According to FINRA, Stephen J. LaGreca was fined $5,000 and suspended for 18 months for possessing unauthorized materials while taking the General Securities Representative Series 7 exam.
LaGreca took the exam from his home using a remote testing platform. Prior to beginning the exam, LaGreca attested that he had reviewed and would abide by FINRA's Rules of Conduct, which require candidates to store all personal items outside the room where they take the exam and prohibit access to personal items, including cell phones, during the exam. Prior to beginning the exam, and again during the exam, LaGreca also informed the proctor that his cell phone was in another room. However, during the exam LaGreca possessed and accessed his cell phone.
The Series 7 exam is a critical qualification examination that tests knowledge necessary to function as a general securities representative. The integrity of the examination process is fundamental to ensuring that registered persons have demonstrated minimum competency. When candidates cheat on qualification exams, they may obtain registration without actually possessing the required knowledge, putting investors at risk.
LaGreca's conduct was particularly egregious because he not only violated the rules by having his cell phone accessible during the exam, but he also lied about it multiple times - attesting to the rules of conduct before the exam and telling the proctor during the exam that his phone was in another room when it was actually with him. This demonstrates dishonesty in addition to the exam violation.
The 18-month suspension reflects the seriousness of cheating on a qualification exam and the dishonesty involved. Investors should understand that qualification exams exist to ensure their financial professionals have minimum competency, and anyone who cheats on these exams is circumventing an important investor protection.