Monthly Disciplinary Actions - February 2009

• An NYSE Hearing Officer found that from August 2003 through August 2005, on certain occasions, Wolverine, and/or specialists employed by the Firm, violated their respective agency obligations by failing to give precedence to orders entrusted to them. Orders were transmitted to the Floor of the AMEX electronically through the Amex New Trading Environment (ANTE) electronic options trading platform and entrusted to Wolverine, and/or its specialists, as agents. On certain occasions during the period identified above, Wolverine and/or its specialists executed transactions in options of which they were registered for accounts in which they had an interest before executing at the same price any purchase or sale in the same options for accounts in which they were entrusted as agent.

The NYSE imposed a penalty of a censure and $30,000 fine. Wolverine consented to the penalty.

In view of the above findings, the Hearing Panel imposed the penalty of a censure, a fine of $100,000, and an undertaking as follows: 

• Within 30 days from the date on which this decision becomes final, Respondent shall hire an outside consultant (the “Consultant”), not unacceptable to the NYSE, to perform a review and prepare a report (the “Report”), that – taking into consideration Respondent’s size, number of customers, business and product mix, and financial resources – contains recommendations concerning the adequacy of Respondent’s regulatory and compliance resources, including without limitation, Respondent’s controls over, procedures for, and supervision of the registration of individuals and branch offices, including the obtaining of prior consent from the appropriate self-regulatory authority for the establishment of branch offices; Respondent’s policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and the implementing regulations thereunder; and Respondent’s supervisory structure and delegation of supervisory authority. 
• Within 180 days of being retained, the Consultant shall provide Respondent’s Board of Directors and Enforcement with a copy of the Report. Respondent shall adopt and implement all policies, procedures, practices, and staffing levels recommended in the Report; provided, however, that as to any recommendation which Respondent, with the consent of its Board of Directors, determines is, in whole or in part, inappropriate, unnecessary, or unduly burdensome, Respondent may propose to the Consultant alternative policies, procedures, practices, and staffing levels that are designed to achieve the same objective or purpose as those recommended in the Report (the “Alternatives”). In the event that Respondent proposes Alternatives to the Consultant as referred to above, Respondent shall provide Enforcement with a written representation that such Alternatives have been presented to the Consultant with a description of how such Alternatives achieve the same objective or purpose as the Report’s original recommendation. In the event that the Consultant is not satisfied that such Alternatives achieve the same objective or purpose as the Report’s original recommendations, Respondent shall implement the policies, procedures, practices, and staffing levels recommended in the Report. 

Within 60 days of delivery of the Report to the Respondent’s Board of Directors, Respondent shall submit to Enforcement a written representation, signed by the Chief Executive Officer, setting forth the details of Respondent’s implementation of the recommendations contained in the Report, or the Alternatives, if agreed to by the Consultant.  The parties may agree to change any of the dates above provided that notice is given to the Hearing Officer.  The parties may agree, with the prior permission of the Hearing Officer to combine the undertaking process of this case with that of Hearing Panel Decision 06-196 as modified on review.