Whether it’s looking at a person who stands to run a $20 million business, sit on a corporate board, or is on the other side of a court case, we look for information in all the same databases and public records sources,” said Segal. “This kind of due diligence is new for hedge funds, but for us it’s business as usual.”

About Charles Griffin Intelligence:

Founded in 2009, Charles Griffin Intelligence is a consulting firm specializing in corporate due diligence, litigation support, asset searches and recovery, and overall business intelligence for large and small law firms, companies, financial institutions, and nonprofits, as well as individuals who want to protect their best interests and make themselves safer.

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