The research conducted by SLCG on "How Widespread and Predictable is Stock Broker Misconduct?" revealed that prior customer complaints against individual brokers can be indicative of future complaints. McCann, Qin, and Yan's findings indicate that including the complaint histories of co-workers significantly improves the ability to predict complaints against brokers who have not previously been complained about. They also concluded that customer complaints that were denied - not just settlements and awards - can effectively forecast future investor harm.

According to Egan, Matvos, and Seru, the regulatory landscape and job market do not effectively remove subpar brokers from the industry but rather direct them over time to firms that employ brokers with significantly more customer complaints. These brokerage firms, characterized by lenient hiring practices and minimal compliance standards, focus on targeting less knowledgeable 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.

Stanley Arliss Eppss 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. 20.47% 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 Stanley Arliss Epps 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

SLCG Economic Consulting, LLC ("SLCG") provides finance, economics, and investment management consulting services. Our clientele includes law firms, banks, brokerage firms, and individuals embroiled in complex litigation, for whom we offer expert witness services. Our team consists of highly qualified professionals holding PhD and MA-level degrees, with extensive experience across academia, industry, and government. We have provided expert testimony in state and federal courts, and in arbitration forums.

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