The Financial Industry Regulatory Authority (FINRA) has permanently barred two representatives from the securities industry for cheating during their online qualification examinations. According to FINRA, this marks the first time the self-regulatory authority has brought action against brokers for cheating on remote exams.
“Test cheaters are on notice: Regardless of the testing environment, FINRA remains vigilant in our efforts to detect cheating and will vigorously pursue disciplinary action—including permanent bars—against any individual who cheats on qualification examinations,” said Jessica Hopper, FINRA’s executive vice president and head of enforcement.
In response to the COVID-19 pandemic, candidates have been permitted to take qualification exams through an online testing service as well as in person. Online examinations use camera-equipped computers and are proctored remotely by testing service staff.
In the two separate matters, FINRA found that each individual violated FINRA rules of conduct by seeking assistance from public internet forums while taking the online examinations. The exams where cheating took place included the Series 7, Series 66, Series 63 and Series 79.
While this case is novel in that it’s the first time FINRA has barred individuals for remote cheating, that’s not to say they haven’t caught test takers red-handed before. Since January 2021, FINRA has suspended or barred 12 individuals for cheating on in-person exams or possessing unauthorized materials during their testing sessions, but these are the first punishments involving remotely proctored tests.
This cheating scandal comes just a couple of weeks after the SEC fined Ernst & Young $100 million for cheating on ethics exams. In that particular case, the agency found that beginning in 2017, 49 employees shared or received answers to ethics exams they needed to get licensed as certified public accountants.
To read the complete FINRA press release, click here.