How social media is used in litigation

Rebekah Smith, CFFA, CPA, CVA, Director of Financial Advisory Services, GBQ Consulting LLC

It’s often said that once something is posted to the Internet, it’s hard to get rid of it — no matter how many times you press the delete button. With the prevalence of social media in today’s society, this is something to consider. Once you post a picture on Facebook or tweet something in Twitter, it will stay there, in some form. And you never know how that personal information you posted online will come back to haunt you — especially in court.

“A great deal of valuable information about individuals and corporations can be determined from what people put on their social media sites such as Twitter, Facebook, LinkedIn and blogs,” says Rebekah Smith, CFFA, CPA, CVA, director of financial advisory services at GBQ Consulting LLC.

Smart Business spoke with Smith about the role social media plays in litigation and what you need to know about social media’s use in litigation.

What role does social media play in litigation, mainly in the financial realm?

People typically think about divorce cases where social media was used to uncover some type of personal behavior. While it is true that social media can be extremely helpful for attorneys in a divorce case as one method for proving certain actions of one party or the other, a forensic accountant can also use social media for financial purposes. For example, Facebook pictures or Tweets may be used as evidence of non-disclosed assets or a certain lifestyle. We have used social media in cases to determine if a debtor was hiding assets from a creditor, to obtain someone’s education, work history and current career direction, and frequently for research on a corporation or individual.

How has this changed over the last 10 years?

Dramatically! Ten years ago the only ‘social media’ was blogs, but unless you knew the name of a person’s blog, or it was easy to find, personal blogs were pretty hard to uncover. LinkedIn and Facebook did not even exist 10 years ago. LinkedIn popped up in 2003 and Facebook did not launch until 2004 and neither really gained major popularity until later. Twitter was the last to start in 2006. So 10 years ago, none of these resources were available to forensic accountants and attorneys when they were conducting their investigations. Now, it is standard protocol to see if the individual has a Facebook, Twitter, LinkedIn, or blog page where one can conduct some research.

How much, and to what extent, can your personal online footprint be used in litigation?

It partially depends on the type of litigation. In general, the more personal the litigation and the more personal information someone puts on their social media site(s), the more valuable it can be. For example, in a case regarding whether an individual was hiding assets from a creditor, social media was used to determine that the individual had a child who had recently purchased a very expensive piece of property in a different state. After running down that lead, it was determined that the property had been purchased with the funds from the individual under investigation, unveiling a common scheme of hiding  assets in relatives’ names.

We have also used Facebook as evidence of someone’s lifestyle when doing a lifestyle analysis in a fraud investigation. This involves looking at the lifestyle someone leads and comparing it to the known available monies (i.e. salary) to see if there is a gap in spending versus earnings, which could be an indicator of fraud.

What about your business’s online footprint?

In a fraud case, social media can be used to track down certain individuals and identify the parties related to the potential fraud. Sometimes, as part of researching a company and trying to understand what the company does, we will search social media sites. Many times in a shareholder dispute or a ‘business divorce’ people have motivation to either pump up the value of the business or depress it depending on whether they are the seller or buyer. Often times while scouring social media, you will find statements the company has issued which confirm or contradict self-serving statements made by the parties during litigation.

What are key things you need to understand about the use of social media in litigation?

It used to be that it was the exception to check social media sites as part of litigation, but it has become more and more routine. A recent article described the ways that social media was used, which even included jury research. If you think about people’s status updates on their Facebook pages, a lot can be gleaned about a potential juror’s political or social affiliations, which might make them more or less attractive jurors.

Jurors are Facebooking and Tweeting about juries they are on and judges are trying to monitor social media to make sure jurors aren’t disobeying their orders to not discuss a case. Recently in Florida, a man was kicked off a jury for ‘friending’ the plaintiff on Facebook. Unfortunately, the judge didn’t take too kindly to the fact that the juror allegedly posted his excitement about getting kicked off the jury and has now called for a hearing to determine if the actions rise to the level of contempt of court, which carries a potential fine and jail time.

Rebekah Smith, CFFA, CPA, CVA, is director of financial advisory services at GBQ Consulting LLC. Reach her at (614) 947-5300 or [email protected]

Insights Accounting & Consulting is brought to you by GBQ Partners LLC