FINRA Fines and Suspends Rep for Taking or Not Giving A Crap

January 19, 2021

Why do we say that we "take" a crap (or an even more impolite word) when we go to the bathroom, but we say that we don't "give" a crap when we don't care? Where were folks taking crap and how were they giving crap before those expressions came into vogue?  And why the hell would someone gift wrap and present a crap to someone else as a sign of their earnest intentions? Alas -- sigh -- I am indeed laboring under the endless isolation of COVID. Consider a recent FINRA regulatory settlement for what prompted my latest round of intellectual endeavors.

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, Myreon S. McCurty submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Myreon S. McCurty, Respondent (FINRA AWC2019063415501)
The AWC alleges that Myreon S. McCurty was first registered in 2018 with Charles Schwab & Co., Inc. and by October 2019, he was registered with Pershing LLC. The AWC alleges that Myreon S. McCurty "does not have any relevant disciplinary history." In accordance with the terms of the AWC, FINRA found that Myreon S. McCurty violated FINRA Rule 1210 and 2010; and the self regulator imposed upon him a $5,000 fine and an 18-month suspension from association with any FINRA member in any capacity. 

What You Do-Do and Don't Do When You Go to the Bathroom (FINRA version)

What prompted FINRA's double-barreled regulatory sanctions of a fine and suspension? The AWC alleges in part that:

On July 10, 2019, McCurty took the Series 10 qualification examination. Prior to beginning the exam, McCurty attested that he had read and would abide by FINRA's Rules of Conduct. The Rules of Conduct prohibit the use or attempted use of personal items, including personal notes and study materials, during the examination. The Rules of Conduct also state that unscheduled breaks are permitted only for restroom use. During the Series 10 examination, McCurty took an unscheduled break during which he went to the restroom where he possessed unauthorized Series 10 study materials related to the subject matter of the examination. 

Oh my! Who knew? Go figure, right? If  you take the Series 10 - General Securities Sales Supervisor Exam /General Module examination, it's gonna cost you $5,000 and an 18-month sit in the penalty box if you take an unscheduled bathroom break during which you sit on the toilet while in possession of study materials. Sort of makes you wonder what the discounted rate is if you just take an unscheduled bathroom break sans reading materials: $2,500 and a 5-business-day suspension?

SIDE BAR: Just a thought -- y'know, throwin' it out there for Wall Street's inveterate regulators -- but maybe FINRA would consider creating its own bathroom video?  Maybe all test takers should be required to watch the instructive content before entering a testing facility?

In any event, FINRA Rule 1210 "Supplementary Material" states in part:

.05 Rules of Conduct for Taking Examinations and Confidentiality of Examinations. Associated persons taking the SIE shall be subject to the SIE Rules of Conduct. Associated persons taking any representative or principal examination shall be subject to the Rules of Conduct for representative and principal examinations. A violation of the SIE Rules of Conduct or the Rules of Conduct for representative and principal examinations by an associated person shall be deemed to be a violation of Rule 2010. If FINRA determines that an associated person has violated the SIE Rules of Conduct or the Rules of Conduct for representative and principal examinations, the associated person may forfeit the results of the examination and may be subject to disciplinary action by FINRA.

Individuals taking the SIE who are not associated persons shall agree to be subject to the SIE Rules of Conduct. If FINRA determines that such individuals cheated on the SIE or that they misrepresented their qualifications to the public subsequent to passing the SIE, they may forfeit the results of the examination and may be prohibited from retaking the SIE.

FINRA considers all of its qualification examinations content to be highly confidential. The removal of examination content from an examination center, reproduction, disclosure, receipt from or passing to any person, or use for study purposes of any portion of such qualification examination or any other use that would compromise the effectiveness of the examinations and the use in any manner and at any time of the questions or answers to the examinations shall be prohibited and shall be deemed to be a violation of Rule 2010. An applicant cannot receive assistance while taking the examination and shall certify that no assistance was given to or received by him or her during the examination.

Bill Singer's Comment

We got idiots rampaging through the Capitol and millions of folks dying from COVID, but, god bless, FINRA still has its mission and priorities. In the midst of plague times, FINRA has fined and suspended McCurty because he took an "unscheduled" bathroom break with reading materials. 

No . . . don't get me wrong, I'm not saying that FINRA is off base here or even wrong. Rules are rules and if McCurty didn't raise two fingers and didn't get the proctor's permission to go but still went, clearly that's a violation of FINRA's Rules of Conduct. More to the point, he should never, ever have referenced the study materials once the examination had begun. But, c'mon, they don't put folks in prison for 18 months when they engage in crimes on Wall Street these days. 18 months for sittin' on the toilet reading Series 10 materials, seriously?

As the "I Gotta Go" song clearly explains, the hallmark of going to the restroom is "I'm going there full but I'll leave with nothing." On top of that, the song admonishes: "Go. Flush. Wash. Toss." There's no Series 10 study materials in the bathroom! Thankfully, FINRA didn't also cite him for not wiping or washing. 

Sadly, poor McCurty got slammed with a $5,000 fine and a year-and-a-half worth of suspension; and, on top of that, he had to incur the expense of hiring a lawyer.  Somewhere, someone actually went to law school in order to argue toilet etiquette with FINRA! So . . . do you give a crap about this case?