Needham & Company, Llc

Allegations: NEEDHAM & COMPANY, INC., FAILED TO COMPLY WITH THE FOLLOWING RULES: EXCHANGE ACT RULE 11AC1-1 ("SEC FIRM QUOTE RULE"), NASD MARKETPLACE RULE 4613(B)("NASD FIRM QUOTE RULE"), NASD TRADE-OR-MOVE RULE, NASD MARKETPLACE RULE 4613(E)(1)(C), AND SEC RULE 11AC1-4 (THE "LIMIT ORDER DISPLAY RULE"). Status: Final Sanction Detail: NEEDHAM & COMPANY, INC., FINED $67500 CASE # CMS020104 Summary: ON JUNE 11, 2002 NEEDHAM & COMPANY ("NEED") WAS NOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT ("AWC") IT SUBMITTED WAS ACCEPTED BY NASD REGULATIONS OFFICE OF DISCIPLINARY AFFAIRS AND THE NATIONAL ADJUDICATORY COUNCIL. NEED ACCEPTS AND CONSENTED TO THE ENTRY OF FINDINGS, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THAT THE FIRM FAILED TO COMPLY WITH THE FOLLOWING RULES: EXCHANGE ACT RULE 11AC1-1 ("SEC FIRM QUOTE RULE"), NASD MARKETPLACE RULE 4613(B)("NASD FIRM QUOTE RULE"), NASD TRADE-OR-MOVE RULE, NASD MARKETPLACE RULE 4613(E)(1)(C), AND SEC RULE 11AC1-4 (THE "LIMIT ORDER DISPLAY RULE"). IT WAS ALSO DETERMINED THAT THE FIRM DID NOT PROVIDE FOR SUPERVISION REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH RESPECT TO THE APPLIACABLE SECURITIES LAWS AND REGULATIONS CONCERNING EXCHANGE ACT RULE 11AC1-1 ("SEC FIRM QUOTE RULE")AND NASD MARKETPLACE RULE 4613(B)("NASD FIRM QUOTE RULE")

Allegations: THE FIRM REPORTED TO OATS 50 EXECUTION REPORTS THAT CONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTED DATA. IN 63 INSTANCES WHEN THE FIRM ACTED AS PRINCIPAL FOR ITS OWN ACCOUNT, THE FIRM FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS THAT IT WAS A MARKET MAKER IN EACH SECURITY. THE FIRM FAILED IN 28 INSTANCES TO PROVIDE WITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER ITS CORRECT CAPACITY IN THE TRANSACTION. THE FIRM FAILED IN 11 INSTANCES TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THAT THE TRANSACTION WAS EXECUTED AT AN AVERAGE PRICE. Status: Final Sanction Detail: A CENSURE AND TOTAL FINE OF $7500 WHICH INCLUDES A $5,000 FINE FOR OATS VIOLATIONS AND A $2500 FINE FOR THE VIOLATIONS OF SEC RULE 10B-10. Summary: LETTER OF AWC NO 20050009820-01.ON JUNE 26,2007, NEEDHAM & COMPANY,LLC WAS NOTIFIED THAT THE AWC IT SUBMITTED WAS ACCEPTED BY NASD REGULATION INC DEPT OF ENFORCEMENT AND THE NATIONAL ADJUDICATORY COUNCIL. THE AWC ALLEGES THAT THE FOLLOWING VIOLAIONS OCCURED: NEED REPORTED TO OATS 50 EXECUTION REPORTS THAT CONTAINED INACCURATE, INCOMPLETE OR IMPROPERLY FORMATTED DATA. NEED SUBMITTED INCORRECT CAPACITY, EXCEPTION AND MEMBER TYPE CODES, ACCOUNT TYPE CODES, CANCELLATION TIMES AND CANCEL/REPLACE AMOUNTS. NEED ALSO SUBMITTED ACT REPORTS THAT FAILED TO MATCH OR LINK IN OATS. THE ABOVE CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF NASD RULE 6955(A). IN 63 INSTANCES WHEN NEED ACTED AS PRINCIPAL FOR ITS OWN ACCOUNT, THE FIRM FAILED TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMER THAT IT WAS A MARKET MAKER AND ALSO FAILED IN 28 INSTANCES TO PROVIDE NTOIFICATION DISCLOSING ITS CORRECT CAPACITY. NEED FAILED IN 11 INSTANCES TO PROVIDE WRITTEN NOTIFICATION TO CUSTOMER THAT THE TRANSACTION WAS EXECUTED AT AN AVERAGE PRICE. THIS CONSTITUTES SEPARATE AND DISTINCT VIOLATION OF SEC RULE 10B-10. THE FIRM WAS CENSURED AND FINED $7,500.

