Private Investigators And Private Clients Series - Part One. The Introduction: Litigation, Divorce, And UWOs
PRIVATE INVESTIGATORS AND PRIVATE CLIENTS SERIES
LITIGATION, DIVORCE, AND UWOs
Multiple homes. International travel. Yachts. Private jets. Swiss bank accounts. Business deals done over dinner in the world’s finest restaurants.
No, this not my Christmas list. It is the kind of detail that has long-made commercial disputes between individuals on global rich lists as likely to be featured in the Daily Mail as they are in Law360.
Much of what goes on inside a courtroom is inside baseball; rendered externally incomprehensible by the language and rituals of our legal system. But, once each party starts to lift the lid on the other’s lifestyle, reputation, and property, the wider world is given an unprecedented and completely compelling glimpse behind the curtain.
At the outset of a dispute, ultra-high-net-worth (UHNW) litigants – or at least their legal teams – will weave intelligence gathering on a counterparty into their strategy; drilling down into reputation, sources of wealth, and professional conduct, or tracing assets ahead of applications for interim orders.
Having an enhanced understanding of your counterparty can reveal their vulnerabilities, or opportunities to settle. However, to enhance your position there is also huge value in understanding what your counterparty may reveal about you.
The reality is that what is said during a public hearing does not remain within the court room. Out from the Rolls building and into the tabloids, Twitter, blogs, a compliance database, a future asset trace. Once the lid is lifted and the tantalising details are out, it is very difficult to put information back in the box.
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2019 and 2020 have shone a light on circumstances outside of commercial litigation through which hugely personal – not solely commercial – information can enter the public domain, and on the impact that statements and reporting in the public domain can have on international UHNW individuals.
Events have demonstrated not only that their lifestyles (and profiles) are subject to more scrutiny than ever before, but that there is increased value in UHNWIs, and their advisors, having the greatest understanding of the principal’s profile and reputation – at home and abroad.
What am I referring to? Principally, the UHNW divorce and the Unexplained Wealth Order.
While both topics will form part of extended pieces in this series on Private Investigators and Private Clients, I address them here as the beginning to a discussion on weaponizing information and why understanding who you are, or are perceived to be, can be one of the best investments a UHNWI can make.
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INFORMATION OUT: THE DIVORCE
Acrimonious divorces can bring forth a raft of accusations and claims regarding an individual’s personal and professional conduct. As an investigator, in jurisdictions where these filings are publicly available, they are a treasure trove of detail and insights into a person: their businesses, conduct, personality, and psyche.
Choosing a jurisdiction where third parties cannot access filings, does not necessarily guarantee, however, that the ins and outs stay behind closed doors. Why? Past a certain threshold, the UHNW divorce has the fierce emotionality of a break-up but also the legal strategy of a multi-jurisdictional commercial litigation, and corresponding asset recovery.
This has been extremely evident in the Akhmedov divorce, which has captured tabloid headlines over 2019 and 2020. From the freezing of the yacht in Dubai, Tatiana Akhmedova’s disclosure order against her own son, and Farkhad Akhmedov’s claim that he would rather “burn” his fortune than pay £453 million to his former wife.
What begins life as a private, personal dispute, when the media interest kicks in becomes (and remains) publicly available information.
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FISHING IN THE PUBLIC DOMAIN: THE UWO
The advent of the UWO allows us to approach the same topic from a different angle.
The UWO requires the respondent to demonstrate the basis through which they acquired certain assets; the applying state agency need only demonstrate “reasonable grounds” that the respondent may not have legally acquired those assets in order to obtain an order.
Why does an individual’s public profile matter here? UWOs are a tool designed to be applied where interrogation of complex financial and asset structures cannot be undertaken by the applicant (a state agency or law enforcement body). What they can amass instead is a body of more easily accessible public information that provides the requisite reasonable grounds.
Although the outcomes of the UWOs against Zamira Hajiyeva and Nurali Aliyev had very different outcomes, there were underlying similarities as regards the public profiles of both individuals: high net-worth, politically-connected, London-based persons from Former Soviet States, both subject to allegations in their respective domestic media of illicit wealth and links to corruption.
Whether or not UWOs are correctly obtained, it is undeniable that the lifestyles of international UHNWIs are of perennial interest to state agencies, and the public more widely. In the UK, this increased scrutiny is now coupled with powerful legal tools that allow for the interrogation of the sources of funds entering the country. In the current environment anyone bringing funds and/or disputes into the UK should now be aware of their own profile and consider the wider potential implications of waging a reputation war against a counterparty.