What Data Leaks Teach Us About Due Diligence

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What Data Leaks Teach Us About Due Diligence

Hundreds of companies and businessmen have been implicated in one of the biggest scandals in recent years. The leak of four decades of documents belonging to a Panamanian law firm that specialized in setting up offshore companies has shocked the entire business environment. The impact of such a leak is global, and nothing proves it more than the fact that even Russia and president Putin have been tied to a scandal that happened in a developing country on the other side of the world. Russian private investigators are already seeing an increase in company verifications and due diligence in Russia due to the negative effects of the scandal, and the effects on business will be felt soon.

The reasons for the controversy with Panama Papers are many. The first and more obvious is the participation of very reputable businessmen, media and political figures. Most of the media coverage has focused on the names that sound familiar to everyone, but many are individuals and companies you’ve never heard off. Tax evasion has now become a primary target for corrupt governments hoping to cash in and punish the “rich” rather than control government spending.

This has had an enormous effect on international due diligence processes all around the world. The scandal has been a warning to firms all around the world that they cannot be complacent about their obligation to know their customers and to perform international due diligence on all of their business associates. If you’re investing overseas, the last thing you need is negative publicity by getting involved with a name or names caught up in a scandal. Investigators can help screen them.

Governments across the world, including the United States, have initiated investigations of possible financial wrongdoing by the rich and powerful after the leak. But not only the legal implications should concern us. Businessmen and investors can lose a lot of money and their reputation if they end up being linked to scandals like this. That is why hiring professional private investigations in Russia is so important for any company or investor. Verify first rather than learn the hard way.

No wise investor would like their money put in a company with a bad reputation, and no company wants to be linked to any scandal or to lose money because of it. That is one of the main reasons why professional investigation firms conduct verifications and due diligence. Reducing the risks and liabilities is part of the initial process when engaging in any new business deal, and it is a continuous process along the whole life of a business relationship. Verifying an individual or company overseas requires highly trained investigators who speak the language and have access to local records.

But there is something else to learn from the Panama Papers leak. Companies need to trust the firms they provide their most sensitive and confidential data to. For companies or individuals looking to engage the services of a firm, this incident and others like it suggest that it is no longer enough to simply assess the reputation of a firm or its attorneys. A thorough assessment of a firm’s information security practices should now be considered a part of due diligence before even considering transferring sensitive files or data to a third party, whether it is a law firm, partner or a contractor.

Russian private investigators advise that organizations that fail to take such considerations into question risk having their most sensitive information and details of their private and financial lives laid bare for all to see. Before you invest, consult a professional about the risks. Contact us today!