Allegations: NEEDHAM WAS ALLEGED TO HAVE VIOLATED SECTION 17(B) OF THE SECURITIES ACT BY RECEIVING PAYMENTS FROM UNDERWRITERS FOR PUBLISHING RESEARCH REPORTS ON FOUR OCCASIONS DURING 1999, 2000 AND 2001 THAT DESCRIBED CERTAIN SECURITIES WITHOUT DISCLOSING SUCH RECEIPT OR THE AMOUNTS OF SUCH PAYMENTS AND SECTION 17(A)(1) AND RULE 17A-4 OF THE SECURITIES EXCHANGE ACT BY FAILING TO PRESERVE BUSINESS-RELATED INTERNAL E-MAIL FOR THREE YEARS. Status: Final Sanction Detail: PAID FINE OF $700,000 Summary: NEEDHAM AGREED TO A THE ENTRY OF AN ORDER PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTIONS 15(B)(4) AND 21C OF THE SECURITIES EXCHANGE ACT OF 1934 UNDER WHICH IT WAS FOUND TO HAVE WILLFULLY VIOLATED SECTION 17(B) OF THE SECURITIES ACT BY RECEIVING PAYMENTS FROM UNDERWRITERS FOR PUBLISHING RESEARCH REPORTS ON FOUR OCCASIONS DURING 1999, 2000 AND 2001 THAT DESCRIBED CERTAIN SECURITIES WITHOUT DISCLOSING SUCH RECEIPT OR THE AMOUNTS OF SUCH PAYMENTS AND SECTION 17(A)(1) AND RULE 17A-4 OF THE SECURITIES EXCHANGE ACT BY FAILING TO PRESERVE BUSINESS-RELATED INTERNAL E-MAIL FOR THREE YEARS.

Allegations: BETWEEN OCTOBER 2, 2000 AND OCTOBER 31, 2000, NEEDHAM FAILED TO CONTEMPORANEOUSLY OR PARTIALLY EXECUTE SEVEN CUSTOMER LIMIT ORDERS IN SIX NASDAQ SECURITIES AFTER IT TRADED EACH SUBJECT SECURITY FOR ITS OWN MARKET MAKING ACCOUNT AT AS PRICE THAT WOULD HAVE SATISFIED EACH CUSTOMER'S LIMIT ORDER. ALSO IN OCTOBER 2000, NEEDHAM FAILED TO IMMEDIATELY REFLECT NINE RETAIL CUSTOMERS' LIMIT ORDERS IN ITS QUOTATIONS. Status: Final Sanction Detail: FINED $32,500

Allegations: THE FIRM FAILED TO COMPLY WITH NASD INTERPRETATION IM-2110-4 Status: Final Sanction Detail: FINE OF $80,000.00 PAID 8/13/02 Summary: LETTER OF ACCEPTANCE WAIVER AND CONSENT NO. CMS020131 AWC. ON JULY 30, 2002, NEEDHAM & COMPANY ("NEED") WAS NOTIFIED THAT THE AWC IT SUBMITTED WAS ACCEPTED BY THE NASD REGULATION OFFICE OF DISCIPLINARY AFFAIRS AND THE NATIONAL ADJUDICATORY COUNCIL. THE AWC ALLEGES THAT NEED TRADED AHEAD OF A RESEARCH REPORT ISSUED ON 10/26/98. BY TRADING AHEAD OF THE ISSUANCE OF THE RESEARCH REPORT, NEED VIOLATED NASD CONDUCT RULE 2110 AND IM-2110-4. FOLLOWING A THOROUGH INVESTIGATION OF NEED'S RESEARCH AND TRADING ACTIVITIES, NASD DETERMINED THAT NEED'S VIOLATION WAS AN ISOLATED INCIDENT.

