Investors, Turnaround Professionals, and Fraud:“First Do No Harm”

Abstract

Businesses in transition, whether from a sale, unusual growth, or a turnaround situation, may be at increased risk for fraud. Investors need to understand how to spot the red flags of fraud when they become involved with a new business. Additionally, it’s important to understand, as changes are made to the business, what new conditions can create a motivation or an opportunity for fraud. This article also addresses how to create a fraud prevention and detection system.

TOPICS: Private equity, manager selection, financial crises and financial market history, legal/regulatory/public policy