Adverse Media Screening

Adverse media screening identifies negative news coverage about individuals or companies that may indicate reputational or compliance risks. This helps detect issues not captured by sanctions or PEP lists.

What is Adverse Media?

Adverse media (also called negative news or negative media) refers to publicly available information that suggests potential involvement in:

• Financial crime (fraud, embezzlement, money laundering)
• Corruption and bribery
• Criminal activity
• Regulatory violations
• Terrorism or extremism
• Human rights abuses
• Environmental crimes

Why Screen for Adverse Media?

Regulatory Expectations

• FATF Recommendation 10: Requires customer due diligence including risk assessment
• EU AMLD: Adverse media screening is an expected part of EDD
• FinCEN Guidance: Negative news is a risk indicator requiring investigation
• UK FCA: Firms should consider "adverse information" in risk assessments

Risk Indicators

Adverse media can reveal:

• Active criminal investigations
• Pending litigation
• Regulatory enforcement actions
• Patterns of suspicious behavior
• Association with bad actors

Screening Categories

TrustGate screens for adverse media across multiple risk categories:

Financial Crime

Category	Examples
Money laundering	AML violations, structuring, layering
Fraud	Securities fraud, wire fraud, bank fraud
Embezzlement	Misappropriation, theft from employer
Tax evasion	Tax fraud, offshore schemes
Insider trading	Securities violations
Ponzi schemes	Investment fraud

Corruption

Category	Examples
Bribery	Public official bribery, commercial bribery
Kickbacks	Contract manipulation
Procurement fraud	Government contract fraud
Political corruption	Election fraud, abuse of power

Criminal Activity

Category	Examples
Organized crime	Mafia, cartel connections
Drug trafficking	Narcotics production/distribution
Human trafficking	Smuggling, forced labor
Cybercrime	Hacking, ransomware
Terrorism	Terrorism financing, extremism
Violent crime	Murder, assault, kidnapping

Regulatory & Legal

Category	Examples
Regulatory sanctions	Fines, license revocations
Civil litigation	Fraud lawsuits, class actions
Bankruptcy	Personal/corporate insolvency
Asset seizure	Forfeiture, freezing orders

How Adverse Media Screening Works

Screening Process

1. Name and identifying data submitted
           ↓
2. Search across news sources:
   - Major news outlets
   - Local/regional media
   - Government releases
   - Court records
   - Regulatory announcements
           ↓
3. AI analyzes content for:
   - Relevance to search subject
   - Risk category classification
   - Severity assessment
           ↓
4. Matches returned with:
   - Article excerpts
   - Source publication
   - Publication date
   - Risk categories
           ↓
5. Hits reviewed by compliance team

Running Adverse Media Screen

curl -X POST https://api.bytrustgate.com/v1/screening/check \
  -H "Authorization: Bearer YOUR_API_KEY" \
  -H "Content-Type: application/json" \
  -d '{
    "applicant_id": "550e8400-e29b-41d4-a716-446655440000",
    "check_types": ["adverse_media"]
  }'

Adverse Media Hit Response

{
  "id": "check_123456",
  "status": "hit",
  "hit_count": 2,
  "hits": [
    {
      "id": "hit_789012",
      "hit_type": "adverse_media",
      "matched_name": "John Smith",
      "confidence": 82.5,
      "categories": ["fraud", "financial_crime"],
      "article_title": "Local businessman charged in investment fraud scheme",
      "article_url": "https://example-news.com/article/123",
      "article_source": "Example News Daily",
      "article_date": "2024-08-15",
      "article_excerpt": "John Smith, 45, of San Francisco was charged today with wire fraud in connection with an alleged investment scheme...",
      "severity": "high",
      "resolution_status": "pending"
    },
    {
      "id": "hit_789013",
      "hit_type": "adverse_media",
      "matched_name": "John M. Smith",
      "confidence": 68.3,
      "categories": ["regulatory_action"],
      "article_title": "SEC fines broker for disclosure violations",
      "article_url": "https://sec.gov/news/2024/release-123",
      "article_source": "SEC Press Release",
      "article_date": "2024-03-22",
      "article_excerpt": "The Securities and Exchange Commission today announced that John M. Smith has agreed to pay...",
      "severity": "medium",
      "resolution_status": "pending"
    }
  ]
}

Handling Adverse Media Hits

Verification Steps

1. Confirm identity match

   • Is this the same person/company?
   • Check distinguishing details (age, location, middle name)

2. Assess source credibility

   • Reputable news outlet vs. tabloid/blog
   • Official source (court, regulator) vs. allegation

3. Evaluate severity

   • Criminal conviction vs. mere allegation
   • Amount involved
   • Recency of events

4. Consider context

   • Was the person accused or convicted?
   • Were charges dropped?
   • Is there a pattern?

