The Financial Industry Regulatory Authority has penalized two financial advisors for accessing their cell phones while taking the Series 7 examination, according to recent announcements.
David Korsnack and Stephen LaGreca both recently submitted to Finra’s findings that they possessed unauthorized materials during their exams in separate Letters of Acceptance, Waiver and Consent. Neither one could be reached for comment.
Korsnack entered the industry in January 2022 when he became associated with Ameriprise. On Nov. 18 of that year, Korsnack accessed his cell phone during an “unscheduled break” from his Series 7 exam. While Korsnack was required by Finra’s rules of conduct to store all personal items in a locker provided by the test vendor, he was reported leaving the testing center during his break to retrieve his phone from his car. Furthermore, Finra asserts that Korsnack accessed materials on his phone relevant to the Series 7 exam.
Later, Finra issued a written request to Korsnack while investigating his behavior during the exam, asking him to detail his actions during his break. Korsnack’s response indicated that he had accessed his locker to look for a text message for his wife and did not access any exam materials. Finra claims these statements were false in that Korsnack retrieved his phone from his car and did indeed access information relevant to the test.
Korsnack’s allegedly false and misleading statements violated Finra Rule 8210, which requires candidates to provide information in writing in response to investigations, complaints and other similar proceedings.
Ameriprise terminated its relationship with Korsnack on Nov. 2, 2023, according to a form U5 notifying Finra dated Nov. 13, 2023.
Korsnack consented to a bar from associating with any Finra member in all capacities, sometimes called an industry bar, in a letter accepted yesterday by Finra.
LaGreca was associated with Morgan Stanley as a non-registered representative beginning in June 2022. On December 18 of that year, while taking the Series 7 examination from his home, LaGreca agreed to abide by Finra’s rules of conduct, which requires that candidates store all personal items outside the room where they take their exams, informing the exam proctor that his cell phone was in another room. According to Finra, LaGreca possessed and accessed his phone during the exam.
Morgan Stanley filed a form U5 to terminate LaGreca’s employment on Feb. 16 of this year.
LaGreca consented to an 18-month industry bar and a $5,000 fine in a letter accepted by Finra on Nov. 28.
Possessing unauthorized materials is a violation of Finra rules 1210.05 and 2010. The first of these holds exam candidates to rules of conduct that include a proscription on the use of unauthorized materials. Rule 2010 requires that associated persons “observe high standards of commercial honor and just and equitable principles of trade.”