Folded Note Found On Test Center Floor

September 14, 2015

You've studied for weeks but you still bring notes to the school or exam center, and you read those notes in the hallway -- right up until the announcement that the exam will start shortly and all papers, cards, laptops, and tablets must be put away.  Sadly, there are those who cheat and don't follow the rules. Of course, there are always those who are so overwhelmed by the testing process that they simply forget about a folded piece of paper in their jacket pocket or that they had placed some notes on their cellphone. If the rules are no notes inside the testing facility, there isn't much nuance with that "no." Whether you're caught with notes because you forgot about them or because you were cheating may make a big difference when it comes to the punishment. On the other hand, when that distinction isn't spelled out in a regulatory settlement, it sort of raises questions as to whether the fines and suspension could have been much worse or were simply fair as imposed.

Case In Point

In response to the filing of a Complaint on January 9, 2015, by the Department of Enforcement of the Financial Industry Regulatory Authority ("FINRA"), Respondent Bryan Patrick Stevenson submitted an Offer of Settlement dated August 14, 2015,, which the regulator accepted.  Under the terms of the Offer of Settlement, without admitting or denying the allegations in the Complaint, Respondent Bryan Patrick Stevenson consented to the entry of findings and violations and to the imposition of the sanctions. FINRA Department of Enforcement, Complainant, vs Bryan Patrick Stevenson, Respondent (Offer of Settlement, 2013038822001, September 2, 2015).

Stevenson entered the securities industry in Februray 2013 and by June 2014 he was registered with FINRA member firm Farmers Financial Solutions, LLC.

Test Center Rules

The FINRA Settlement alleges that on August 27,, 2013, Stevenson arrived at a Prometric Testing Center for the purpose of taking the Series 7: General Securities Representative examination. Prior to accessing the online examination, Stevenson had agreed to be bound by the FINRA Test Center Rules of Conduct and was further prompted by the following computer-screen admonition:

I must not take or attempt to take any personal items including but not limited to, notes, formulas, study materials, or electronic devices into the testing room. I will place all personal belongings in the locker provided by the testing vendor prior to entering the testing room.

SIDE BAR: According to an online FINRA document, the self-regulatory organization imposes the following test center regulations:

Prohibition Against Assistance, the Use of Study Materials or Misconduct
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
Personal Notes
Study Materials

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.
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.
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.
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.
The FINRA Settlement asserts that during a required halfway break at about 11:36 a.m., Stevenson exited the testing room and signed out at the Test Center Administrator station. Shortly after Stevenson walked away from the station, a Test Center Administrator purportedly:

found a folded piece of of paper on the floor in front of the station and picked it up. The paper was a white single sheet, sized 5.25" x 8.25", and had notes and formulas written on both sides of the paper. Crease lines on the paper indicated it had been folded into a small size.

Going to the Tape

Following the discovery of the paper, the Administrator purportedly reviewed video footage and determined that the white paper found by the TCA belonged to Stevenson. In a letter to FINRA dated November 27, 2013, Stevenson apparently admitted that the piece of paper was his. As set forth in the FINRA Settlement asserts:

The paper that Stevenson admitted was his contained study materials that would have been useful for the examination, albeit there is no evidence that he intended to use the material during the examination.

Going to the Sanctions

FINRA deemed Stevenson's bringing of study materials onto the testing premises as a violation of FINRA Test Center Rules of Conduct and of FINRA Rule 2010. In accordance with the terms of the Settlement, FINRA imposed upon Stevenson a $5,000 fine and  six-month suspension association with any FINRA member.

Bill Singer's Comment

No . . . this isn't a particularly tough settlement to justify and, let me be clear, very clear, I have absolutely no issue with prosecuting such misconduct and imposing fines, suspensions, and bars.  Is that clear enough?

On the other hand, I'm a bit puzzled by how all the parts supposedly fit together here. Stevenson takes a break. While he goes on break a piece of paper is discovered on the floor near the Administrator's station where Stevenson apparently signed out. The Administrator then checked a video and determined that the paper with the notes on it was Stevenson's.

Okay . . . ummm . . . you think that FINRA would sort of share with us just what was on the video that prompted the Administrator to conclude that the paper was Stevenson's? I mean, geez, if the tape showed Stevenson removing the paper from his pocket and throwing it on the floor, or if the tape showed that while bending over to sign the sign-out sheet that the paper inadvertently fell out of Stevenson's pocket, why not offer that important tidbit?

Similarly, given that Stevenson admitted that the notes were his (and those notes were specifically prohibited from being brought into the testing center), what's the deal with the concession in the FINRA Settlement that "there is no evidence that he intended to use the material during the examination?" More explicitly, did Stevenson affirmatively deny that he used the note despite having wrongly brought them into the center? Was this a situation where he was prepping up until the last minute and then absent-mindedly folded the notes and jammed them into his coat pocket?  Is its FINRA's contention that Stevenson likely used the notes to cheat but that there is no proof of that fact and he adamantly refuses to concede the point?

In trying to understand the imposition of the six-month suspension and fine, I'm unable to figure out if lesser sanctions would have been acceptable if the incident was shown to have been inadvertent; or, in contradistinction, if there was proof that Stevenson had actually used the notes during the examination, would the sanctions have been more severe.