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.

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.

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.

Harry Ahmed Helmys 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 Harry Ahmed Helmy 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.