What does Due Diligence (DD) mean anyway?
Origin of the term “Due Diligence” The term “Due Diligence” first came into common use as a result of the US Securities Act of 1933. The US Securities Act included a defense referred to in the Act as the “Due Diligence” defense which could be used by Broker-Dealers when accused of inadequate disclosure to investors of material information with respect to the purchase of securities. So long as Broker-Dealers conducted a “Due Diligence” investigation into the company whose equity they were selling, and disclosed to the investor what they found, they would not be held liable for nondisclosure of information that failed to be uncovered in the process of that investigation. The entire Broker-Dealer community quickly institutionalized as a standard practice, the conducting of due diligence investigations of any stock offerings in which they involved themselves. Due diligence in capstone refers to performing the needful amount of effort, as in ‘doing diligence’ Originally the term was limited
