The ever increasing availability of ‘online data’ provides investors, big and small, with a tremendous new opportunity to enhance their due diligence capabilities. To demonstrate, MediaBadger undertook an analysis of indicators of fraudulent activities discovered through citizen comments in social media channels around a investment fraud case in the Alberta’s courts in 2012. Our objective was to see if there were warning signs before the case became public.
Prompting tougher questions from investors, that might have helped them avoid the deal entirely;
Raising warning signs after investments were made that steps had to be taken quickly to prevent the loss of all or some of their investment;
Extending regulators’ reach into cyberspace for information to deepen due diligence research; and,
Enabling investigators’ to conduct more efficient and comprehensive investigations across borders and time.
This is one of a few cases we have documented where warning signs were present in open Web sources. Securities watchdogs, commercial crime investigators, even consumers and financial firms, have a new resource available to them through public data online; this ranges from social media to news media. An advantage of social media today is that people are speaking their minds and sometimes revealing golden bits of information that when understood, by placing them into context, can lead to critical insights that can save consumers and governments millions and reduce instances of fraud. Keeping in mind this is all publicly available information – people who make public statements online that are visible to anyone. They are not statements made in private channels.