Unless you are setting the bar for due diligence imposisbly high, I can't see where you have a valid point here. Not only would you have to hire research firms to internet-search everyone (and if you are using that search to protect yourself from negligent hiring actions you would have to document that you did, and retain the records...begging for the very lawsuits in the topic-starter) but you would then be required to directly fact-check all of the information you gleaned. Is anyone here really saying they take what they see on MySpace or any other social networking site at face value? The answer, I assume, is an overwhelming "no", leaving you no alternative, in your scenario, to formally investigate anything you saw there.
Best advice is, don't do candidate research in venues where there is no possible way to discern if what you are looking at is the truth or an invention.
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