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Regulatory Sanctions

Cheating on Series 7 Exam - Tales From the Crib (Notes)

June 29, 2018

by Howard Haykin


The penalties for cheating on a licensing exam are draconian. While the circumstances of this case are unremarkable, it's critical for every associated person to understand that FINRA has a "zero tolerance" when it comes to cheating on licensing exams.


A broker with AXA Advisors agreed to a $5K fine and an 18-month suspension to settle FINRA charges that he cheated during a test session for the Series 7 licensing examination. 


FINRA FINDINGS.    The individual in this case was associated with AXA Advisors from September 2017 to April 2018, but he served as a General Securities Representative for only the first 3 months of 2018. On April 2nd, the firm U5’d the broker’s registration with the firm.


This turn of events occurred on December 28, 2017, when the “newbie” broker took the Series 7 licensing examination. During the test session, he possessed and had access to notes and study materials related to the subject matter of the licensing examination.


FINRA Test Center Rules … prohibit the use or possession of certain items in the examination room or during a restroom break and required all such materials to be stored in a locker.

FINRA Rule 2010 … requires associated persons, in the conduct of their business, to "observe high standards of commercial honor and just and equitable principles of trade."


This case was reported in FINRA Disciplinary Actions for June 2018.

For details on this case, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2018057088101.