# kaal:claim:2811718-032

**Claim.** Expert testimony identifies recurring failures in private fund due diligence, including the absence of any written policy or process to ensure compliance and reliance on individuals with little or no experience, particularly with the particulars of hedge funds.

**Type.** failure  **Support.** evidenced

**Holds when.**

- expert reports in the surveyed litigation record

**Source quote.**

> Major failures or red flags in private fund IDD among private fund advisers include: (1) a lack of written policy or processes in place to ensure compliance;236 (2) the individual conducting the due diligence having little to no experience (especially on the particulars of hedge funds);

**From.** Wulf A. Kaal, *Private Fund Investor Due Diligence – Evidence from 1995 to 2015* (2016), III.B.4. Expert Testimony: Best Practices, page 56

**Cite as.** Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016). SSRN: https://ssrn.com/abstract=2811718

**Verify.** sha256 of source PDF `b52152af561288173840a1cabbcf8f4b337e73507c856ee01600799073f4156f` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202016%20-%20Private%20Fund%20Investor%20Due%20Diligence%20%E2%80%93%20Evidence%20from%201995%20to%202015.pdf

**Failure mode.** unwritten and inexpert diligence process  (family: investor-protection-gap)

**Topics.** compliance

**Keywords.** expert-testimony, red-flags, compliance-policy, due-diligence-failure

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