Insolvency and recovery proceedings are never without meticulous financial investigations and asset searches to ensure the best outcomes for stakeholders. While the internet has revolutionised information accessibility, it is still not typically used to its full advantage and Google is only the tip of the iceberg when it comes to financial investigations.
Effective asset identification and thorough due diligence often necessitates delving deeper into various public domain resources and specialised databases that extend far beyond conventional search engines. You can significantly increase recovery prospects by working with investigators and service providers to ingest and develop actionable insights from these tools.
The role of financial investigations in insolvency proceedings
With a primary objective of maximising returns to creditors, financial investigations are integral to the insolvency process and provide an informed assessment of the extent of debtors’ potential financial obligations. Financial investigations can help uncover hidden assets, trace financial transactions, and create a true financial picture of the debtor.
Beyond Google: resources for financial investigations
Googling can provide a vast amount of information, albeit information that can be unstructured and often insufficient for comprehensive investigations. While it is inarguably a useful starting point, as financial investigators, we use various resources and methodologies (complemented by tools that aggregate information from these sources) beyond Google to generate intelligence:
1. Public records and government databases
Public records and government databases are treasure troves of information, and this has only increased in recent years where more jurisdictions have adopted greater financial transparency protocols. Such databases include property records, corporate filings, court records, and regulatory filings. Examples of such typical go-to resources include:
- Local and national property registries: These registries provide details on real estate ownership, transactions, and liens, which are crucial for identifying physical assets.
- Corporate registries: High-level examples include UK Companies House, or the US’s SEC filings database, which contain invaluable information about corporate entities, including ownership structures, financial statements, and director details.
- Court records: These can reveal litigation history, judgments, and bankruptcy filings, offering insights into a debtor’s past.
While these are just a few examples, we have successfully utilised searches of these platforms to identify assets worldwide, including ‘hard to reach’ jurisdictions renowned for lacking financial transparency.
2. Specialised financial databases
Such databases can yield access to detailed financial data that is not readily available through generic search engines. Examples include:
- Investment and trade data services: These platforms offer comprehensive financial data which can include stock holdings, market analysis, and company financials.
- Legal, negative news and media research databases, which include detailed financial information and risk management insights, ownership structures and company hierarchies.
These tools assist with not only identifying key financial information but can help identify key business relationships and connections. At Quantuma, we have developed a proprietary suite of databases to complement our financial investigations. We have successfully used intelligence from these tools to pierce complex webs of related party transactions to demonstrate fraudulent asset transfers outside of group company structures, bringing these within reach of recovery prospects.
3. Social media, technology tools and online forums
Social media platforms, technology lookup tools and online forums can offer valuable insights into an individual’s or company’s assets and financial behaviour. LinkedIn, for instance, can reveal professional connections and affiliations, while platforms like Meta and X (formerly known as Twitter) may provide clues about lifestyle and spending habits. Even forums identifiable on messaging apps, such as Telegram, have been useful in identifying ‘whispers’ of information that have helped inform changes in recovery strategies.
Further, social media research and technology tools can also assist with identifying and tracing the whereabouts of individuals. Investigations that access this information and review geolocation markers have helped date and identify the locations of target litigation subjects. In our experience, this has been useful for serving legal notices and determining where freezing and forfeiture injunctions may need to be applied. We have also successfully identified email addresses and contact information from public sources, which have and can be used to attribute the target subject(s) to further assets and corporate interests.
4. Professional networks, industry associations and source inquiries
Networking within professional circles and industry associations can unearth information that is not publicly disclosed. These networks can often share insights on market trends, industry practices, and specific cases of financial distress.
We also consider deploying "source inquiries" which involve using human intelligence to gather information to assist with determining a target subject’s lifestyle, business interests, or even their professional conduct. This method is especially useful for corporate due diligence and when a target is keeping a low profile to avoid detection. Such inquiries can yield critical intelligence for case strategy. As an example, source inquiries on one matter revealed that a target suspected of misappropriating funds was genuinely living below average means, making them an unworthy and cost-ineffective target.
Techniques for effective use of public domain resources
The above-mentioned steps showcase how sophisticated a financial investigation or asset search exercise can become. To effectively manage the insights from these steps, and to generate intelligence promptly, we undertake several approaches and methodologies:
1. Cross-referencing data
Cross-referencing data from multiple sources can validate information and reveal discrepancies. For instance, comparing property records with corporate filings and social media posts can confirm ownership and uncover hidden assets.
2. Pattern recognition and data analytics
Utilising data analytics tools can help identify patterns and anomalies in financial data. Techniques like network analysis and forensic accounting can trace complex financial transactions and uncover strategies that have been used by fraudsters to obfuscate financial transactions and hide assets.
3. Legal tools and court orders
We frequently support the use of legal tools following the identification of intelligence from the public domain, including subpoenas, freezing injunctions and disclosure applications. This can stop defendants in their tracks from managing or moving assets they should no longer control and compel the disclosure of information from reluctant parties. Court orders, for example, can be used to obtain banking records, email or messaging app correspondence, and other critical documents necessary for undertaking thorough financial investigations.
4. Working with investigation, forensic accounting and legal experts
Collaboration among investigators, forensic accountants, and legal experts can enhance the efficiency of actioning the insights gained from investigations. There is a fine balance between interpreting complex financial data and legal nuances, and a coordinated team that shares information is essential (if not critical!) for increased recovery prospects.
Challenges and ethical considerations
The advantages of public domain research can be subject to challenge. No step is undertaken without regard to privacy laws and regulations to avoid illegal data acquisition. It is also notable that outdated or inaccurate information can lead to wasted time and resources. Therefore, investigators must critically evaluate data and undertake validation exercises to ensure the intelligence identified from investigations is accurate for the purpose for which it will be used – which can be both stop or go.
Conclusion
A robust approach to financial investigations, and leveraging information from the public domain, can yield significant amounts of intelligence and information for complementing insolvency and asset recovery proceedings. A rounded approach consists of research that is focused towards public records, specialised databases, social media, professional networks, and investigative services, ensuring that no relevant stone, which could be hiding significant assets, is left unturned.
Our investigative capabilities
Our global investigations team operates across borders, advising on a wide range of complex and special situations. Our teams are based in the UK, UAE, Cyprus, Cayman Islands, British Virgin Islands, Singapore, Hong Kong, and Mauritius.
The team utilises a broad range of techniques in asset recovery – not just investigative, or insolvency. We have vast experience and knowledge of corruption, money laundering issues, and financial crime techniques and can apply this knowledge to deliver positive outcomes for our clients.
Further guidance
Should you require further guidance, please contact:
Jamie Roberts
Associate Director
jamie.roberts@quantuma.com
