Due diligence is another word for investigation.  Due diligence is conducted to investigate and evaluate an investment concerning all relevant aspects including compliance with state and federal securities laws, background of the company’s management, the investment promoter, the broker-dealer and the financial advisor, the investment structure, represented returns on investment.

There are many reasons for conducting due diligence, including the following:

  • Confirmation that your financial advisor is disclosing all material facts about the investment;
  • Confirmation that the investment is what it appears to be;
  • Verify that the people promoting the investment have complied with state and federal securities laws; and
  • Verify that the investment complies with your investment criteria, i.e., suitable for you based upon your age, income, net worth, objectives, risk tolerance, family needs, liquidity needs, contingent liabilities, etc.

On behalf of our clients, we have investigated private placements in securities of business across the spectrum of industry, startup companies, new investment products offered by broker-dealers and investment banks, derivative products, etc.

During our due diligence, we have often uncover many material red flags that the financial advisor or investment promoter never told our client.  These red flags include negative information about managements’ background (including prior misconduct in selling securities), failure of the securities issuer to comply with state and federal securities laws, failure to provide verification of representations concerning the represented business, etc.

Every year investors in America lose tens of billions of dollars to investment fraud.  Investors can take one simple step to increase the odds that they will not suffer that fate. Retain Wittenberg Law before you invest.

During our due diligence process we collect information from you about your investment criteria and profile, as well as from the investment adviser or stock promoter about his or her background, investment documentation, third party vendors and references.  We also obtain representation from the investment adviser or stockbroker that he or she will update the information provided to us upon such information becoming incorrect. At the conclusion of this process, we provide a Red Flag report identifying items of concern.

We provide our due diligence services on a single investment basis, single broker check basis, or an ongoing monitoring process.  The ongoing monitoring process is critical in identifying the bait and switch schemes that financial advisors all too often engage in.  We will conduct a monthly review of your account statement to identify account irregularities arising from excessive transactions, cash withdrawals and asset transfers.  We then provide a monthly report informing you of our findings, even if we find no irregularities.

Call us to discuss your situation on a confidential and complimentary initial basis.