February 20, 2014
Cheating on tests isn't a particularly shocking revelation about Wall Street. I mean, you know, it's pretty much become an industry about getting the jump on the competition, cutting corners, and going to (and sometimes) over the edge. As such, not many of us are going to be surprised about learning that some registered persons look for ways to avoid the drudgery and time involved in preparing for and taking the industry's various qualifying examinations. In a twist on that theme, however, today's BrokeAndBroker Blog presents a case in which a test proctor compromised the system.
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Michael A. Zolondek submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Michael A. Zolondek, Respondent (AWC 2013035948001, January 4, 2014).
Zolondek entered the securities industry in 1994 and by October 2002, he was registered with Farmers Financial Solutions, LLC ("FFS") and employed by its affiliate Farmers Insurance Group ("FIG"), where he was the Life and Financial Services Specialist ("LFSS") until his July 5, 2012 termination. The AWC asserts that Zolondek had no prior relevant disciplinary history.
The Meaning of Life
The AWC asserts that a Life Underwriter Training Council Fellowship (''LUTCF") is a designation for insurance professionals obtained after completing six LUTCF courses involving product knowledge, marketing and sales, customer service and ethics. The LUTCF is conferred jointly by The American College and the National Association of Insurance and Financial Advisors ("NAIFA"). Those seeking the LUTCF designation must pass a final examination with at least a 70% score. State insurance agents in Wisconsin were also eligible to receive continuing education credit for the successfully completion of the LUTCF examination upon submission of a Proctor Affirmation.
For years, the NAIFA LUTCF program was administered on behalf of NAIFA by The American College. That partnership is ending, and NAIFA will announce new curriculum for the NAIFA LUTCF in September of 2014.
Lemme Put It To You Another Way
The AWC asserts that on December 4, 2009, Zolondek
[A]ssisted a registered representative over whom he had supervisory responsibility to cheat on an LUTC examination. Zolondek assisted this individual by identifying the questions that he had answered incorrectly and then asking the questions in a different way than the questions were asked on the examination.
SIDE BAR: I'm sorry but what the hell did that last quoted statement say?
Re-asking a question in a different way than the one that a test-taker had answered wrong doesn't exactly sound like cheating -- it sounds like an after-the-fact conversation or some post-exam review. I think that I know what FINRA was going for here but, wow, the allegation in the AWC falls way short of a cogent assertion of misconduct.
- Zolondek helped the RR cheat by identifying questions that the test taker had incorrectly answered; and
- Zolondek asked "the questions in a different way than the questions were asked on the examination."
In 2012, each online LUTCF course was administered by a moderator via the Blackboard Learning System ("Blackboard"). One of the sponsors of the LUTCF required that students designate a proctor for their final examination, and this proctor was sent a user identification and a password. Thereafter, the student logged on to the Blackboard system and then separately logged into the examination -- the designated proctor would then log the student into the examination using the proctor's user identification and password. At the conclusion of the examination, a student had to complete a proctored examination affirmation ("Proctor Affirmation"), attesting that he or she completed the examination independently.
In 2012, Zolondek moderated the LUTCF courses offered to FIG and FFS employees and contractors in Wisconsin, and he also scheduled the final examinations. The AWC asserts that from October 2011 through April 2012, Zolondek instructed at least three FIG and FFS employees/contractors to falsely sign Proctor Affirmations although those individuals had not proctored the subject examinations. The AWC asserts that these individuals falsely signed no less than 15 Proctor Affirmations for six LUTFC exams.
In accordance with the terms of the AWC, FINRA imposed upon Zolondek a Bar from association with any FINRA-regulated entity in any capacity.
READ: Proctor Impersonates Agent In Online Exam (BrokeAndBroker.com, January 31, 2014). This case also involves Zolondek, although his name is not mentioned in the AWC.