Large investors are hiring private investigators to examine hedge funds to avoid fraudulent or bad investments, according to the New York Times. With more and more hedge fund scandals and collapses, the business is in demand. Private investigator Randy Shain runs the investigative unit at First Advantage. The group consists of 50 investigators dressed causally who work out of a cubicle-less office in the Flatiron district in Manhattan. The investigations are costly and a report can run $2,500 to $50,000, depending on the depth, Shain said.
The group--which has examined more than 3,000 funds and 4,500 hedge funds--looks at court filings and news clippings, checks criminal records and interviews former business associates. They can provide a comprehensive report on an individual in about five weeks.