Eric Carl Willer, of Dallas, Texas, a stockbroker formerly registered with Fusion Analytics Securities LLC, has been suspended for nine months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that he provided unsuitable investment recommendations to customers regarding bond offerings while he was associated with Fusion Analytics Securities. Letter of Acceptance, Waiver, and Consent No. 2018059545603 (December 3, 2021).
According to the AWC, Willer was hired by Promotors 1 and 2 to sell bonds in Offering 1. The AWC states that the bond issuer was a subsidiary of a company that SEC sanctioned in 2013 for unregistered offerings. Promoter 1 was the parent company’s president and a manager of the issuer.
FINRA states that the purpose of Offering 1 was to raise money for a power plant. The regulator indicated that the power plant’s revenue was the only source of revenue to finance payments to bondholders. FINRA notes that Offering 2 was also intended to finance the power plant.
The AWC shows that there was no investigation undertaken by Willer into the issuer’s management aside from his review of the documents provided to him by Promoters 1 and 2 and the issuer. Offering documents distributed to prospective investors by Willer contained misrepresentations.
FINRA notes that the private placement memorandum claimed that there were four revenue sources that would collectively produce 75 percent of the revenue required to make payments on the bonds. The regulator states that Willer was cognizant of revenue only coming by way of a constructed power plant and that there were no assurances of these revenue sources. The PPM claimed that $3,821,247.00 in revenue would be generated in 2017 by the issuer; however, Willer had documents that showed that the management of the issuer did not anticipate producing revenue until the following year.
The PPM also contained a summary document that concerned revenue projections for 2017. Statements in this summary document referred to revenue assurances, performance assurances, and construction assurances. But those projections were not consistent with the management’s own projections.
FINRA also states that the PPM and summary omitted that Promoter 1 had been sanctioned by SEC for allegedly using misleading offering documents. The offering documents concealed that only $1,310,000.00 of the required $6,000,000.00 had been raised by Offering 1 before it was terminated. There was no mention of the issuer having breached debt covenants in loan documents pertaining to Offering 1.
FINRA states that 13 prospective investors were advised by Willer to invest in the offerings despite there being misrepresentations riddled throughout the documents and despite Willer failing to perform due diligence on both the offerings and the management of the issuer. Willer failed to have an adequate basis for concluding that these investments were suitable, violating FINRA Rules 2010 and 2111. FINRA also states that Willer violated FINRA Rule 2010 by misrepresenting and omitting information relating to the bond offerings.
Willer’s registration with Fusion Analytics has been terminated on June 15, 2020.