Allegations: VIOLATED NASD CONDUCT RULE 2110, 2320, AND IM-2110-2 Status: Final Sanction Detail: FINED $65,000 Summary: ON DECEMBER 10, 2002 THE FIRM WAS NOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT ("AWC") IT SUBMITTED WAS ACCEPTED BY NASDR OFFICE OF DISCIPLINARY AFFAIRS AND THE NATIONAL ADJUDICATORY COUNCIL. THE FIRM ACCEPTS AND CONSENTS TO THE ENTRY OF FINDINGS, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, THAT THE FIRM FAILED TO COMPLY WITH THE FOLLOWING RULES: NASD CONDUCT RULE 2110, 2320, AND 3010(B), IM-2110-2, SEC RULE 11AC1-4

Allegations: FROM NOVEMBER 10 THROUGH NOVEMBER 21, 2003 THE FIRM TRANSMITTED TO OATS 11 REPORTS THAT CONTAINED INACCURATE, INCOMPLETE, OR IMPROPERLY FORMATTED DATA. THE FIRM ALSO FAILED ON 10 OCCASIONS TO PROVIDE WRITTEN NOTIFICATION DISCLOSING TO ITS CUSTOMERS ITS CORRECT CAPACITY FOR THE TRANSACTION Status: Final Sanction Detail: TOTAL AMOUNT OF FINE IS $8,000.00. $5,000 FOR OATS VIOLATIONS AND $3,000 FOR 10B-10 VIOLATIONS

Allegations: WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, NEEDHAM CONSENTED TO THE ENTRY OF FINDINGS THAT THE FIRMS ADVERTISED VOLUME IN THREE SECURITIES FOR ONE MONTH EXCEEDED ITS EXECUTED VOLUME IN THE SAME SECURITIES, AND THAT THE FIRM FAILED ADEQUATELY TO SUPERVISE ITS ACTIVITIES IN MAKING SUCH ADVERTISEMENTS. Status: Final Sanction Detail: FINE OF $200,000 LEVIED AGAINST APPLICANT. PAID ON 1/2/08 Summary: FINAL DISPOSITION

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND THE ENTRY OF FINDINGS THAT IT FAILED TO ADOPT AND IMPLEMENT ADEQUATE WRITTEN SUPERVISORY PROCEDURES (WSPS) GOVERNING ANALYST INVOLVEMENT IN INVESTMENT BANKING SOLICITATIONS AND OFFERS OF FAVORABLE RESEARCH. THE FINDINGS STATED THAT THE FIRM ALLOWED ITS EQUITY RESEARCH ANALYST TO PARTICIPATE IN EFFORTS TO SOLICIT THE FIRM'S PARTICIPATION IN A PROPOSED INITIAL PUBLIC OFFERING BY A COMPANY AND THAT THE FIRM'S RESEARCH ANALYST'S AND INVESTMENT BANKERS' PRESENTATIONS TO THE COMPANY IN CONNECTION WITH ITS EFFORTS EXPRESSED POSITIVE VIEWS AND OTHER STATEMENTS THAT IMPLIED FAVORABLE RESEARCH COVERAGE. THE COMPANY DID NOT PROCEED WITH THE OFFERING. THE FIRM ALSO FAILED TO ADOPT AND IMPLEMENT WSPS REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH NASD RULE 2711. THE FINDINGS INCLUDED THAT THE FIRM OMITTED NUMEROUS REQUIRED DISCLOSURES FROM RESEARCH REPORTS OR FAILED TO DIRECT READERS IN A CLEAR MANNER TO REQUIRED DISCLOSURES. THE FIRM SAMPLED RESEARCH REPORTS MONTHLY TO DETERMINE WHETHER THE REPORTS CONTAINED ALL OF THE DISCLOSURES REQUIRED BY NASD RULE 2711(H). HOWEVER, FINRA DETERMINED THAT THE SIZE OF THE REVIEW WAS NOT REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH RULE 2711(H) DISCLOSURE REQUIREMENTS. Status: Final Sanction Detail: THE FIRM WAS CENSURED AND FINED $2,500,000.00 Summary: THE FIRM WAS CENSURED AND FINED $2,500,000.00

