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.

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.

Frank Edward Baars 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. 21.30% 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 Frank Edward Baar 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.