By Suzanne Barlyn
Sept 5 (Reuters) - Wall Street's industry-funded watchdog is
suing an exam-preparation firm, alleging that its employees took
securities industry licensing exams to share questions with the
company's customers, according to court documents.
The Financial Industry Regulatory Authority (FINRA), in a
lawsuit filed in a California federal court, alleged that
Christina Leahy, president of Training Consultants LLC, and her
three children, who work for the company, took a total of 64
FINRA exams between October, 2001 and August 2012, a "highly
A pattern that emerged from those exams suggests the Leahys
did not intend to pass the exam but rather memorize and copy
questions for their customers to use, FINRA alleged.
"I am shocked by FINRA's actions. We will vigorously defend
against these claims and look forward to clearing our good
name," said Leahy, in a statement.
The lawsuit highlights FINRA's challenges to police possible
cheating on the licensing exams it administers. The regulator,
in other instances, has disciplined securities brokers for
cheating on exams through means such as looking at a study guide
during a break, according to a review of FINRA's database of
disciplinary actions. Brokers caught cheating are typically
barred from the securities industry.
The Leahys failed 52 of the 64 exams they took - an 81
percent failure rate, according to FINRA. Their performance was
also "highly unusual" given that all of the individuals work for
a test preparation company and failed some exams multiple times,
according to the complaint, filed on Aug. 28.
Training Consultants has provided test preparation services
to the securities industry for more than 33 years, Leahy said.
Leahy also served as a volunteer on a FINRA exam writing
committee for 20 years, she said.
FINRA also alleged that the Leahys are violating the
copyright for its test questions and asked the court for an
order to temporarily stop their alleged conduct while the case
proceeds. A hearing on the request is set for Sept. 17.
A FINRA spokeswoman declined to comment.
The lawsuit was reported earlier by Courthouse News Service.
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