Allegations: 10/08/1999JJM--RESPONDENT MEMBER ENGAGED IN A SERIES OF SALES OF SHARES IN INITIAL PUBLIC OFFERINGS, WHICH TRADED AT A PREMIUM IN THE SECONDARY MARKET (HOT ISSUE), TO ACCOUNTS OF INVESTMENT PARTNERSHIPS OR CORPORATIONS, INCLUDING BUT NOT LIMITED TO HEDGE FUNDS, INVESTMENT CLUBS, AND OTHER LIKE ACCOUNTS, WITHOUT OBTAINING PROPER ASSURANCES IN WRITING THAT SUCH PURCHASES WOULD BE MADE TO FILL ORDERS FOR BONA FIDE PUBLIC CUSTOMERS OR WOULD BE MADE TO UNRESTRICTED PERSONS OR ACCOUNTS IN CONTRAVENTION OF SECTION (F)(1)OF IM-2110-1, THE FREE RIDING AND WITHOLDING INTERPRETATION, (NASD RULE 2110) Status: Final Sanction Detail: $5,000.00 FINE Summary: NONE

Allegations: NEEDHAM & COMPANY FAILED TO EXECUTE CUSTOMER LIMIT ORDERS AFTER EXECUTING TRANSACTIONS FOR ITS OWN MARKET MAKING ACCOUNT AT PRICES EQUAL TO OR BETTER THAN EACH CUSTOMER LIMIT ORDER. NEEDHAM ALSO FAILED TO ASCERTAIN THE BEST INTER DEALER MARKET IN SECURITIES SO THAT THE RESULTING PRICE WAS AS FAVORABLE AS POSSIBLE TO THE CLIENT AND WHEN NEEDHAM ACTED AS PRINCIPAL FOR ITS OWN ACCOUNT, NEEDHAM FAILED TO PROVIDE WRITTEN NOTIFICATION THAT REPORTED PRICE TO CUSTOMER WAS AN AVERAGE PRICE OF TRADES REPORTED TO ACT. Status: Final Sanction Detail: $12,000 FINE PAID 10/21/98 NEEDHAM ALSO PROVIDED RESTITUTION PLUS INTEREST TO ITS CUSTOMERS WHO DID NOT RECEIVE BEST EXECUTION. Summary: LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. CMS980076 AWC. ON AUGUST 28, 1998, NEEDHAM & COMPANY, INC (NEED)WAS NOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) IT SUBMITTED WAS ACCEPTED BY NASD REGULATION, INC DEPARTMENT OF ENFORCE AND THE NATIONAL ADJUDICATORY COUNCIL. THE AWC ALLEGES THAT THE FOLLOWING VIOLATIONS OCCURED: NEED FAILED TO CONTEMPORANEOUSLY EXECUTE FIVE CUSTOMER LIMIT ORDERS AFTER EXECUTING TRANSACTIONS FOR ITS OWN MARKET MAKING ACCOUNT AT PRICES EQUAL TO OR BETTER THAT EACH SUCH CUSTOMER LIMIT ORDER. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF NASD CONDUCT RULE 211O AND IM-2110-2. NEED FAILED TO USE REASONABLE DILIGENCE TO ASCERTAIN THE BEST INTER DEALER MARKET AND FAILED TO BUY OR SELL IN SUCH MARKET SO THAT THE RESULTANT PRICE TO THE CUSTOMER WAS AS FAVORABLE AS POSSIBLE UNDER PREVAILING MARKET CONDITIONS IN TEN INSTANCES. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OD NASD CONDUCT RULES 2110 AND 2320. ON SIX OCCASIONS WHEN IT ACTED AS PRINCIAPL FOR ITS OWN ACCOUNT, NEED FAILED TO PROVIDE WRITTEN NOTIFICATION TO THE CUSTOMER THAT THE PRICE TO THE CUSTOMER WAS AN AVERGAE OF THE TRADE PRICES REPORTED BY NEED TO ACT. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF SEC RULE 10B-10. NEED FAILED TO ESTABLISH, MAINTAIN AND ENFORCE WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS,AND WITH THE RULES OF THE ASSOCIATION REGARDING TRADE REPORTING, SEC ORDER EXECUTION RULES, BEST EXECUTION, ANTI-COMPETITIVE PRACTICES AND SOES. THIS CONDUCT CONSTITUTES A VIOLATION OF NASD CONDUCT RULES 2110 AND 3010. NEED WAS CENSURED AND FINED $12,000. NEED WILL ALSO PROVIDE RESTITUTION PLUS INTEREST TO THOSE CUSTOMERS WHO DID NOT RECEIVE BEST EXECUTION.****** $12,000 PAID ON 10/21/98, INVOICE NO. 98-MS-797 ***

