According to FINRA, Kellen Michael Ferris was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for 18 months for taking a remote FINRA Series 7 examination while in possession of prohibited materials.
Before beginning the examination, Ferris attested that he read and would abide by the Rules of Conduct, which required candidates testing remotely to store all personal items, including study materials and electronic devices, outside of the room in which they were taking the examination prior to taking the test. However, during the examination, Ferris possessed personal items in his testing room, including study materials related to the examination and an electronic tablet. Staff for the third-party administrator of the exam, who used video to proctor the examination remotely, discovered the personal items after instructing Ferris to display his testing room by video using his computer's camera.
The suspension is in effect from December 19, 2022, through June 18, 2024.
The integrity of FINRA's qualification examinations is fundamental to protecting investors. These examinations are designed to ensure that individuals working in the securities industry possess the knowledge and competence necessary to serve customers properly. The Series 7 exam, formally known as the General Securities Representative Examination, tests knowledge of a wide range of securities products, regulations, and concepts. Passing this exam is required for most individuals who will sell securities products.
When candidates cheat on qualification examinations by possessing prohibited materials, they undermine the entire licensing system. A person who passes an exam through cheating may not actually possess the knowledge tested by the exam, creating risk for the customers they will serve. Moreover, cheating demonstrates a lack of integrity and willingness to violate rules, which are serious concerns in an industry built on trust.
The remote testing environment, implemented in response to the COVID-19 pandemic, relies on candidates' honesty and adherence to the Rules of Conduct. While remote proctoring through video surveillance provides some oversight, it cannot monitor as comprehensively as in-person testing. Ferris's decision to possess study materials and an electronic tablet in his testing room, despite attesting that he would follow the rules, represents a deliberate violation of the testing rules.
The 18-month suspension is substantial and reflects the seriousness of exam-related misconduct. During this suspension, Ferris cannot work in any capacity at a FINRA-member firm. This suspension essentially derails his career in the securities industry for a year and a half and serves as a deterrent to others who might consider cheating on qualification exams.
For investors, this case serves as a reminder that not all licensed representatives have demonstrated genuine competence. While most representatives pass exams legitimately through studying and knowledge, cases like this reveal that some may have cheated. This underscores the importance of assessing your broker's knowledge and competence through your interactions, not just assuming that their licenses guarantee competence.
For individuals preparing to take FINRA exams, this case offers a clear message: cheating will be detected and will result in serious sanctions that can derail your career. The consequences of getting caught far outweigh any short-term benefit of potentially passing the exam through dishonest means. Study honestly, seek additional training if needed, and retake the exam if necessary—these are the appropriate responses to exam difficulty.
