Michael James Conte (also known as Mike Conte) of Saint James New York the owner of Fusion Holdings—which owns Fusion Analytics Investment Partners (FAIP) and Fusion Analytics Securities LLC (FAS)—has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that he refused to testify in the regulator’s investigation concerning his alleged misrepresentations relating to bond offerings. Letter of Acceptance Waiver and Consent No. 2018059545602 (October 18, 2021).
According to the AWC, between July 7, 2021, and August 3, 2021, Conte was asked by FINRA on three occasions to testify regarding his involvement and supervision of bond offerings. These private bond offerings were the subject of FINRA’s investigation. Conte’s legal counsel informed FINRA on September 13, 2021, that there would be no testimony coming from Conte at any time. Conte violated FINRA Rules 2010 and 8210 for failing to comply.
Before the FINRA disciplinary action, Securities and Exchange Commission filed a complaint against Conte, Fusion Analytics Investment Partners LLC, and Fusion Analytics Holdings LLC. Complaint for Injunctive and Other Relief Civil Action No. 0:21-cv-61721-BB.
According to the Complaint, by 2016, Conte and his companies raised $1,400,000.00 by selling promissory notes to advisory clients and retail investors. Most of these customers were elderly and retired. When they purchased the notes, they were allegedly deprived of essential information relating to FAIP’s financial status. The investors were told that FAIP was profitable and that their notes would constitute safe investments.
SEC contends that the investors were not repaid by the issuer when the notes came due. Financial problems continued to plague FAIP, which led to the issuer’s default, according to SEC. The issuer had allegedly restructured the terms of at least six of the notes from 2013 to 2018. But the issuer still defaulted on most of those notes. And when the notes were restructured, investors were not made aware of the financial problems facing FAIP. SEC alleges that only some investors have been repaid to date.
SEC’s Complaint alleges that Conte, FAIP, and FAS violated Securities Exchange Act of 1934 Section 10(b) and SEC Rule 10b-5. The companies and Conte are also accused of violating Securities Act of 1933 Section 17(a). Conte and FAIP are additionally accused in the Complaint of violating Investment Advisers Act of 1940 Sections 206(1) and 206(2).
FINRA Public Disclosure shows that Conte has been identified in four customer initiated investment related disputes containing accusations of his wrongdoing while he was associated with Morgan Stanley, Citigroup Global Markets Inc., FAIP, and FAS. A customer initiated investment related FINRA securities arbitration claim concerning Conte’s activities was resolved for $28,000.00 in damages founded on allegations including fraud, breach of agreement, unauthorized trading, breach of fiduciary duty, misrepresentation, omissions, and unsuitable over-the-counter equities transactions at Citigroup Global Markets.
Another customer who filed an investment related FINRA securities arbitration claim has been awarded $100,000.00 in compensatory damages supported by Conte, FAIP, and FASD being liable on causes of action pertaining to Aequitas Commercial Finance Secured Subordinate Promissory Note. FINRA Arbitration No. 16-01860 (January 16, 2018). The Statement of Claim contains accusations of negligence, misrepresentation, violation of Securities Act of Pennsylvania, and breach of fiduciary duty.