In "How Widespread and Predictable is Stock Broker Misconduct?" SLCG researchers found that while individual broker past customer complaints can help identify whether a broker is likely to be subject to future complaints. McCann, Qin and Yan found that including co-worker complaint histories significantly increased the ability to predict complaints against brokers with no prior complaints. They also found that customer complaints which were denied - not just settlements and awards - are useful for predicting future investor harm.

Egan, Matvos, and Seru's research underscores that, rather than eliminating underperforming brokers from the industry, the regulatory environment and labor market tend to funnel these brokers towards firms that hire individuals with disproportionately high numbers of customer complaints. These firms typically maintain loose hiring criteria and exhibit lenient compliance standards, specializing in exploiting inexperienced investors.

In their related study, Dimmock et al. [2016] establish that financial fraud spreads contagiously. They find that a broker's inclination to commit financial fraud is significantly shaped by the tendency of their coworkers to engage in fraudulent activities, even when accounting for firm culture, branch dynamics, market conditions, and state regulatory frameworks.

Jeffrey K Fishmans current employer, is one of the 30 highest risk brokerage firms measured by the percent of brokers at the firm who have customer complaints disclosed on their BrokerCheck reports. 14.76% of 's brokers have customer complaints compared to only 2.71% of all brokers who have complaints.

If you have questions about this post, about and/or Jeffrey K Fishman or about the management of your accounts, please contact SLCG for an initial consultation or email us at BrokerInquiry@SLCG.com.

SLCG Economic Consulting, LLC

For almost a quarter of a century, SLCG Economic Consulting, LLC ("SLCG") has been delivering consulting services to individuals, businesses, and both state and federal agencies, primarily focusing on finance and economics. The team at SLCG comprises experts with extensive academic and governmental backgrounds who actively engage in research that is often suitable for publication.

SLCG is a wholly owned subsidiary of McCann Yan Holdings, Inc., a Virginia incorporated company based in Northern Virginia.