Digging for Disclosure: Tactics for Protecting Your Firm’s Assets from Swindlers, Scammers, and Imposters

4. The Gray Area: Somewhere Between Fraud and Fudging

We are not clairvoyant. What we do know is that past performance is often indicative of future behavior. It sounds so simple, yet it is often overlooked. Knowing an individual’s past is a helpful clue. We have found CFO candidates who had filed for personal bankruptcy protection, self-dealing entrepreneurs who insulate themselves to avoid responsibility, and CEOs who attempted an IPO despite the fact that the SEC previously sanctioned them and prohibited them from acting as an officer or director of a publicly traded company. These situations pose inherent problems that can often be resolved through additional avenues of investigation or clarification from a number of sources. Sometimes, ...