Matthew Greene

By Matthew B. Greene, JD

Copyright 2002, 2009 STILAS International Law Services, P.A.

All International Rights Reserved.

Matthew Greene is the founder of STILAS, originally a government contractor for international economic security. Matthew Greene is a former Chief of Special Operations in anti-organized crime and anti-corruption, and is an international legal expert and career strategic advisor to governments, agencies and ministries in various countries.

This article is a brief extract from one of a series of expert reports developed by Matthew Greene and STILAS, in cooperation with certain federal law enforcement and national security agencies of multiple countries, for protection of national critical infrastructure in the private sector.

Common Mistakes and Misunderstandings

Professional due diligence investigations require careful analysis, logical interpretation and many educated "judgment calls" in order to make a responsible and reliable conclusion. Such analysis must be based upon investigative experience and security expertise, as well as knowledge of legal issues that allow the investigators to make reasoned conclusions. Presented here are some of the most common guidelines that experienced investigators and intelligence analysts use to avoid common mistakes.

Do Not Impose Unrealistic or Irrelevant Standards

Remember that the only legitimate goal of Due Diligence is to make reasonable efforts to verify that the company says what it does and does what it says. Do not allow the valid process of Due Diligence to degenerate into a "witch hunt". Too often it is abused as a "game" of imposing irrelevant standards, or aggressively attempting to "verify" misunderstandings of "claims" that were never made by the company. As a result, the company is often subjected to harsh criticism and even unlawful defamation, for which it can file a winning lawsuit. Remain focused on verification of specific claims and statements that are actually made directly by the company you are checking, and objective assessment of reasonable indicators of its ability to perform the work expected of it.

Respect Legitimate Confidentiality

The need or desire to conduct Due Diligence is neither an excuse nor a lawful basis for requiring a company to disclose proprietary information, trade secrets, intellectual property, privileged attorney work product or confidential lawyer-client relations, nor confidential financial information, all of which are legitimately protected by federal and international laws. It is necessary to respect that many commercial relations customarily require companies to sign confidentiality, non-disclosure or non-circumvent contracts, to protect their legitimate legal rights and lawful interests. Do not rush to false conclusions of "fraud" merely because a company refers to lawful and legitimate rights or obligations of confidentiality. Look for other non-confidential information reasonably related to demonstrating capabilities to perform.

Consider Facts and Data Only in Context

Avoid taking abstract facts out of context, or giving excessive weight to immaterial factors. These mistakes are most often made in relation to offices and addresses of the subject company, but apply to many other areas as well. Many legitimate and successful companies maintain additional offices for senior management, different departments or divisions. Therefore, if your research discovers an alternate address different from the one on the brochure or business card, do not assume that this is a "fraud flag". Focus on verification of representations made by the company itself. Due Diligence is not for creating a superficial contest of who has the most prestigious offices or addresses.

"Not Found" Does NOT Mean "Doesn't Exist"

If certain information or data does not appear in certain databases, or you could not find it, or one of many possible sources says there is no record of it, never, ever, say that it "does not exist". This is perhaps the single most common and most damaging mistake, made frequently by amateurs. This false conclusion violates both logic as well as common sense, based upon the erroneous assumption that the investigator or a particular database is somehow "all powerful".

Another cause of this misunderstanding is a lack of awareness that not everything is "public record". For every disclosure law there is also a privacy law. For these and many other similar reasons, professional experienced investigators who can not find something will strictly and ethically maintain the only logically correct conclusion that "no record was found", "there is no record of the document", or sometimes that its existence "could not be verified". They will never say that something "does not exist". Be suspicious of apparently all-knowing claims by an investigator that something "does not exist", as that misrepresentation is often more fraudulent and damaging than any fraud you are trying to detect through your Due Diligence efforts.

If you are not able to verify a fact or document, the proper course of action is to ask the subject company to assist you in its verification, by providing a high quality color copy that can be inspected for authenticity. Any legitimate company will have a vested interest in, and be highly concerned about, ensuring that its credentials or documents are verifiable. This approach allows you as a potential partner to provide value to the company in a supportive role, and also affords you an opportunity for in-depth disclosure in a non-confrontational context.

Always Evaluate the Credibility of Sources

Credibility of sources involves much more than the truthfulness of information provided. Consider how much effort the source likely puts into collecting data, whether or not it verifies the data, whether or not it has direct knowledge of the information you are requesting, and many other factors. When conducting Open Source research, give priority to directory services or listings of membership organizations that have the opportunity and possibly the obligation to verify the truth of data or statements made in its data bases or published listings.

Always consider whether the source is a potential competitor of the company you are researching. Do not ask another company engaged in similar business whether they have heard of that company and their opinion of it, especially if there is any reason to perceive the company as a potential competitor. The resulting response cannot be credible.

Do not give undue credibility to business disputes, complaints or accusations that may be found in a media search such as on Internet forums. "Disputes", by definition, have two sides with different facts and different interpretations of the same facts. Anonymous claims should never be considered. Unless a person quoted in an article is named and can be located, or a web posting identifies the writer or has a link to contact information of that person, any statements made should not be given credibility. To obtain the real truth, give the company you are evaluating the opportunity to disprove any statements that raise potential concerns. This is courteous, professional, and much more effective to make an informed factual conclusion.

Matthew Greene and STILAS avoid accepting any business from the general public. Consultation is generally provided only to government agencies and banking institutions. Provision of services to the private sector may be considered only upon introduction through trusted partners or colleagues of Matthew Greene and STILAS.