The nation's largest self-regulator for the securities industry is suing Training Consultants LLC of Santa Ana because its president and three of her children allegedly took and purposely failed securities examinations so they could memorize the questions for her clients. The Financial Industry Regulatory Authority Inc. (FINRA), whose mission "is to protect America's investors by making sure the securities industry operates fairly and honestly," filed the lawsuit last month in U.S. District Court in Santa Ana.
"We take these allegations very seriously and believe the suit is completely without merit," reads a statement on the FINRA complaint on the Training Consultants LLC website. "Training Consultants is appalled at the accusations made in the suit and the reckless disregard for the integrity of our firm, our employee's personal privacy, and the significant contributions our founder has made to FINRA and its predecessors over the years."
Christina Leahy, the Training Consultants LLC president, reportedly told InvestmentNews in an e-mail, "We will vigorously defend against these claims and look forward to clearing our good name."
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She and her kids took total of 64 exams from 2001 through this past August 2012, and tanked on 52 of them, "a failure rate of over 81 percent, which is highly unusual," especially for testing trainers, according to the complaint. They were scheduled to take more tests into at least November, FINRA claims.
The regulator, which reuses some questions from test to test, seeks unspecified damages and an injunction preventing Training Consultants LLC employees from taking future tests. Judge Andrew Guilford denied FINRA's request for an immediate temporary restraining order but set a Sept. 17 preliminary injunction hearing.