FINRA

SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER, SECTIONS 17(A)(2) AND (3) OF THE SECURITIES ACT OF 1933, ARTICLE V, SECTION 2(C) OF THE FINRA BY-LAWS, FINRA RULES 1122, 2010, 2020, AND NASD INTERPRETIVE MATERIAL 1000-1: OTTIMO FAILED TO ACCURATELY DISCLOSE ON HIS UNIFORM APPLICATION FOR SECURITIES INDUSTRY REGISTRATION OR TRANSFER (FORM U4), THE AMOUNTS AND FILING DATE OF A JUDGMENT. OTTIMO FAILED TO DISCLOSE OR TIMELY DISCLOSE ON HIS FORM U4, LIENS, JUDGMENTS, AND AN ORGANIZATION'S BANKRUPTCY. THE LIENS, JUDGMENTS, AND THE ORGANIZATION'S BANKRUPTCY ALL CONSTITUTED MATERIAL FACTS FOR PURPOSES OF FORM U4 DISCLOSURES AND OTTIMO'S FAILURE TO DISCLOSE OR TIMELY AND ACCURATELY DISCLOSE THEM ON HIS FORM U4 WAS WILLFUL. OTTIMO WILLFULLY MADE MATERIAL MISREPRESENTATIONS OR MADE MATERIAL MISREPRESENTATIONS AND OMITTED MATERIAL FACTS IN A PRIVATE PLACEMENT MEMORANDUM (PPM). OTTIMO CREATED A SPECIAL PURPOSE VEHICLE TO PURCHASE SHARES OF SOCIAL MEDIA COMPANIES, NAMELY FACEBOOK, PRIOR TO THE INITIAL PUBLIC OFFERINGS OF SUCH COMPANIES. THE SPECIAL PURPOSE VEHICLE SOLD SHARES TO MEMBER FIRM CUSTOMERS USING MEANS OF INTERSTATE COMMERCE, INCLUDING EMAIL, UNITED STATES MAIL, ELECTRONIC TRANSFERS AND CHECKS DRAWN ON UNITED STATES BANKS. OTTIMO MADE MATERIAL MISREPRESENTATIONS AND OMITTED MATERIAL FACTS CONCERNING HIS PRIOR BUSINESS EXPERIENCE IN THE SPECIAL PURPOSE VEHICLE'S PPM. OTTIMO KNEW OR WAS RECKLESS IN NOT KNOWING, THAT THE SPECIAL PURPOSE VEHICLE'S PPM CONTAINED THESE MATERIAL MISREPRESENTATIONS AND OMISSIONS.

Decision

Bar (Permanent)

All capacities

Indefinite

3/27/2020

Monetary Penalty other than Fines

$12,730.01

The decision includes a finding that Ottimo willfully failed to disclose a material fact on a Form U4, and that under Section 3(a)(39)(F) of the Securities Exchange Act of 1934 and Article III, Section 4 of the FINRA By-Laws, this omission make him subject to a statutory disqualification with respect to association with a member.

EXTENDED HEARING PANEL DECISION RENDERED JULY 10, 2015 WHEREIN OTTIMO WAS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. THE SANCTION WAS BASED ON FINDINGS THAT OTTIMO FRAUDULENTLY OMITTED TO DISCLOSE MATERIAL INFORMATION IN A PERSONAL BIOGRAPHY THAT WAS INCLUDED IN A PPM FOR THE SALE OF SECURITIES, IN VIOLATION OF SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER. THE FINDINGS STATED THAT OTTIMO'S BIOGRAPHY FAILED TO INCLUDE SIGNIFICANT NEGATIVE INFORMATION CONCERNING HIS PRIOR BUSINESS EXPERIENCE WITH VARIOUS COMPANIES AND THAT HIS MISCONDUCT RESULTED IN PERSONAL MONETARY GAIN. THE FINDINGS ALSO STATED THAT OTTIMO WILLFULLY FAILED TO TIMELY DISCLOSE MATERIAL INFORMATION ON HIS FORM U4, INCLUDING TAX LIENS, JUDGMENTS, AND A BANKRUPTCY FILING. ON JULY 31, 2015, OTTIMO APPEALED THE DECISION TO THE NATIONAL ADJUDICATORY COUNCIL (NAC). NAC decision rendered March 15, 2017 wherein the NAC affirmed the findings and sanction imposed by the Extended Hearing Panel decision. The NAC also ordered Ottimo to pay costs totaling $12,730.01. The bar is in effect as of March 15, 2017. On April 14, 2017, Ottimo appealed the decision to the Securities and Exchange Commission (SEC). The bar remains in effect while on appeal. SEC decision issued June 28, 2018 wherein the SEC sustained in part and reversed in part FINRA's disciplinary action. The SEC ordered that FINRA's findings that Ottimo violated FINRA Rules 1122 and 2010, NASD IM-1000-1, and Article V, Section 2(c) of FINRA's By-Laws by willfully failing to timely and accurately update his Form U4 are sustained; and ordered that FINRA's findings that omissions in Ottimo's biography in a PPM violated Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and FINRA Rules 2020 and 2010 are sustained. The SEC further ordered that FINRA's findings that omissions in Ottimo's biography regarding another PPM violated Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and FINRA Rules 2020 and 2010 are set aside; ordered that the sanctions imposed by FINRA are set aside; and further ordered that the proceeding is remanded to FINRA for reconsideration of sanctions. On 8/24/2018, Ottimo petitioned the U.S. Court of Appeals for the Second Circuit with respect to the SEC's affirmations. On 11/6/2018, the Court issued a motion to dismiss. A mandate was issued on 12/28/2108 denying the appeal. The remaining considerations remain on remand with the NAC. NAC decision rendered March 27, 2020 wherein Ottimo was barred from association with any FINRA member in all capacities and ordered to pay hearing costs totaling $11,037.51 and appeal costs totaling $1,692.50. The NAC reaffirmed the sanctions after the SEC remanded this matter back to the NAC for reconsideration. The SEC had remanded the case to the NAC to re-determine the sanctions because it had set aside a portion of the fraud findings. The bar is in effect as of the date of the NAC's decision. On April 27, 2020, Ottimo appealed the NAC decision back to the SEC. The bar remains in effect. Admin. Proc. File No. 3-17930r: SEC decision rendered June 22, 2022 wherein the sanction imposed by the NAC is sustained. The decision became final August 22, 2022.

MR. OTTIMO BELIEVES THAT THE ALLEGATIONS ARE WITHOUT MERIT AND INTENDS TO DEFEND THIS ACTION VIGOROUSLY.

UNAUTHORIZED TRADING

$20,931.50

$20,061.00

RESPONDENTS OTTIMO AND TASIN ARE HEREY JOINTLY AND SEVERALLY LIABLE AND SHALL PAY CLAIMANT THE SUM OF $20,061.0 IN COMPENSATORY DAMAGES PLUS PRE-JUDGEMENT INTEREST AT THE RATE OF 6% PER ANNUM FROM 09/11/97 TO MAY 19,1999.