Continuing Ed Cheat Sheet Gets Stockbroker Detention

December 18, 2012

Illustration for Cheating Français : Illustrat...

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, David Kevin Roddey  submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of David Kevin Roddey, Respondent (AWC 20120336740, December 14, 2012).

Roddey entered the securities industry in 1994 and during the times relevant to the FINRA disciplinary matter was registered with CitigroupGlobal Markets, Inc. ("CGMI") from February 2004 to March 2009.  The AWC asserts that Roddey has no prior disciplinary history.

Lincoln Financial Group sold "MoneyGuard," universal life insurance with long-term care benefits, through wholesalers to financial advisors. By January 2008, a number of states includingFlorida required that financial advisors complete a long-term care continuing education ("LTC-CE") course prior to being permitted to sell LTC insurance to retail customers.  Towards complying with the LTC-CE certification, Lincoln authorized its wholesalers to give financial advisors vouchers from  SCE, a CE provider. The vouchers enabled the advisors to take the LTC-CE examination through SCE at no charge either by

  • submitting a hard copy paper test; or
  • logging on to the provider's website via the voucher code.

Those passing the examination got a LTC-CE credit, acceptable to Florida among other states.

Alas, for some, playing by the rules just doesn't cut it anymore. Frankly, if you go by recent headlines, this is far from an isolated problem onWall Street - it's becoming pandemic to the industry.

According to the AWC, certain Lincoln wholesalers created answer keys for SCE's LTC-CE examinations for various states; and those keys were distributed throughout the Lincoln business unit that sold MoneyGuard and ultimately to outside registered representatives. One such cheat sheet found its way to Roddey via a November 10, 2008 email from a Lincoln wholesaler. On January 7, 2009, Roddey improperly used that answer key to complete the SCE Florida LTC-CE examination in violation of FINRA Rule 2010.

In accordance with the terms of the AWC, FINRA imposed upon Roddey a $5,000 deferred fine and a  one-month suspension from association with any FINRA member firm in any capacity.

Exam cheating is not a particularly isolated fact patterns for Wall Street. "Street Sweeper" has written about testing hi-jinks by folks at Merrill Lynch, Wedbush, Chase, MetLife, and other firms. As the reported cases show, sometimes folks cheat on their exams, sometimes they fudge their scores, and other times, well, if you can think of a variation, someone has likely done it already.  Word to the wise: Study!