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Business Observer Friday, Nov. 21, 2014 3 years ago

Shady brokers flock to Fla

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Collier, Lee and Sarasota counties recently scored high on a not-so-good list, of places nationwide with high concentrations of stockbrokers who face some sort of red flag for alleged shady business practices.

Collier, Lee and Sarasota counties recently scored high on a not-so-good list, of places nationwide with high concentrations of stockbrokers who face some sort of red flag for alleged shady business practices.

The counties showed up in a Wall Street Journal analysis of 87% of the nation's 630,000 registered stockbrokers. The newspaper, in a Nov. 12 story, analyzed 2014 records for what it says are the red flags for which regulators look. Those include regulatory actions, criminal charges, client complaints, recent bankruptcies and terminations. The red-flag tally, the article states, includes unproven allegations and dropped complaints.

Turns out that mix is potent in some parts of the Gulf Coast. Sarasota, the article states, has the third highest red-flag rate in the country, behind the Boca Raton-Fort Lauderdale area and Long Island, N.Y. Lee-Collier, one region in the article, was right behind Sarasota. In total, five of the 16 hotspots discovered by the paper were in Florida, with the addition of the Treasure Coast and southern Miami-Dade County.

In Sarasota there were 47 brokers, or 4.8% of the 980 registered brokers, with three or more red flags. There were also 4.5 disclosures for every 10 brokers, 108% higher than the rate among all brokers, the article states. Sarasota's tally of regulatory events, investigations and civil judicial actions was 203.4% above the national average. Customer complaints and criminal disclosures were likewise above the national average.

Lee-Collier had 67 brokers, or 4.8% of the 1,402 registered brokers, with three or more red flags. Regulatory events, investigations and civil judicial actions, customer complaints and terminations for cause in Lee-Collier were all above the national average, the analysis shows.

One seemingly obvious piece of the report: Brokers with poor records, the article states, were clustered in areas with two demographic standouts: elderly and wealthy people. In Sarasota, for example, the share of households headed by people aged 65 and up with incomes of at least $100,000 is 213% greater than the country. That metric, the article states, is 314% greater than the country in Lee-Collier.

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