Allegations: NEEDHAM ALLEGEDLY VIOLATED SEC RULE 11AC-1 "FIRM QUOTE RULE" AND FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE WRITTEN SUPERVISORY PROCEDURES. Status: Final Sanction Detail: PAID $15,000 FINE ON 10/01/97 Summary: LETTER OF ACCEPTANCE WAIVER CONSENT NO. CMS970015 AWC. ON AUGUST 22, 1997, NEEDHAM & COMAPNY, INC (NEED) WAS NOTIFIED THAT THE LETTER OF ACCEPTANCE, WAIVER AND CONSENT (AWC) IT SUBMITTED WAS ACCEPTED BY THE MARKET REGULATION AND THE NATIONAL BUSINESS CONDUCT COMMITTEES. THE AWC ALLEGES THAT NEED VIOLATED SEC RULE 11AC-1 (SEC FIRM QUOTE RULE), NASD CONDUCT RULES 2110, 3010 AND 3320 AND MARKETPLACE RULE 4613(B) FOR THE FOLLOWING ACTIVITY: NEED FAILED TO EXECUTE 15 ORDERS WHICH WERE PRESENTED TO NEED AT NEED'S PUBLISHED BID OR PUBLISHED OFFER AND, THERFORE, FAILED TO HONOR ITS PUBLISHED QUOTATION. INA ADDITION, NEED FAILED TO ESTABLISH MAINTAIN AND ENFORCE WRITTEN SUPERVISORY PROCEDURES TO ENSURE COMPLIANCE WITH THE ABOVE RULES. NEED WAS CENSURED AND FINED $15,000. ******* $15,000 PAID ON 10/1/97 INVOICE NO. 97-MS-832 *******

Allegations: NEEDHAM ALLEGEDLY VIOLATED SEC RULE 11AC-1 "FIRM QUOTE RULE" Status: Final Sanction Detail: NEEDHAM FINED $1,000 PAID ON 10/01/97 Summary: LETTER OF ACCEPTANCE, WAIVER & CONSENT (AWC) NO. CMS960013 AWC. ON AUGUST 22, 1997, NEEDHAM & COMPANY, INC (NEED) WAS NOTIFIED THAT THE AWC IT SUBMITTED WAS ACCEPTED BY THE MARKET REGULATION ANF THE NATIONAL BUSINESS CONDUCT COMMITTEES. THE AWC ALLEGES THAT NEED VIOLATED SEC RULE 11AC1-1 (SEC FIRM QUOTE RULE), NASD CONDUCT RULE 3320 AND MARKETPLACE RULE 4613(B) FOR THE FOLLOWING ACTIVITY: NEED FAILED TO EXECUTE AN ORDER WHICH WAS PRESENTED TO NEED AT NEED'S PUBLISHED BID OR PUBLISHED OFFER AND, THEREFORE, FAILED TO HONOR ITS PUBLISHED QUOTATION. NEED WAS FINED $1,000.******* $1000 PAID ON 10/1/1997, INVOICE NO. 97-MS-828 *****

