For private investigators who specialize in hedge funds, these are good times, reports Bloomberg. The Bernard Madoff and other scandals have upped the ante when it comes to due diligence. Investors can no longer rely on cursory methods. They need to drill deeper than ever, as the fraudsters, epitomized by Madoff, have taken their dark art to whole new levels of ingenuity.

PI firms are reporting an increase in business from investors who want a background check. The article notes that S4 Capital hired a PI firm to look into a hedge fund that, as it turned out, didn't reconcile trades daily as the manager had claimed, reported inconsistent asset values and used an auditor related to its founder. The fund subsequently shut down. Background checks are surprisingly cheap. They cost only $1,000 for each individual or firm. Results are back within weeks. 

For more:
- here's the Bloomberg article

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