Industry Insights

How Financial Due Diligence Searches Can Prevent Million Dollar Mistakes

Background investigations are common among most employers when protecting their company but aren’t always customized to meet industry specifics. Depending on the industry, such as the financial industry, background checks should be customized to include more in-depth searches, such as a financial due diligence search.  

When background screening requirements aren’t met by employers, they face great risks, fines, and fees that could jeopardize their company. For example, in July of 2019, the Financial Industry Regulatory Authority (FINRA) announced that they had fined one of the largest banks in North America $1.25 million after it was found that their lack of adequate background checks allowed them to hire three convicted criminals. Due to years of poor practices, these individuals were hired without an adequate, industry-specific background investigation, which, if performed in the first place, would have disqualified those applicants immediately.

Mistakes like these are not only costly but can be detrimental to the company’s reputation as a whole. Companies spend years building and perfecting a reputation that accurately depicts their honesty, dependability, and trustworthiness to customers, and if not careful, this could be demolished over a single mistake. To avoid such risks, employers need to prioritize creating a sound background check policy that includes industry-specific procedures and products, as well as following the laws.

What Are Financial Due Diligence Searches?

A financial due diligence search is a more in-depth method of performing background investigations that are performed in the courthouse using a network of on-the-ground investigators to obtain information through direct, in-person reviews of primary source documents. Some background investigations only rely on database sources to retrieve an individual’s information, but a financial due diligence search utilizes a dedicated research team from start to finish.

When completed, a financial due diligence search report will come in an easy-to-read format with detailed findings and supporting documentation.

Why Are They Important?

It’s the employer’s duty to ensure a safe working environment, which is why a thorough background check that meets both industry standards, as well as federal laws, is vital.

“When a company fails to pay attention to detail when building and implementing their background screening policies, it affects not only the safety and integrity of the company and its employees, but their reputation moving forward as well. Time, money, and effort can be considered well spent when creating a background policy that encompasses laws, compliance requirements, and industry-specific products that are customized to meet your business needs.” – Frank Bernard, VP of Compliance at DISA Global Solutions 

How DISA Can Help

DISA’s suite of financial investigative services (FIS) provide financial due diligence services for your company’s needs. Our basic in-courthouse research includes:

  • Corporate Records and Affiliations Research
  • Bankruptcy Filings
  • Federal and Civil Litigation
  • Judgment Filings
  • State & Federal Tax Liens
  • Criminal Records

For an even more extensive search, all of the above are included as well as the following:

  • Media Research
  • Regulatory Sanctions
  • Verification of Employment and Education
  • Verification of Professional Licensing and other Credentials
  • Regulatory Licensing Status through the SEC, FINRA, NFA, State Securities Boards, and Additional Agencies
  • Inquiries Related to the Character, Reputation, and Integrity of the Subject 

Our background compliance team has experts who can assist you with creating and implementing a policy that will fulfill your industry needs to better protect your company and employees.

Important Links:

Are you an employer and still have questions
regarding background checks or employment screening?

DISA can help! Get answers directly from DISA’s subject matter experts with ‘Ask DISA’.

Visit www.askdisa.com to ask your questions today!

Founded in 1987, DISA is the industry-leading provider of employee screening and compliance services. Headquartered in Houston, with more than 30 offices throughout the U.S. and Canada, DISA’s comprehensive scope of services includes drug and alcohol testing, background screening, occupational health, and transportation compliance. DISA assists employers in making informed staffing decisions while building a culture of safety in their workplace.