A former representative of MML Investors Services (MMLIS) has been barred by the Financial Industry Regulatory Authority for cheating on a securities examination, ThinkAdvisor reports.
FINRA imposed the sanction on Joshua Ethan Scholnick after determining that on Aug. 25, 2023, while associated with MMLIS, he cheated on the Securities Industry Essentials exam that he took from his home. During the test, FINRA said Scholnick “used his phone to access prohibited study materials to help him answer the test’s questions.”
He did so after acknowledging and agreeing to follow FINRA’s SIE Rules of Conduct, which forbid possessing or using phones, notes, and study materials during the examination. As a result, Scholnick was found to have violated FINRA Rules 1210.05 and 2010, both independently and by virtue of his violation of Rule 1210.05.
FINRA Rule 1210.05 provides that “Associated persons taking the SIE shall be subject to the SIE Rules of Conduct.” FINRA Rule 1210.05 further provides that a violation of the SIE Rules of Conduct is deemed to be a violation of FINRA Rule 2010. FINRA Rule 1210.05 also states that “[i]f FINRA determines that an associated person has violated the SIE Rules of Conduct…, the associated person may forfeit the results of the examination and may be subject to disciplinary action by FINRA.”
FINRA Rule 2010 requires associated persons to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.
The SIE examination is a FINRA examination for prospective securities industry professionals. The examination assesses a candidate’s knowledge of basic securities industry information including types of securities products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices.
In March 2024, MMLIS, a unit of MassMutual, filed a Form U5 disclosing that Scholnick had been “permitted to resign after receiving notification from FINRA with respect to an Event Incident Report stating he potentially was in possession of a mobile device during an SIE Exam.”
To pass the SIE exam, candidates must have a score of 70% or higher on 75 multiple choice questions and have an hour and 45 minutes to complete it.
Prior to taking the test, FINRA said that Scholnick used his cell phone to take photographs of notes and reference materials that he had compiled to study for the exam. Those photographs were on Scholnick’s phone on August 25, 2023, when he logged onto the remote testing platform from his home to take the test. After logging into the remote testing platform and before starting the SIE examination, Scholnick was reminded by the examination proctor that he may not use his phone during the exam or have any powered electronic devices in the testing area.
Scholnick “viewed photographs of the SIE study materials on his phone on numerous occasions” during the exam and “referred to his SIE examination study materials on his phone to help him answer the SIE examination questions,” the order states.
He also “changed his answers to the SIE examination after referring to the study materials on his phone,” FINRA said.
During the exam, “the proctor asked Scholnick why he was looking down continuously and twice told him not to look away from his laptop screen during the examination as it was a violation of the test rules. Scholnick completed his examination and exited the platform without first notifying the proctor,” the order states.
Scholnick received a score of 65% and failed the test.
Scholnick did not admit or deny the allegations but consented to FINRA’s findings. He is now barred from association with any FINRA member in all capacities.
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