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.

According to Dimmock et al. [2016], in a related investigation, financial fraud exhibits a contagious nature. Their findings indicate that a broker's likelihood of perpetrating financial fraud is strongly influenced by the propensity of their colleagues to commit fraud, independent of factors such as firm culture, branch atmosphere, market conditions, and state regulatory policies.

James Anderson Martins 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. 15.70% 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 James Anderson Martin 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.