Ted Banks on Due Diligence in an Acquisition [Podcast]

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By Adam Turteltaub
adam.turteltaub@corporatecompliance.org

During the typical due diligence period for an acquisition, the accountants are all over every financial risk, but compliance-related risks are very real and potentially just as expensive.  If compliance isn’t involved it could be very expensive.

Ted Banks, a compliance-profession veteran and partner at Scharf, Banks Marmor argues persuasively in this podcast that compliance has to have a seat at the table and dive right in.

Once involved, the compliance team has to realize that it can’t rely on off the shelf analysis.  You need to map to the current risks in the marketplace.  Also, you need to be wary of your business partners.  Someone pushing to close the deal too quickly may be hoping a risk stays hidden or just be unaware of potential risk areas.

When examining the company being acquired, look at its history of litigation and regulatory issues.  Also, take the time to understand whether their method of doing business has been or may be altered by changes in laws, regulations and even public sentiments.

Be sure to also examine their social media presence.  Are they careful in their communications?  Are their followers real or purchased?

And, of course, bring in experts to assess their products and services to help sure you understand the risks in them.

Listen in to learn more about how to make your due diligence process more effective and better able to mitigate the inherent risks.