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

7. Digging for Disclosure

In many corporate scandals that received massive media attention between 2000 and 2004, the problems of the executives under investigation were the same: disclosure. Martha Stewart did not disclose the reasons for her famous ImClone stock trade. Enron officers did not disclose all the details regarding the company’s financial status. The investment banking houses were fined for not properly disclosing the actions and timing of trades and relationships between the buy and sell sides, or for not disclosing the backdating of options granted or subprime mortgages bundled.

In the world of conducting character and integrity background investigations, nondisclosure equals dishonesty, and dishonesty is often a clue to other ...