by Bill Singer
If 6 Was 9 And An 80 On the 7 Turned Up To Be 70
January 7, 2015
Like, wow, man, this is a far out Wall Street regulatory thing about numbers, if you know where I'm comin' from and can dig it. But, hey, it's all cool and groovy what I'm laying down here and you better be waving your freak flag high because as Jimi Hendrix once said:
Now, if 6 turned up to be 9,
I don't mind, I don't mind.
In fairness to Jimi, it's a new song these days and FINRA's lyrics are different. The self-regulatory organization recently found one associated person's efforts to be off-key when he proposed that an 80, which was a 70, was like a 72. Unlike the rock 'n roll icon, FINRA does mind.
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, Jose Miguel Valdes submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Jose Miguel Valdes, Respondent (AWC # 2013038220902, December 19, 2014).
Valdes became associated with FINRA member firm Intercam Securities, Inc. in February 2013, where he remained until December 9, 2013; thereafter, he started a second stint with the firm on September 18, 2014. The AWC asserts that Valdes had no prior disciplinary history.
70 On The 7
On July 9, 2013, Valdes took the Series 7 examination and at the conclusion of the electronic test, he was shown screenshots disclosing his failing grade and instructions for filing to retake the examination. Additionally, the testing center provided him with a hard-copy of his failing score of 70%.
SIDE BAR: Oddly, the AWC fails to disclose that a 72% is the minimal passing grade -- although the AWC does assert that Valdes failed the exam, it would have been helpful to note the numerical value of the threshold in the regulatory settlement.
70 Becomes 80
The AWC asserts that shortly after the exam, Valdes telephoned Intercam and informed his employer that he had a passing score of 80%
Not Adding Up
Upon his return to the workplace on July 15, 2013, Valdes met with Intercam's Chief Compliance Officer ("CCO") in furtherance of the firm's processing of paperwork for newly registered representatives. During this process, the CCO checked with the Central Registration Depository and discovered that Valdes had failed the July 9th exam. Thereafter, the CCO asked Valdes for a copy of the hard-copy scoresheet provided to him at the testing center. In response, Valdes allegedly provided a doctored scoresheet showing a passing grade.
If 6 Was 9 And 70 Was 72 or 80
FINRA alleged that by falsely representing to Intercam that he had passed the Series 7 examination on July 9, 2013, and by providing the falsified score sheet to the firm, Valdes had violated FINRA Rule 2010. In accordance with the terms of the AWC, FINRA imposed upon Valdes a Bar from association with any FINRA member in all capacities.
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