Against Undue Credentialism
Ethical Investigator
by Philip Segal
2w ago
Is it in poor taste to argue against leaning too hard on credentials when you post something on LinkedIn, a platform where people showcase their credentials for all to see? I don’t think so. If you want a lawyer who will do a good job drafting a will, handling your divorce or making sure you’re signing a good employment contract, how important is it that she went to a top-five law school? You want someone who, on recommendation from someone you trust, will get the job done and won’t be a jerk to deal with. A law school transcript from 25 years ago won’t tell you how that lawyer deals with cli ..read more
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Who Is NOT a Good Referral for Our Firm? Lawbreakers!
Ethical Investigator
by Philip Segal
2M ago
I’m asked all the time when I meet other professionals, “Who’s a good referral for you?” I usually answer, “Litigators are good – if you want to see if it’s worth suing, or you want to look into the people on the other side, and we do trademark and copyright work too. And anyone thinking of making even a modest investment ought to know who it is will be taking their money.” All the work we do with cases studies is also on our website. But recently, someone asked me, “Who’s a referral that people would think would be good for you, but really isn’t good?” My answer was: “People who want me to br ..read more
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FTX Warnings vs Madoff Warnings: What was the Difference?
Ethical Investigator
by Philip Segal
2M ago
Investors in Madoff Securities and FTX were both warned, but by different sets of people. If it turns out to be true that without customer knowledge FTX took billions of dollar of customer account money to invest in a risky company owned by FTX’s CEO, this will truly compare to the Madoff scheme for audacious fraud (though smaller in dollar size). The major difference is that with Madoff, whistleblowers were trying to alert regulators that his stated returns didn’t make sense, not to mention his use of a tiny accounting firm and having no independent custodian for his funds. Regulators on Mad ..read more
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Good Due Diligence: Buy Back Your Future Mistake for 0.28 Percent
Ethical Investigator
by Philip Segal
5M ago
You want to invest $3 million into a real estate project. Time is tight because it’s closing in 12 days. The developer (51 years old) seems to have a decent track record and takes credit for billions of dollars of projects, but this project doesn’t yet have zoning approval and the previous owner dumped the property because his plans to develop it got tied up in court by angry neighbors. Scenario one: You find the developer has no criminal record and no bad press. Your lawyer looks over the contract and you send the developer your $3 million because the return looks attractive. Four years go ..read more
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When Too Few Regulatory Problems Add to Risk
Ethical Investigator
by Philip Segal
6M ago
One indispensable part of due diligence is to check for regulatory sanctions. Was a company found by the SEC or FINRA to have misappropriated investor money? Put them in unsuitable investments? Lied on a filing to induce people to invest money under false pretenses? While we never pronounce “Invest” or “Don’t Invest,” “Hire” or “Don’t Hire,” regulatory sanctions are something our clients can put into their personal mix that determines risk tolerance. But what about when you don’t find any regulatory problems? That too can flag a problem. And the bigger the prospective deal, the more the comple ..read more
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Keith Hernandez on Hitting and Why Investigators Should Take Note
Ethical Investigator
by Philip Segal
7M ago
When not at work, I like to do many things, and one of my favorites is to watch New York Mets baseball. Since moving to New York I’ve grown to love the team and I make common cause with the many Mets fans I run into (even in my Bronx neighborhood just a few stops from Yankee Stadium).[1] Keith Hernandez, 1986: Barry Colla Photography, Public domain, via Wikimedia Commons One benefit of watching the Mets is that our team has what many consider to be the finest broadcasters calling their games. The radio team led by Howie Rose is unmatched for its knowledge of the game and willingness to critici ..read more
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Beware of Optical Illusions in an Investigation
Ethical Investigator
by Philip Segal
8M ago
Many of us love optical illusions. It’s a safe thrill to know we’re being tricked, and yet are still unable to tell our brains to “get real” and stop the illusion. Bridget Riley, section of Blaze 4 (1964) When you’re doing an investigation, the same kind of thing can take over your brain: You want to look at facts in one way, but your brain won’t let you. That can lead you to the wrong conclusions. There’s a great explanation for the evolutionary reasons optical illusions work on us, at the American Museum of Natural History site. I wrote about illusions in my book, The Art of Fact Investigati ..read more
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Five Questions to Ask an Investigator Before Hiring
Ethical Investigator
by Philip Segal
10M ago
Where do you start in deciding which investigator to hire for a sensitive job? . It should be a business of trust, just as it is when choosing someone to come up with an estate plan, to sue a former business partner, or to handle a complex tax situation. Despite the seriousness of the question, some people just do the electronic equivalent of calling the person with the big ad in the Yellow Pages. But many of us ask for recommendations. What happens when nobody you know can recommend an investigator who not only delivers results, but does so in a way that doesn’t break the law or the rules of ..read more
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The Yale Med School Fraud: Where Were the Auditors?
Ethical Investigator
by Philip Segal
10M ago
Specializing in financial investigations as we do, I am always fascinated when new financial frauds come to light, and I always want to know how the person got caught. In the case of the recent Yale School of Medicine fraud in which an administrator took more than $40 million in fake computer purchases (desbribed in The Washington Post) the end came down to an anonymous tip. It should not have required a tip to catch this one. It needed someone who can do percentages. To do that going into an investigation, you need to make sure you know what sizes and distances you are talking about. A percen ..read more
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Angel Investor Due Diligence: The Key Trait You Want
Ethical Investigator
by Philip Segal
11M ago
I’ve done a lot of interviews about people over the years, but you can always get better. A fascinating conversation last week with an angel investor about what he looks for in a candidate to run a new company gave me a question I will always ask from now on, but not just about people running startups. The word for this investor is coachability and it’s a big thing when you have a person running a company for the first time. The idea for more experienced managers might be expressed as open-mindedness, but it all comes from the same place: Can a person in charge admit he doesn’t know everything ..read more
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