Delayed Detection, Swift Blame: Investor Responses to Advisor Misconduct in Market Downturns

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Tác giả: Jun Honda

Ngôn ngữ: eng

Ký hiệu phân loại: 364.143 Offenses against public order

Thông tin xuất bản: 2025

Mô tả vật lý:

Bộ sưu tập: Metadata

ID: 226829

Financial misconduct in advisory services persists despite ongoing regulatory oversight, raising important questions about its endurance and the nature of retail investor responses. Using detailed FINRA BrokerCheck data - capturing the time from the initiation of misconduct to its detection - we document pronounced heterogeneity in detection lags. Although detection is generally delayed, our analysis reveals that investor responses are markedly swifter during market downturns, suggesting that substantial portfolio losses prompt investors to quickly assign blame to their advisors. These findings contribute to our understanding of how adverse economic environments can trigger more immediate investor reactions, even when overall detection remains sluggish.
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