What Steps Help Prevent Wire Fraud During an Investment Closing?

Prevent wire fraud by building a controlled closing sequence before funds are due and following it even when a deadline is close. A correct transfer depends on matching the payment to the signed deal documents, confirming the destination independently, and preserving evidence of each approval.

Set the Closing Sequence Early

Ask the manager or closing professional for the final funding notice and payment details through an established channel. Identify the legal entity receiving the funds and compare it with the subscription agreement or stock purchase agreement. Confirm the amount, currency, payment reference, and due date against the agreed closing terms. If the payee is an affiliate, administrator, or special purpose vehicle, ask why it is receiving the money and request documentation connecting it to the transaction.

Choose a contact and phone number from records you already trust. When instructions arrive, call that contact and read the details back. A phone number in a changed instruction is not an independent confirmation. Keep the confirmation method consistent for every closing so staff know what to do when a request looks different.

Separate Preparation, Review, and Release

Have one person prepare the wire and another compare the beneficiary and amount with the closing documents before authorizing release. Limit who can add beneficiaries or alter saved details in your banking system. Use available approval controls and alerts for unusual transfers. Keep a dated record of the comparison, the confirming contact, and the approving person.

Before closing, ask the manager:

• "What documents establish the correct receiving entity and amount?"
• "Who is authorized to issue payment instructions and announce a change?"
• "What number should we call to confirm the beneficiary independently?"
• "Who reviews and approves the payment on your side?"
• "How will you contact us if you suspect an email or account has been compromised?"

Ask your bank how quickly it can be contacted after a suspected misdirection and which transaction details it will need. Keep that contact information accessible to the staff handling the closing.

Handle Exceptions Without Pressure

A changed account, a request to skip a reviewer, secrecy, or pressure to send immediately should pause the payment. Contact the manager and closing professional using established details, then confirm the change through a separate channel. Do not rely on a reply to the same email thread. Keep the original and revised instructions so the change can be reviewed.

Once released, check the bank record against the approved instructions and closing file. If the payment appears misdirected or unauthorized, contact your bank at once and notify the appropriate closing professionals. Preserve the messages, call notes, and transaction record. Talk with your attorney or CPA if the closing record or payment structure raises legal or tax questions.

For additional context on manager payment controls, see the family office internal controls guide.

Checklist

• Obtain final instructions before the deadline.
• Match payee and amount to signed closing documents.
• Confirm by calling a known number.
• Require an independent second review before release.
• Pause every instruction change until confirmed separately.
• Save approvals and reconcile the bank record after transfer.

Read next: How can an investor test the security of a manager's payment instructions? and What controls should prevent unauthorized trades or transfers?

Financial controls are in place to prevent embezzlement, unauthorized investments, and style drift within an investment portfolio.

Sources: Family Office Club investor due diligence framework, How to Start a Family Office. Informational only, not financial, legal or tax advice.