Allegations: NEEDHAM ALLEGEDLY VIOLATED MARKETPLACE RULE 4613(E) FOR ENTERING AND MAINTAINING QUOTATIONS THAT CAUSED A LOCKED AND/OR CROSSED MARKET CONDITION TO OCCUR ON FOUR SECURITIES Status: Final Sanction Detail: NEEDHAM FINED $7,000. REQUIRED TO CONDUCT A RULE EDUCATION CLASS FOR ITS TRADERS. FINE PAID 6/12/97 Summary: LETTER OF ACCEPTANCE, WAIVER & CONSENT NO. CMS960210(A) AWC. ON APRIL 23, 1997, NEEDHAM & COMPANY, INC. (NEED) WAS NOTIFIED THAT THE AWC LETTER IT SUBMITTED WAS ACCEPTED BY THE MARKET REGULATION AND THE NATIONAL BUSINESS CONDUCT COMMITTEES. THE AWC ALLEGES THAT NEED VIOLATED MARKETPLACE RULE 4613(E) FOR ENTERING OR MAINTAINING QUOTATIONS IN THE NASDAQ STOCK MARKET, DURING NORMAL BUSINESS HOURS, WHICH CAUSED A LOCKED AND/OR CROSSED MARKET CONDITION TO OCCUR IN FOUR SECURITIES. NEED WAS FINED $7,000 AND REQUIRED TO CONDUCT A RULE EDUCATION CLASS FOR ITS TRADERS. ***$7,000 PAID ON 6/12/97, INVOICE #97-MS-463 ****

Allegations: ALLEGATIONS OF SALES OF SECURITES PRIOR TO THE BROKER/DEALERS REGISTRATION IN VIOLATION OF THE DISTRICT OF COLUMBI SECURITES ACT. Status: Final Sanction Detail: BY ORDER #10910 DATED FEBRUARY 28, 1997, THE OFFICE OF SECURITES OF THE DISTRICT OF COLUMBIA ACCEPTED PAYMENT OF A FINE BY NEEDHAM & COMPANY, INC #16360 IN THE SUM OF FIFTEEN THOUSAND DOLLARS ($15,000) BASED ON A FIND OF THE FACT THAT THE FIRM CONDUCTED SECURITIES TRANSACTIONS WHILE INLICENSED. IN PAYING THE FINE, THE FIRM NEITHER ADMITTED OR DENIED ANY FINDINGS OF FATC BY THE COMMISSION REGARDING THE EFFECTUATION OF SPECIFIED SECURITES TRANSACTION. Summary: FINED FOR VIOLATION OF THE DISTRICT OF COLUMBIA SECURITIES ACT, SECTION 2-2603 (A) AND (B) (1994 REPL.) CONTATC VEDA M. SHAMSID-DEEN, ACTING DIRECTOR (202) 626-5106

