Testing FINRA's Test Center Patience

July 11, 2017

Can you bring a small package of tissues into a FINRA test-taking center? If you take a test in a state that permits you to carry a weapon, will you be able to take your Glock or AR-15 into the center? How much crap should you jam into your pockets before entering a FINRA exam center? These and other fascinating questions will be answered in today's BrokeAndBroker.com Blog.

Case In Point

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, Jiaoni Zhu submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Jiaoni Zhu, Respondent (AWC 2016052001701, DATE).

In January 2014, Jiaoni Zhu associated in an unregistered capacity with FINRA member firm Farmers Financial Solutions, LLC. Subsequently from October 2016 through January 2017, Zhu became registered with the firm. The AWC asserts that "Zhu has no disciplinary history."

Takin' the 7 and Takin' 2 Breaks

The AWC asserts that on October 10, 2016, Zhu took the Series 7 examination and prior to beginning the exam she:

acknowledged that, for the duration of the examination, she would not use or attempt to use any personal items such as notes or study materials and would not access her locker during an unscheduled break. During two unscheduled breaks from the examination, Zhu accessed her locker to retrieve and review a study guide and handwritten notes that related to the subject matter of the examination.

Sanctions

FINRA deemed Zhu to have violated FINRA Rule 2010. In accordance with the terms of the AWC, FINRA imposed upon Zhu a Bar from association with any FINRA member firm in any capacity.

Also READ: "Folded Note Found On Test Center Floor"(BrokeAndBroker.com Blog, September 14, 2015)


Bill Singer's Comment

Okay . . . call me curious but if Zhu was caught cheating on October 10, 2016, how come she was still employed "through January 2017?" 

January 5th FINRA Notice to Farmers

According to online FINRA BrokerCheck records as of July 11, 2017, under the heading "Investigation," Farmers Financial allegedly reported that FINRA had notified it of the regulator's initiation of an investigation on January 5, 2017, based upon:

FINRA commenced an examination of an event reported by the Prometric Testing Center (Event Incident Report) related the the [sic] taking of a Series 7 examination.

I don't want to be too picky here but, you know, if Zhu took the exam on October 10th and Prometric detected an "event," then the test-center vendor likely knew of the incident on or pretty close to October 10th -- or so you would think. Unless I'm way off base here, I'm guessing that someone reviewed a video or saw Zhu accessing her locker at the time of the misconduct. The only other possibility is that someone reported Zhu's cheating days/weeks/months after the event. Unfortunately for my insatiable curiosity, the AWC doesn't offer any explanation as to how Prometric learned of the alleged cheating and when FINRA was first notified by the test-center vendor. 

My point in raising the date of notice of the "event" is that it took FINRA nearly three months (from October 10 to January 5) to notify Farmer Financial of the alleged exam misconduct, during which time Zhu was apparently employed at the FINRA member firm. 

Why did it take nine months after the alleged date of the test center misconduct for FINRA to either settle this matter or file a Complaint? The facts are fairly simple: FINRA alleged that Prometric had proof that Zhu cheated on October 10, 2016, and apparently conveyed that to Farmers Financial on January 5, 2017. What further proof did FINRA need? What, if any, defenses did Zhu offer that required at least six (if not nine) months of investigation by FINRA?

Test Center Rules

FINRA posts a "Test Center Rules of Conduct," which is fairly straight-forward but, nonetheless, still mystifies far too many test-takers.  Please familiarize yourself with the posted rules:

Test Center Rules of Conduct

The purpose of this notice is to make sure you understand and acknowledge the FINRA Rules of Conduct. You are required to agree to the following rules before starting your examination or Continuing Education (CE) session.

Test center personnel are NOT authorized to grant exceptions to any of these rules.

Personal Items

For the duration of my examination or CE session, I will not use or attempt to use any personal items, such as:Mobile Devices or Cameras

Cellular Phones

Handheld Computers

Any Communication or Recording Devices

Watches

Personal Notes

Study Materials

Formulas

I will store all personal items in the locker provided by the test vendor prior to entering the test room.

I acknowledge that if I bring a personal item into the test room, I will cooperate with the Test Center Staff in the inspection of the item(s). I further acknowledge that these items may not be returned to me.

Behavior/Conduct

I will not engage in any conduct that is disruptive, disrespectful or threatening. Further, I will not engage in any conduct that creates a disturbance or interferes with Test Center operations.

Unscheduled Breaks

I understand and acknowledge that unscheduled breaks are permitted only for restroom use. If I take an unscheduled break during my session, I will not access my locker or leave the building, and I will not receive additional time to complete the examination or CE session. Repeated or lengthy departures from the test room for unscheduled breaks will be reported to FINRA for investigation.

Assistance

I will not receive or attempt to receive assistance related to examination or CE content from any person for the duration of my session.

I will not provide or attempt to provide assistance related to examination or CE content to any other person for the duration of my session.

Confidentiality

I acknowledge that examination and CE materials are the property of FINRA and/or the organization(s) that developed the materials. I will maintain the confidentiality of these materials, including the questions and my answers to the questions.

I will not remove or attempt to remove, whether through physical means, a recording device or otherwise, any written, printed, electronic or recorded materials from the Test Center ("Test Center Material") other than the score report provided by the Test Center Staff.

I will not electronically capture or attempt to capture any examination or CE content from my computer screen.

I will not reproduce or attempt to reproduce examination or CE materials through memorization or any other means. This prohibition includes but is not limited to discussing, posting or disclosing such content via email, social media or other Internet presence, or otherwise. I understand that this disclosure prohibition applies before, during and after my session.

I will not disclose or discuss with anyone, including training instructors, information about the items or answers in my examination or CE session.

Attestation/Candidate Agreement

I am the person I represent to be for this session.

If I do not follow these rules or I am suspected of cheating or tampering with the score report, the incident will be reported to FINRA and will subject me to possible disciplinary action by FINRA, another self-regulatory organization, the Securities and Exchange Commission, or any other regulator (government or private) that has jurisdiction over my activities and could result in my being barred from employment/association within the financial services industry and forfeiture of my session results.

I understand I will be monitored at all times during the session to ensure that strict adherence to security measures is maintained by all persons. Monitoring may include audio and video recording.

Test Center Security

Also, be aware that there are
Test Center Security Guidelines, and that they may vary from one test vendor to another. As those guidelines admonish in pertinent part:

Member firm candidates refusing to abide by a vendor's security procedure and/or protocol will be refused entry to the testing lab and a late cancel fee will be charged to the candidate's firm. Form U10 candidates will be denied entrance as well and their enrollment window will be forfeited.

Although some of the test center rules may be intuitive, many are not. For example, candidates are required to "empty and turn pockets inside out." One test-center vendor will subject you to a metal detector want although the other apparently doesn't. Among the center policies that you should certainly consider is that:

Weapons of any kind are strictly prohibited at test center.

Cellular phones, hand-held computers or other communication devices, electronic or otherwise, are strictly prohibited from being taken into a testing room or being used during restroom breaks.

Among the odder variations of test-center policies is that one vendor will allow "Unwrapped" cough drops into the center but the other prohibits all kinds of cough drops. Also, both vendors allow an asthma inhaler but only if pre-authorized by FINRA -- so if you suffer from asthma, make sure to get FINRA's permission to use your inhaler in the test center. Also, only one test center provides tissues, so make sure you know whether to bring your own package of Kleenex.