Brokers must take tests. It's a fact of Wall Street life. That some people will go too far in an effort to pass them is sadly a fact of industry life, too. Here are a few of the more egregious examples:
That's an Old Photo of Me
Dmitry Verkhovsky (NASD AWC/ C10040018/May 2004) and Galina Tedeeva (NASD AWC/ CLI040035/ January 2005) each paid stand-ins to take their Series 6 and 63 exams for them. Both were caught and both were barred from the industry.
A Conspiracy of Paper
Test takers who show up but then cheat on the exam may not get off any easier. While Juan Gascot-Jimenez (NASD OS/C07020018/April 2004) was taking the Series 7 exam he was caught using a crib sheet. He too was barred from the industry.
If you're caught with a crib sheet, but not in the act of using it, you may not be barred, though you still will face a stiff penalty. While taking her Series 7 exam, Brooke Sasha Toribio (NASD AWC/C07040060/August 2004) was found to be in possession of some notes. She was fined $5,000 and suspended for one year.
Similarly, while taking his Series 7 test, Gabe Weinert (NASD AWC/ C8A030058/September 2003) left the exam center for the bathroom with a scratch sheet in hand — twice. Oddly, this repeat offense resulted in a relatively light penalty. Weinert was fined $2,500, suspended for six months and was required to qualify all over again.
Failing Up
Some test takers may wait till they get the results back before they break the rules. That was the case with Dulce Maria Salaverria* (NASD C07040077/ May 2005) and Heather Anne Raymond (NASD AWC/C9B040107/February 2005). They changed a failing grade to a passing one and were barred for the liberties they took. This is a particularly futile effort because the scores are maintained on a centralized computer system. At best, this is delaying the inevitable.
However, if you change a failing grade to a higher failing grade, you may not get barred — but you will suffer for improving upon your failure. At least, that was the case with Richard Leaf Levardsen (NASD AWC/E102004117601/November 2005). He changed the 45 he got on his Series 7 exam to a score of 65 and submitted it to his firm. While good enough for a passing grade on most tests, it isn't for this one. The grade he gave himself was, of course, still five points too low to pass and, while no one could say he fudged his way to a license, he was found to have violated NASD rules by improperly altering his report in order to convince his firm that he failed with a higher grade than the one he actually got.
For failing up, Levardsen was fined $5,000 and suspended six weeks in all capacities.
Extra Credit
What are the lessons to be learned from these cases? It's not only against NASD rules and regulations to cheat on exams, it's an act of stupidity that may end your career. The NASD knows all about imposters, crib sheets, doctored scores and any other dumb scheme you thought was brilliant in high school. They're watching and have been catching violators for years. If they catch you at your scam, you'll pay dearly.
*With the exception of Salaverria, all respondents in this story settled their cases without admitting or denying the allegations.
Note: Stipulation of Facts and Consent to Penalty (SFC), Offers of Settlement (OS) and Letters of Acceptance, Waiver and Consent (AWC) are entered into by respondents without admitting or denying the allegations, but consent is given to the described sanctions and to the entry of findings.
Writer's BIO: Bill Singer is a practicing regulatory lawyer and the publisher of RRBDLAW.com