Merrill Lynch Trainee Doctors Failed Scores And Tests FINRA's Patience

April 18, 2012

Is it A, B, C, All Of The Above, or None Of The Above?

In response to the filing of a Complaint on February 10, 2012, by the Department of Enforcement of the Financial Industry Regulatory Authority ("FINRA"), Respondent Justin M. Witt submitted an Offer of Settlement dated March 21, 2012, which the regulator accepted.  Under the terms of the Offer of Settlement, without admitting or denying the allegations in the Complaint, Respondent Witt consented to the entry of findings and violations and to the imposition of the sanctions. FINRA Department of Enforcement, Complainant, vs Justin M. Witt, Respondent (Offer of Settlement, No. 2011029086401, April 11, 2012).

Witt became associated with Merrill Lynch, Pierce, Fenner & Smith, Incorporated ("Merrill Lynch") on May 23, 2011 and was enrolled in the firm's training program, where he prepared for his General Securities Representative qualifications examination (the "Series 7") .  Thereafter, on July 24, 2011, Witt sat for the examination at the Prometric Testing Center in Dallas, TX.

Alas, Witt failed the examination with a score of 64%.

Well sort of - I mean, there was no question that he failed but there was a little bit of an issue as to how he conveyed that information to Merrill Lynch.  You see, on July 25, 2011, Witt reported to Merrill Lynch's Office Financial Trainee Coach that he had passed.

Why any trainee would lie about passing any registration examination is beyond me because these scores are part of a computerized database and are separately reported to the sponsoring member firm.  In fact, on the same day that Witt told Merill Lynch that he had passed the Series 7, the firm received an email notice that he had failed.  Which prompted the employer to investigate.

As these things have a way of going from bad to worse and then to disaster, on July 28 and 29, 2011 Witt respectively faxed and emailed to Merrill Lynch a copy of a falsified score report showing that he had scored an 82%.  The fabricated document was titled:  "FINRA PROCTOR Delivery System; Financial Industry Regulatory Authority."

So, now, not only have you lied about passing an exam that there's no way you can avoid your employer from learning that you failed, but you've taken things to a whole new level by submitting fairly useless proof that you're pretending was sent by an industry regulator. Ouch!

Relying upon Witt's representations, on July 29, 2011, Merrill Lynch contacted the FINRA Gateway Call Center and reported that Witt had passed the Series 7 examination with a score of 82%.

No, things are not going to end well here.

It's not nice to fool Mother Nature or Father FINRA.  Someone at FINRA must have been puzzled to learn that this Witt fellow passed the Series 7 with an 82 when their records were showing a failure with a 64.  Which, of course, on August 10, 2011, prompted FINRA to ask Merrill Lynch to send them a copy of the original score report â" which resulted in Merrill Lynch asking Witt to provide his copy.

Okay, so, here we go - the dog ate my homework.

On August 11, 2011, Witt informed Merrill Lynch that he could not locate the original copy of his July 24, 2011 Series 7 examination results.  Seems that someone didn't fully think this one through.

On August 11, 2011, Merrill Lynch requested that FINRA email it a copy Witt's score report, which was sent that same day and resulted in Witt crumbling and fessin' up: He admitted fabricating the passing score and accepted responsibility. Merill Lynch terminated him that day.

y letter dated September 15, 2011, FINRA staff requested that Witt provide a written response regarding Series 7 examination test report.  Witt did not respond - and failed to respond to subsequent written demands sent on October 7, October 28, November 15, and December 2, 2011. In fact, as of the date of the Offer of Settlement, Witt never responded to FINRA.

Based upon Witt's fabrication of the exam score and his failure to cooperate in a FINRA investigation, he was charged violating FINRA Rule 2010, 8210, and 2010. Accordingly, FINRA ordered Witt barred from association with any FINRA member in all capacities.

Bill Singer's Comment

I report this settlement not to humiliate Mr. Witt but to warn  other test takers against ambling down the same path.  If you fail a FINRA administered registration examination, please, for godsakes, please, do not lie about it and tell a supervisor that you passed â" and, as if I haven't already made myself quite clear, don't fabricate a fake FINRA report indicating that you passed.

I'm a former Series 7 and Series 63, so, yes, I get it. You fail the exam, you may lose your job at Merrill Lynch, Morgan Stanley, JP Morgan, Wells Fargo, UBS, and many other firms; however, losing a job is preferable to getting barred from the industry and having a disciplinary record that will haunt you for decades.  Bottom line: The best response to a failed test score is to study harder for the next exam.

While industry outsiders may think this is a rare scenario, it is not. Consider this recent case for yet another example: Chase Employee Doctors Failing Test Score And Pays Price (Street Sweeper, August 12, 2011).