The Lacuna Project

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Exhibit 1171

The Market for Financial Adviser Misconduct

Exhibit 1171 ยท Journal article

The Market for Financial Adviser Misconduct

Seven percent of advisers have misconduct records, and this share reaches more than 15% at some of the largest advisory firms.

Universe of U.S. financial advisers 2005-2015. Misconduct is concentrated in particular firms, repeat offenders are rehired by firms that already have high misconduct rates ("matching on misconduct"), and firms discipline about half of offenders. Offender turnover moves people and leaves the firm-level rate. Abstract read (OpenAlex).

Source
Egan, Matvos and Seru, Journal of Political Economy 127(1):233-295
Date
February 2019
Quoted from
Abstract
Grade
Peer-reviewed
Document
https://doi.org/10.1086/700735
Accessed
2026-11-10
Cited by
Findings citing this exhibit
Note
Standing note: large administrative dataset; the authors' preferred explanation is consumer sophistication, so the result is about firms specializing in misconduct for a customer base, not about institutional capture. Use for firm-level concentration only.

Cited by

No published finding cites this exhibit.