In their study "How Widespread and Predictable is Stock Broker Misconduct?" researchers at SLCG discovered that past customer complaints against individual brokers can indicate the likelihood of future complaints. McCann, Qin, and Yan also found that incorporating co-workers' complaint histories notably enhances the predictive accuracy for brokers without prior complaints. Furthermore, they determined that customer complaints that were denied - beyond just settlements and awards - are valuable in forecasting potential 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.

Dimmock et al. [2016] in a related study find that financial fraud is contagious. They find that a broker's propensity to commit financial fraud is significantly influenced by his or her coworkers' propensity to commit fraud after controlling for firm culture, branch atmosphere, market conditions and state regulatory environment.

Bree Nell Simmonss 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. 13.40% 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 Bree Nell Simmons 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.