ISSUER DUE DILIGENCE— RELYING ON EXPERTS & THIRD PARTY INFORMATION
Presented to the California Debt & Investment Advisory Commission 6th Annual Pre-Conference
September 10, 2007
By Robert W. Doty AGFS Sacramento
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RELYING ON EXPERTS
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CONTRACTS WITH ISSUERS
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ISSUERS CAN RECEIVE REIMBURSEMENT FROM PRIVATE PARTIES, IF APPROPRIATE
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GOAL IS ACCURATE REPORT NOT A PARTICULAR CONCLUSION
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LOWEST BIDDERS NOT NECESSARILY BEST
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EMPHASIZE EXPERIENCE, TRAINING, CREDENTIALS, RECORD
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IN OFFICIAL STATEMENT, DISCLOSE RELIANCE TO INVESTORS
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CLEARLY IDENTIFY EXPERT INFORMATION & EXPERT’S CONSENT TO RELIANCE
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CERTAIN FORMULATIONS STRENGTHEN RELIANCE
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FORM OF EXPERT CERTIFICATION
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CERTIFICATION DESIGNED TO RECEIVE IMPORTANT REPRESENTATIONS
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CERTIFICATION & PROCESS ALSO EMPHASIZE SERIOUSNESS TO EXPERT
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WRITTEN CONSENT TO USE OF REPORT
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WRITTEN CONSENT TO RELIANCE
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EXPERT REPRESENTS INDEPENDENCE
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EXPERT REPRESENTS EXPERTISE
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CLEAR IDENTIFICATION OF ALL ASSUMPTIONS & REPRESENTATION AS TO REASONABLENESS
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WITHOUT REASONABLE ASSUMPTIONS CONCLUSIONS ARE SUBJECT TO QUESTION
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EXPERT REPRESENTS CONFORMANCE TO PUBLISHED INDUSTRY STANDARDS
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OR, IF NONE, ALTERNATIVELY, SOUND INDUSTRY PRACTICES
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EXPERT REPRESENTS DILIGENCE IN PREPARATION OF REPORT
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EXPERT REPRESENTS ACCESS TO ALL NECESSARY INFORMATION
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EXPERT REVIEWS OFFICIAL STATEMENT INFORMATION
REPRESENTS THAT OS IS ACCURATE, COMPLETE, FAIR AS TO EXPERT & REPORT
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IN OSs, CLEARLY IDENTIFY THIRD PARTY SOURCES OF INFORMATION (e.g., Census, State Agencies, Real Estate Boards)
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SIGNIFICANT THIRD PARTY INFORMATION USED IN OFFICIAL STATEMENTS WHEN PRIVATE PARTIES ARE KEY TO TRANSACTIONS
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THIRD PARTIES, NOT ISSUERS, SHOULD APPROVE, SIGN, CERTIFY INFORMATION
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STILL, ISSUERS SHOULD NOT USE INFORMATION FROM SOURCES ISSUERS DO NOT CONSIDER RELIABLE OR INFORMATION ISSUERS KNOW IS FAULTY
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THIRD PARTY INFORMATION SHOULD BE CLEARLY IDENTIFIED
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BEST WHEN SEPARATED (SECTIONS, APPENDICES, ETC. FACILITATING SIGNATURES)
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EXPLICIT CERTIFICATIONS BY THIRD PARTIES AS TO APPROVAL, ACCURACY, COMPLETENESS, ETC. OF THEIR INFORMATION IN OSs
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THE END
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