Severity Levels

Level	Criteria	Action
Critical	Terrorism, sanctions evasion, major fraud convictions	Likely reject
High	Criminal charges, significant regulatory action	Enhanced review
Medium	Civil litigation, minor violations	Document and monitor
Low	Old news, allegations dismissed	Note and proceed

Documenting Decisions

# Example: Document adverse media review
response = requests.patch(
    f"{BASE_URL}/screening/hits/{hit_id}",
    headers={"Authorization": f"Bearer {API_KEY}"},
    json={
        "resolution": "confirmed_false",
        "notes": """
        False positive - different person with same name.
        Applicant: John Smith, DOB 1985-03-15, San Francisco
        Article subject: John Smith, age 62, New York
        No connection between individuals.
        Verified via additional documentation.
        """,
    },
)

Data Sources

TrustGate aggregates adverse media from multiple sources:

News Sources

Source Type	Coverage
Major wire services	AP, Reuters, AFP
National newspapers	NYT, WSJ, Guardian, FT
Regional media	Local newspapers, TV stations
Business news	Bloomberg, CNBC, Forbes
Industry publications	Trade journals, sector news

Official Sources

Source Type	Coverage
Court records	US federal/state courts, UK courts
Regulatory announcements	SEC, FCA, FINRA, OCC
Government press releases	DOJ, Treasury, FBI
Enforcement databases	FINRA BrokerCheck, SEC EDGAR

International Coverage

Region	Languages
North America	English, Spanish, French
Europe	English, German, French, Spanish, Italian
Asia-Pacific	English, Chinese, Japanese
Middle East	English, Arabic
Latin America	Spanish, Portuguese

Best Practices

Screening Frequency

Customer Risk	Initial	Ongoing
Low risk	At onboarding	Annual
Medium risk	At onboarding	Semi-annual
High risk	At onboarding	Quarterly or continuous
PEPs	At onboarding	Continuous monitoring

False Positive Management

Common causes of false positives:

• Common names (John Smith, Maria Garcia)
• Similar names (John Smith vs. John Smythe)
• Name collisions (multiple people with same name)
• Outdated information

Mitigation strategies:

• Use additional identifiers (DOB, location, company)
• Cross-reference with other data points
• Document reasoning for dismissals
• Build institutional knowledge

Staying Current

Adverse media changes over time:

• New articles published
• Cases resolved
• Charges dropped
• Convictions overturned

Implement ongoing monitoring for existing customers.

Configuration Options

Category Filters

Screen for specific categories only:

curl -X POST https://api.bytrustgate.com/v1/screening/check \
  -H "Authorization: Bearer YOUR_API_KEY" \
  -H "Content-Type: application/json" \
  -d '{
    "applicant_id": "550e8400-e29b-41d4-a716-446655440000",
    "check_types": ["adverse_media"],
    "adverse_media_categories": ["financial_crime", "fraud", "corruption"]
  }'

Date Range

Limit to recent news:

curl -X POST https://api.bytrustgate.com/v1/screening/check \
  -H "Authorization: Bearer YOUR_API_KEY" \
  -H "Content-Type: application/json" \
  -d '{
    "applicant_id": "550e8400-e29b-41d4-a716-446655440000",
    "check_types": ["adverse_media"],
    "adverse_media_max_age_years": 5
  }'

Severity Threshold

Only return high-severity hits:

curl -X POST https://api.bytrustgate.com/v1/screening/check \
  -H "Authorization: Bearer YOUR_API_KEY" \
  -H "Content-Type: application/json" \
  -d '{
    "applicant_id": "550e8400-e29b-41d4-a716-446655440000",
    "check_types": ["adverse_media"],
    "adverse_media_min_severity": "medium"
  }'

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Next Steps

• Sanctions Screening - Sanctions list screening
• PEP Screening - Politically exposed persons
• Hit Resolution - Resolving screening matches
• Ongoing Monitoring - Continuous screening