Underwriters

Underwriters are the companies that investors rely on to dig deep into a new company or new security offering to find the smoking guns, before the new securities are sold. Their investigation, or due diligence, requires that the underwriters examine financial statements for instances of inter-company transfers, excessive or unexplained payments to officers or other things that just “don’t add up.” When underwriters neglect their obligation to investigate or purposely turn a blind eye when they see these “red flags,” yet continue to sell these securities, they can be liable to you.