The study on "How Widespread and Predictable is Stock Broker Misconduct?" by SLCG, past customer complaints against individual brokers can serve as predictors of future complaints. McCann, Qin, and Yan's research shows that incorporating the complaint histories of co-workers greatly enhances the ability to predict complaints against brokers with no previous complaints. They also established that customer complaints that were denied, rather than just settlements and awards, are valuable for anticipating future investor harm.

In their study, Egan, Matvos, and Seru confirm that the regulatory and labor market mechanisms do not effectively filter out poor brokers from the industry. Instead, they steer these brokers over time towards brokerage firms that employ individuals with a disproportionately high incidence of customer complaints. These firms are characterized by lax hiring practices and relaxed compliance ethics, targeting less sophisticated 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.

Mark Ryans 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. 19.17% 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 Mark Ryan 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.