FINRA has barred Ottimo from the securities industry and has also barred the firm’s former president, Thomas Giugliano from acting in a principal capacity.
Giugliano has also been suspended from the securities industry for one year and is slapped with US$150,000 fine.
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Further, FINRA has accused EKN of violating numerous NASD/FINRA and SEC rules and federal securities laws, including anti-money laundering (AML) violations, net capital deficiencies and widespread reporting failures through Ottimo and Giugliano.
According to FINRA, from 2008 through 2011, Ottimo acted in a supervisory role despite an SEC order that barred him from associating with any broker or dealer in a supervisory capacity, and acted as CEO despite not being registered as a principal.
And during the relevant period, EKN and Giugliano had repeatedly misrepresented to FINRA that Ottimo was no longer acting as EKN’s CEO, as a principal or as a supervisor.
FINRA’s investigation, on the contrary, revealed that EKN’s own documents indicated that from 2008 through 2011, Ottimo was listed as EKN’s CEO and was operating in that capacity and as the CEO, Ottimo supervised other EKN personnel, negotiated and executed agreements, controlled its finances, retained signatory authority over its bank accounts, and represented himself as EKN’s CEO to its clearing firm and other third parties.
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By GlobalDataBrad Bennett, FINRA executive vice president and chief of enforcement, said: "EKN, Ottimo and Giugliano’s defiance of an SEC order and subsequent lies to regulators were nothing short of brazen. In addition to hiding the fact from regulators that Ottimo was acting as CEO, the firm was also fully aware they had significant AML problems and net capital deficiencies, yet completely ignored any sense of responsibility to follow securities rules and laws."
In settling this matter, EKN, Ottimo and Giugliano had neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
