Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.
Strasbourger, Pearson, Tulcin,Wolff, Inc. and Michael J. Schumacher (Principal)

The firm failed to 

  • provide for appropriate procedures and controls and an appropriate system of follow-up and review with respect to its obligations to provide 
    • appropriate procedures for supervision of business operations on the NYSE Trading Floor;
    • adequate supervision of its sole branch office, review of options accounts by a delegated person; ensure that its operational and regulatory activities were supervised and that it had systems, procedures and staff to follow-up and review all areas of its business activities, including its anti-money laundering (AML) program, suspicious activity reporting and its branch office to ensure compliance with applicable securities regulations and NYSE rules;
  • supervise the trading activity of its president and chairman
  • ensure that electronic communications with the public were reviewed and retained; 
  • establish an AML compliance program that detected and caused the reporting of certain transactions; 
  • establish and implement policies, procedures and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and the implementing regulations thereunder; 
  • provide for independent testing for compliance; and designate adequate and trained staff to ensure compliance with the Bank Secrecy Act;
  • document error accounts trades that a floor broker made;
  • deliver original or updated options disclosure document prior to newly approved customers or previously approved options accounts;
  • properly record all revenue and expenses on an accrual basis
  • maintain minimum net capital compliance; and
  • implement adequate best execution procedures and conduct a formal analysis of best execution data. 

The Firm 

  • employed independent contractors without adequately complying with NYSE regulations;
  • handled options accounts activity in violation of NYSE regulations; and 
  • failed to comply with the firm element of the continuing education rule

Schumacher failed to 

  • reasonably discharge his supervisory duties as president and chairman; and 
  • document error accounts trades that a floor brokermade.
Strasbourger, Pearson, Tulcin,Wolff, Inc. and Michael J. Schumacher (Principal): Censured; Fined $100,000 jt/several with Strasbourger; Required to retain an independent consultant to conduct a comprehensive review of its policies, procedures and practices to ensure compliance with federal securities laws, NYSE/NASD rules, and to make
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