Background

A global investment bank engaged Vcheck to investigate the legal and reputational risks of a rapidly expanding regional digital bank in South America prior to underwriting their IPO. As an underwriter, the investment bank needed assurance that the IPO would not be undermined by reputational or political risks and that all necessary litigation, legal risks, and regulatory issues were identified prior to filing the S-1.

Case Study

The investigation uncovered allegations tying the parent company to a powerful organized crime group operating in the region. According to multiple media sources, opposition lawmakers had also accused the group of facilitating corrupt deals with political leadership, including allegations of falsified documents and multi-million-dollar tax evasion, placing the group at the center of a political and criminal scandal.

Impact

Within just five business days, Vcheck’s international jurisdictional expertise and on-the-ground connections surfaced organized crime allegations and political exposure in a foreign market that posed material risk to the IPO. Armed with this intelligence, the client was able to move quickly and make a fully informed decision before underwriting the IPO.