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 results confirm that, rather than weeding bad brokers out of the industry, the regulatory environment and labor market sifts bad brokers down the quality ladder over time into brokerage firms who employ brokers with disproportionately higher numbers of customer complaints. These high-risk brokerage firms have loose hiring practices and lax compliance ethics and specialize in preying on unsophisticated investors.

Dimmock et al. [2016], in a related research endeavor, uncover that financial fraud spreads like a contagion. They ascertain that the likelihood of a broker engaging in financial fraud is significantly affected by the predisposition of their coworkers toward fraudulent behavior, even when accounting for firm culture, branch environment, market conditions, and state regulatory frameworks.

Todd Matthew Resnicks 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. 15.00% 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 Todd Matthew Resnick 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.