Allegations: ON MAY 9, 1996, NEEDHAM & COMPANY, INC. FILED AN APPLICATION FOR REGISTRATION AS A DEALER WITH THE COMMISSION. INCLUDED IN THE APPLICATION WAS DISCLOSURE THAT NEEDHAM HAD ACCOUNTS OPEN WITH 18 ALABAMA RESIDENTS, 12 OF WHICH CONSTITUTED EXEMPT TRANSACTIONS. FURTHER, THE REMAINING 6 ALABAMA RESIDNETS HAD A TOTAL OF 14 TRANSACTIONS IN THEIR ACCOUNTS PRIOR TO THE APPLICATION FOR REGISTRATION. NEEDHAM WAS REQUIRED TO MAKE RESCISSION OFFERS, WHICH RESULTED IN 4 NOT RESPONDING. I OFFER BEING RETURNED AS UNCLAIMED, AND 1 BEING ACCEPTED. HOWEVER, THE 1 ACCEPTING THE OFFER DID NOT RESULT IN NAY PAYMENT TO THE INVESTOR DUE TO ALL TRANSACTIONS RESULTING IN GAINS AND NO COMMISSIONS BEING CHARGED. Status: Final Sanction Detail: INASMUCH AS NEEDHAM EFFECTED TRANSACTIONS PRIOR TO REGISTRATION, A VIOLATION OF SECTION 8-6-3(A), CODE OF ALABAMA 1975, A CONSENT AGREEMENT WAS ENTERED. NEEDHAM WAS LEVIED AN ADMINISTRATIVE ASSESSMENT OF $1000 AND INVESTIGATIVE COSTS OF $500. THE APPLICATION FOR REGISTRATION AS A DEALER WAS PROCESSED, Summary: SAME AS ALLEGATIONS CONTACT:ALABAMA SECURITES COMMISSION (334)242-2984

Allegations: DURING THE PERIOD JULY 1, 2019 THROUGH APRIL 6, 2020 (THE "REVIEW PERIOD"), THE FIRM VIOLATED NASDAQ RULE 4613(A), AND DURING THE PERIOD JULY 1, 2019 THROUGH MARCH 24, 2021 (THE "SUPERVISORY REVIEW PERIOD"), THE FIRM VIOLATED NASDAQ RULES 3010 AND 2010A (FOR CONDUCT BEFORE DECEMBER 6, 2019), AND NASDAQ RULES GENERAL 9, SECTION 20 AND GENERAL 9, SECTION 1(A) (FOR CONDUCT ON OR AFTER DECEMBER 6, 2019). Status: Final Sanction Detail: THE FIRM CONSENTS TO THE IMPOSITION OF THE FOLLOWING SANCTIONS: 1. A CENSURE; 2. A FINE IN THE AMOUNT OF $20,000 (COMPRISED OF $12,500 FOR THE VIOLATIONS OF NASDAQ RULE 4613(A) AND $7,500 FOR THE VIOLATIONS OF NASDAQ RULES 2010A, 3010, GENERAL 9, SECTION 20 AND GENERAL 9, SECTION 1(A)). Summary: DURING THE REVIEW PERIOD, THE FIRM IN 121 INSTANCES3 FAILED TO MAINTAIN A CONTINUOUS TWO-SIDED TRADING INTEREST DURING REGULAR MARKET HOURS AT PRICES WITHIN CERTAIN PERCENTAGES AWAY FROM THE NBBO. IN ALL 121 INSTANCES, THE FIRM FAILED TO MAINTAIN A QUOTE FOR THE ENTIRE MARKET HOURS. THE VIOLATIONS OCCURRED BECAUSE THE FIRM FAILED TO TAKE A NECESSARY STEP WHEN ADDING NEW SECURITIES TO ITS VENDOR'S ORDER MANAGEMENT SYSTEM. THE FIRM'S FAILURE TO TAKE THIS STEP RESULTED IN THE VENDOR NOT MAINTAINING QUOTES BY THE FIRM IN THE SECURITIES IN WHICH IT WAS REGISTERED AS A MARKET MAKER. THE CONDUCT DESCRIBED IN THIS PARAGRAPH CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF NASDAQ RULE 4613(A). DURING THE SUPERVISORY REVIEW PERIOD, THE FIRM'S SUPERVISORY SYSTEM WAS NOT REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH NASDAQ QUOTING OBLIGATIONS. SPECIFICALLY, UNTIL APRIL 4, 2020, THE FIRM'S WRITTEN SUPERVISORY PROCEDURES DID NOT ADDRESS THE SUPERVISORY STEPS AND REVIEWS TO BE TAKEN BY THE APPROPRIATE SUPERVISOR AND THE FIRM USED A DEFICIENT REPORT TO CONDUCT ITS SUPERVISORY REVIEWS. FOR THE REMAINDER OF THE SUPERVISORY REVIEW PERIOD, THE FIRM'S WRITTEN SUPERVISORY PROCEDURES DID NOT SUFFICIENTLY DESCRIBE THE SUPERVISORY STEPS AND REVIEWS TO BE TAKEN BY THE APPROPRIATE SUPERVISOR OR HOW SUCH REVIEWS SHALL BE DOCUMENTED. THE CONDUCT DESCRIBED IN THIS PARAGRAPH CONSTITUTES A VIOLATION OF NASDAQ RULES 2010A AND 3010 (BEFORE DECEMBER 6, 2019), AND NASDAQ RULES GENERAL 9, SECTION 20 AND GENERAL 9,SECTION 1(A) (ON OR AFTER DECEMBER 6, 2019).

