The Future of Fraud: Looking Back at 2024’s Biggest Trends

Welcome to the December 2024 edition of our newsletter!  In this issue, we’ll examine the year that was in fraud and look ahead to trends percolating for 2025.

Looking Back to See the Road Ahead: 2024 Year in Review

This past year has been a tumultuous one in many ways, as the exponential boom in the use of artificial intelligence has shaken the way many industries operate.  Coupled with the increasing reliance of millions on social media for news, information and interaction, a new era of fraud can be said to be upon us.

For individuals, the nexus of artificial intelligence, social media and criminals only grew stronger, as organized crime elements amped up “pig butchering” scams meant to drain a target of his assets as part of a faux romance scam (often using another recent creation, cryptocurrency, to make tracing payment much more difficult.)  Introducing artificial intelligence into these and similar scams – where “deepfake” photos and videos, or “voice cloned” audio, can be used – only heightens the risk and the inability to detect it.

On the corporate side, while some efforts were made to use this technology to impersonate executives, for now the broader risks lie in more traditional fraud, with several high-level executives, and public officials, having inflated or created expertise on their resumes while seeking public office or the trust of a corporate boardroom.  Vigilance will never be obsolete, especially as new means of evading it are evolving every day.

In terms of what lies ahead for 2025, most observers think the change in U.S. presidential administrations will increase deal-making activity, as a lighter regulatory hand comes into focus.  This should create greater opportunities for partnerships and consolidations, but also carries risks that require pre-transaction due diligence.  Is there anything in the background of relevant principals that could be a cause for concern?  Anything about a target company’s reputation and operations which could be under the radar of the mainstream financial press?  Looking at litigation and regulatory filings, as well as traditional and social media, can help your clients take advantage of a re-energized acquisition landscape while also assessing the potential downsides to any deal.