Some of the more severe subsequent criticism has emanated from the US. Aim followers will recall the remarks this year of John Thain, chief executive of the New York Stock Exchange, who described the junior market as having no standards at all. Roel Campos of the Securities and Exchange Commission then likened Aim to a casino.

Then Wilbur Ross, the billionaire US investor, warned that Aim was dangerous for investors because of its lower corporate governance standards. It was in danger of “attracting the wrong kinds of people”.

Weary of the carping, the London Stock Exchange refused to dignify Mr Ross’s comments with any kind of response. So the Aim team will relish the irony that two out of nine individuals discovered by a business intelligence agency to be unfit to be directors of potential Aim companies hailed from the US.

When this column last year profiled Diligence – the agency in question – the problems of due diligence for nomads were expected to centre on areas such as the remote former Soviet republics or central China. The prediction that nomads would turn increasingly to agencies such as Diligence has proved correct – but in unexpected areas.

So far Diligence has been asked to review 59 prospective directors on behalf of 31 projects under consideration by 13 nomads. In addition to the two US rejects, the nine considered unfit for office comprise two from South Africa, two from India, one South American, one Australian and one from the UK.

Russell Corn, the former major in the Special Boat Service who heads the European division of Dilgence, describes the presence in the list of the US and UK nationals as “somewhat counter-intuitive”.

He also says that – allowing for the fact that investigations are usually prompted by nervousness – the fact that 15 per cent of the agency’s enquiries reveal serious issues underlines the heavy responsibility carried by nomads.

Of the 31 projects reviewed by the agency, 25 are in the resources and renewable energy sectors. The 31 were also spread across 11 regions, with six each from former Soviet republics and India, and four from Africa – but only three from the UK.

This is by no means an exhaustive sample but it reflects areas of worry for the nomads, who have to meet the standards laid down in Aim’s first rule book, which came into force in February.

The work done by Diligence for potential Aim companies is already up threefold on last year, suggesting that some nomads reckon it well worth while to have a paper trail back to an independent third party in case things go wrong with one of their flotations.

A victory for the rule book

Other statistics – courtesy of Growth Company Investor – suggest that the introduction of the rule book has already started to improve the quality of companies joining Aim.

At the end of 2005 this column took a look at the performance of the companies that raised money in the first quarter of that year. More than half of them were found to be trading below their flotation price at the end of December.

Throughout 2006 there were 282 new issues on Aim. By the end of that year exactly half the companies involved had shares below the flotation price.

But by then the LSE was making a lot of noise about the plans for the rule book. In the first quarter 43 companies joined Aim and by the end of June only 10 were trading below their issue price.

In other words more than 75 per cent of the new companies have moved in the right direction for investors: an impressive improvement so early in the day.

Carry on advising

Bandwagons are dangerous once the wheels start falling off. But some people survive the crash better than others.

Compass Finance made a mess of its original business as a broker offering loans and mortgages to the estimated 9m people who have trouble gaining credit.

So it threw itself into the booming personal insolvency sector just as the banks started putting the squeeze on individual voluntary arrangements (IVAs), under which a lender agrees to write off part of an individual’s debts in return for repayments over a set period.

Beverley Budsworth, an insolvency practitioner, sold The Debt Advisor and The Business Debt Advisor to Compass for £1m in cash and £1m in shares just over a year ago.

Investors must have thought that Compass knew what it was doing. After all the chairman was Gren Folwell, former finance director and deputy chief executive of Halifax, and a former chairman of Debt Free Direct, the market leader in the IVA sector.

However, Compass, which changed its name to Debt Advisor, called in PwC as administrators at the beginning of this month. On Friday PwC agreed to sell the insolvency division to a company part-controlled by Ms Budsworth for £750,000 cash.

Ms Budworth has suffered along with other shareholders from the collapse of Compass. But in simple terms she has got her business back and pocketed £250,000. And future clients can be reassured that she has a good deal of practical experience.

david.blackwell@ft.com

Copyright The Financial Times Limited 2007