This paper examines the impact of local competition and local firm market power on misconduct by analyzing the investment adviser market. The study is based on an extensive sample of more than 3.8 million employee-year observations of investment advisers resulting in 709,416 firm-county-year...

Stock market cycles affect an investment advisor's income, as a significant portion of their compensation is fees from AUM. However, the effect of the market-induced variation in income on the advisor's propensity to commit misconduct is unclear. Given no change in expected lifetime income, it...