This is actually about logic and credibility, not industry experience. For your claim - that funds are investing in XXII even though they are formally restricted from doing so - to be true, one of these MUST be false:
1) The CEO of XXII lied when he said funds had approached him about investing, but were barred from doing so because it was on the OTCBB; or
2) The fund mgrs who approached the CEO of XXII and told him about their problem with investing in an OTCBB stock were lying.
My theory is that 1 and 2 are both true and your claim is false. Make sure your next response includes some mention of how these funds get around these rules. Try to draw from your vast experience when answering.