Allegations: THAT BETWEEN JUNE 1, 1997 AND DECEMBER 31, 1997 NEEDHAM & COMPANY, INC. (NEED) HAD SEVEN INCIDENTS IN WHICH NEED INITIATED A LOCKED OR CROSSED MARKET. Status: Final Sanction Detail: AWC NO. CMS000186 $5,000 FINE Summary: LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. CMS000186AWC. ON AUGUST 21, 2000, NEEDHAM & COMPANY (NEED)WAS NOTIFIED THAT THE AWC IT SUBMITTED WAS ACCEPTED BY THE NASD REGULATION, INC'S OFFICE OF DISCIPLINARY AFFAIRS AND THE NATIONAL ADJUDICATORY COUNCIL. THE AWC ALLEGES THAT THE FOLLOWING VIOLATION OCCURED: IN SIX INSTANCES FROM JUNE 13, 1997 THROUGH DECEMBER 18, 1997, NEED, WITHOUT MAKING REASONABLE EFFORTS TO AVOID A LOCKED OR CROSSED MARKET BY EXECUTING TRANSACTIONS WITH ALL MARKET MAKERS WHOSE QUOTATIONS WOULD BE LOCKED OR CROSSED, ENETERED A BID OR ASKED QUOTATION IN THE NASDAQ STOCK MARKET WHICH CAUSED A LOCKED OR CROSSED MARKET CONDITION TO OCCUR IN EACH CONDITION. THIS CONDUCT CONSTITUTES SEPARATE AND DISTINCT VIOLATIONS OF NASD MARKETPLACE RULE 4613(E). NEEDHAM WAS FINED $5,000.00

Allegations: NASD RULE 3110, AND SEC RULES 17A-3, 17A-4 AND 11AC14 - FAILED TO CONTEMPORANEOUSLY EXECUTE OR PARTIALLY EXECUTE A CUSTOMER LIMIT ORDER AFTER TRADING IN THE SAME SECURITY FOR ITS OWN ACCOUNT AT PRICES THAT WOULD HAVE SATISFIOED THE CUSTOMER LIMIT ORDER; FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN WHEN EACH SUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED ITS BID OR OFFER IN EACH SUCH SECURITY, OR WHEN THE FULL SIZE OF EACH SUCH ORDER WAS PRICED EQUAL TO THE FIRMS BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACH SUCH SECURITY, AND REPRESENTED MORE THAN A DE MINIMIS CHARGE IN RELATION TO THE SIZE ASSOCIATED WITH ITS BID OR OFFER IN EACH SUCH SECURITY; FAILED TO PROVIDE WRIITEN NOTIFICATION TO A CUSTOMER DISCLOSING WHETHER IT WAS ACTING AS AGENT FOR SUCH CUSTOMER, AS AGENT FOR SOME OTHER PERSON, AS AGENT FOR BOTH SUCH CUSTOMER AND SOME OTHER PERSON OR AS PRINCIAPL FOR ITS OWN ACCOUNT;AND MARKET ORDER AND LIMIT ORDER VIOLATIONS. Status: Final Sanction Detail: FINED $9,500: PAID 9/23/99 Summary: FINE PAID 9/23/99 $9,500, INVOICE #99-MS-786