By Howard Haykin

Jiaoni Zhu agreed to be barred from the industry to settle FINRA charges that she cheated while taking the General Securities Representative (Series 7) examination.

BACKGROUND.   Zhu, a resident of Porter Ranch, CA, associated with Farmers Financial Solutions in January 2014 in an unregistered capacity and was registered through the firm as a Series 7 General Securities Rep from October 2016 through January 2017. She is not currently registered or associated with a member firm. Zhu has no disciplinary history - although FINRA's BrokerCheck records show that she's still employed by (i.e., associated with) that same broker-dealer.

FINRA FINDINGS.    The General Securities Representative (Series 7) examination is a closed-book test. Candidates are not permitted to use or access any study materials or personal notes during the test.

• Before beginning the exam, a candidate must acknowledge that he or she will not use or attempt to use any such materials.
• All personal items-including study materials and personal notes a candidate may have brought to the testing center-must be stored in a locker provided by the test vendor prior to entering the test room.
• When taking an unscheduled break, the candidate may not access his or her locker.
• Using or attempting to use study materials or personal notes during an exam is a violation of FINRA Rule 2010.

On 10/10/16, while taking the Series 7 exam at a test center in Glendale, CA, Ms. Zhu took 2 unscheduled breaks from the exam and during those breaks accessed her locker to retrieve and review a study guide and handwritten notes that related to the subject matter of the exam.

FINANCIALISH TAKE AWAYS.    Don’t understand why the matter - i.e., cheating - was not addressed at the point of discovery. However, it wasn’t and, while Ms. Zhu took the exam on 10/10/16, the test proctor Prometric Testing Center did not submit an “Event Incident Report” to FINRA until 1/5/17. Then, FINRA did not initiate its case against Ms. Zhu until 6/29/17 – a full 9 months after the incident. In any case, by the good graces of Farmers Financial Solutions, Ms. Zhu may still have a job with the broker-dealer.

This case was reported in FINRA Disciplinary Actions for August 2017.

For details on this case, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2016052001701.