Michael James Conte (also known as Mike James Conte) of Coral Springs Florida the CEO of Fusion Analytics Investment Partners (FAIP) and Fusion Analytics Holdings LLC (the holding company of Fusion Analytics Securities LLC) has been charged along with FAIP and Fusion Holdings by Securities and Exchange Commission (SEC) in a Complaint for Injunctive and Other Relief supported by accusations of Conte and his companies engaging in federal securities violations relating to the sale of promissory notes to investors. Securities and Exchange Commission v. Fusion Analytics Investment Partners et al. Civil Action No. 0:21-cv-61721-BB (August 17, 2021).
According to the Complaint, between 2010 and 2016, Conte and FAIP accumulated $1,400,000.00 from ten investors through the sale of promissory notes. SEC alleges that most of the customers were elderly and retired. Conte allegedly concealed information about the bad financial condition of FAIP when the promissory notes were effected. He purportedly misrepresented the safety and profitability of the issuer, leading investors to believe that the notes were appropriate investments.
SEC argues that investors were not repaid as required under the terms of the promissory notes because of the deteriorating financial condition of FAIP. The regulator contends that from 2013 to 2018, the terms of the notes were renegotiated. $850,000.00 in promissory notes were reportedly reissued. But there was no point in which Conte and FAIP identified that the issuer continued to suffer financially. Conte and FAIP defaulted on most of the notes. Two investors are still owed $246,000.00, according to the regulator.
The Complaint alleges that Conte, FAIP and Fusion Analytics Holdings violated Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5, and Securities Act of 1933 Section 17(a). Conte and FAIP allegedly violated Investment Advisers Act of 1940 Sections 206(1) and 206(2). SEC seeks civil penalties, disgorgement, and for Conte and Fusion Analytics to be enjoined from engaging in future securities law violations.
Conte is also the subject of a FINRA investigation relating to his promissory notes transactions. FINRA Public Disclosure shows that on July 6, 2020, the regulator indicated that Conte might face disciplinary action for possibly committing fraud in the sale of securities in violation of federal securities laws and FINRA Rules 2010 and 2010. FINRA also indicated that Conte might face disciplinary action for possibly making unsuitable recommendations of a private placement in violation of FINRA Rules 2010 and 2111. He potentially failed to perform due diligence on securities to ensure that they were suitable.
FINRA mentioned on August 17, 2021, that it also may pursue disciplinary action against Conte for possibly violating FINRA Rules 2010 and 8210 because of Conte potentially providing inaccurate and misleading responses to FINRA during its investigation and for failing to testify regarding his activities.
Conte has been identified in four customer initiated investment related disputes containing allegations of his bad sales practices when he was associated with Fusion Analytics Investment Partners, Fusion Analytics Securities, Citigroup Global Markets Inc., and Morgan Stanley DW Inc. FINRA Public Disclosure shows that a customer initiated investment related FINRA securities arbitration claim concerning Conte’s conduct was settled for $28,000.00 in damages founded upon accusations of unsuitable and unauthorized trading of over-the-counter equities at Citigroup Global Markets. The claim also alleges that misrepresentations and omissions had been made regarding over-the-counter equities and that the customer was defrauded. Allegations also include violations of regulatory rules and federal securities laws.
Conte is also named in a customer initiated investment related FINRA securities arbitration claim where the customer was awarded $100,000.00 in damages based on Conte, Fusion Analytics Securities and Fusion Analytics Investment Partners being found liable on the customer’s causes of action including negligence, breach of fiduciary duty, and violation of Securities Act of Pennsylvania. FINRA Arbitration No. 16-01860 (January 16, 2018). According to the Statement of Claim, misrepresentations and omissions were made by Conte regarding Aequitas Commercial Finance Secured Subordinate Promissory Note. The claim alleges that the note was illiquid, speculative, and fraudulent.
Conte has been registered with Fusion Analytics Securities since September 18, 2017.