Research into "How Widespread and Predictable is Stock Broker Misconduct?" by SLCG indicates that prior customer complaints against individual brokers can indicate future complaints. McCann, Qin, and Yan discovered that including co-worker complaint histories significantly improves the ability to predict complaints against brokers who have not been previously complained about. They also found that customer complaints that were denied - not only settlements and awards - are useful in predicting future investor harm.

Egan, Matvos and Seru's results confirm that, rather than weeding bad brokers out of the industry, the regulatory environment and labor market sifts bad brokers down the quality ladder over time into brokerage firms who employ brokers with disproportionately higher numbers of customer complaints. These high-risk brokerage firms have loose hiring practices and lax compliance ethics and specialize in preying on unsophisticated investors.

Dimmock et al. [2016], in a related study, discover that financial fraud exhibits contagious behavior. They reveal that a broker's likelihood of engaging in financial fraud is notably affected by the propensity of their colleagues to commit fraud, even after adjusting for firm culture, branch environment, market conditions, and state regulatory oversight.

Howard Allan Epsteins 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. 15.51% 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 Howard Allan Epstein 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 nearly 25 years, SLCG Economic Consulting, LLC ("SLCG") has provided consulting services to individuals, corporations and state and federal agencies mostly related to finance and economics. SLCG professionals include professionals with substantial academic and government experiences who conduct ongoing publishable research.

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