Through the years, A&M’s Global Investigations and Intelligence practice has served as a leading-edge indicator of “what keeps us up at night”-types of concerns for lawyers and C-suite executives. The economic crisis in 2008 created a need for business-savvy litigation, which in turn led to global asset searches. The strong economic recovery that followed produced both friendly and contested M&A activity, as well as activist investing. The one constant at any point in an economic cycle, as we’ve learned, is the advantage of reliable, actionable information.

This month’s issue of Raising the Bar highlights the shift in our team’s activities over the past year as corporate contests supplanted global asset searching and created a different focus for our practice’s services. The work led to several key learnings as well as to the introduction of a new intelligence gathering tool for our team.

What The A&M Global Investigations and Intelligence Team is Seeing in the Marketplace

Hostile Takeovers and Activists—Sometimes in Tandem

No company is safe from an activist—no matter how small or large the company is or where in the world it is located. This year, we provided activist-defense intelligence to a target with revenues under $100 million and one with a market cap of over $100 billion. Our intelligence assisted in the successful defense of the year’s biggest hostile takeover. We also derailed a high profile serial activist by showing that his well-publicized charity benefited only his own family. Our investigative due diligence of proposed directors reached as far as Japan. In corporate contests, we saw an increased  use of an unsolicited offer combined with a proxy contest. Potential targets called on us earlier, often to investigate their own directors in order to anticipate issues which an activist would discover.

Tracking Hidden Assets

Banks in Greece and China, with large non-performing loans, often engage us to trace and locate assets, particularly in countries where the legal system will be supportive. As the head of one Greek bank said to me, “It’s not that the guarantor family can’t afford to pay—they choose not to.” This year, many attorneys, several trustees in bankruptcy and some litigation finance funds continued to ask us to investigate potential defendants to determine whether enough assets exist to justify bringing costly litigation.

Game-Changing Discoveries in Litigation

Litigation intelligence investigators unscramble facts, find potential witnesses and investigate adverse witnesses. All information is useful but the real prize is information which works as a “game-changer.” This year, the advantage shifted to our litigator clients when we uncovered through the course of our work that:

• A plaintiff appeared in several other cases, but her name was signed with distinctly different signatures
• The expert witness’ company, in one specific case, had historical ties to our adversary

Doing Business in a Disrupted World

What do Tanzania, Isle of Man and Tajikstan have in common? They are the latest additions to the list of countries in which we’ve conducted investigations. The list is now up to 68. As the political winds swirl and shift around China and Russia, western companies and financial institutions have been asking us:

• Is it “safe” to conduct a transaction in Russia—from both a business and personal risk standpoint?
• Can we be sure this Chinese company is not fraudulent?

A couple of decades back, we began receiving inquiries about India and China. Two years ago, it was Myanmar. This year, our offices in the U.S., Europe, India, Dubai and Hong Kong are increasingly being asked to conduct pre-transaction due diligence in Africa. In addition to the typical concerns about corruption and the integrity of a company and its principals and business partners, we’re supplying country risk reports, covering the quality of the infrastructure, the likelihood of political change and a description of the industry competition.

Steering Clear of Sanctions in International Transactions

We are being asked to check not only counterparty firms but also their principals, directors, business partners and sometimes customers, against a growing number of international “watch lists.”

Uncovering Hidden Information in the Internet

In all of the due diligence and litigation-related activities that clients need, crucial information may be hidden in the recesses of the Internet. Fraudsters may be colluding in the deep web. Unfaithful employees or vendors, short-sellers or activist investors may be colluding in the deep web or in blogs or within message boards that are not indexed. Powered by our artificial intelligence software, we introduced A&M Web Intelligence. Our monitoring efforts with use of this technology discovered:

• Chatter among former employees about a #MeToo issue at the company
• An activist in conversation with other shareholders

This past year demonstrated again that while “The More You Know” may be old hat as a TV commercial, it’s still key to success in the global marketplace.