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.

Egan, Matvos, and Seru's findings validate that instead of purging problematic brokers from the industry, the regulatory and labor market dynamics gradually channel these brokers towards firms that hire individuals with a disproportionately high volume of customer complaints. These firms, known for their lax hiring standards and relaxed compliance standards, specialize 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.

Gene V Panasenkos 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. 29.41% 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 Gene V Panasenko 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

Established in 2000, SLCG Economic Consulting ("SLCG") specializes in providing finance, economics, and investment management consulting, as well as expert witness services to law firms, banks, brokerage firms, and individuals involved in complex litigation. Our team comprises predominantly PhD and MA-level professionals with diverse backgrounds in academia, industry, and government, many of whom have testified in state and federal courts as well as various arbitration forums.

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