FINRA Addresses Exam Cheating at Board Meeting

Last week, the FINRA Board of Governors met virtually for its June 2020 meeting to discuss several important topics, including proposed procedures to address cheating on qualification examinations. This decision comes after several securities professionals were caught cheating, or intended to cheat, on entrance exams.

Rep Caught Cheating (Twice)

In April, FINRA suspended an ex-Merrill Lynch general securities representative for two years after he was caught possessing and accessing personal notes and other “unauthorized materials” while taking two separate industry exams, within two months of each other. Without admitting or denying the findings, the individual in question agreed to be suspended from associating in any and all capacities with any FINRA member firm for 24 months and to pay a $5,000 fine over the incidents.

Former Harvard Grad & CCO Barred

A former Harvard grad and chief compliance officer at a Texas financial services firm was recently charged for cheating on a competency exam. While retaking the general security principal qualification exam after failing his first try, the individual allegedly scribbled notes on his fingers, forearms, and driver’s license that he obtained during an unscheduled break. Concluding that “he cheated,” FINRA barred the firm member from associating with any FINRA member firm and ordered him to pay $5,110 in costs.

Goldman Rep Brings Phone to SIE Exam

In a separate but similar case, FINRA suspended a Goldman Sachs investment banking representative for 18 months after learning that the representative had her cellphone with her while taking the SIE exam. The representative later agreed to the suspension and to pay a $5,000 fine over the incident.

While it’s still unclear what changes FINRA proposed to remediate such cheating in the future, we expect to see an update from President and CEO, Robert Cook, in the next few weeks. To learn more about FINRA’s Board of Governors meeting, click here