The allegations read: The securities and exchange commission (the "commission"), for its complaint against conte, alleges that the commission brings this action to enjoin further violations of the federal securities laws by, and obtain disgorgement and civil penalties from, defendants fusion analytics investment partners, llc ("faip"), fusion analytics holdings, llc ("fusion holdings"), and michael j. Conte ("conte," and, with faip and fusion holdings, "defendants"). From 2010 to 2016, defendants raised approximately $1.4 million through the offer and sale of promissory notes ("notes") to 10 individual retail investors and advisory clients, most of whom were retired and elderly, without disclosing material facts regarding faip's declining financial condition. Instead, defendants made material misrepresentations regarding faip's profitability and the safety and soundness of the notes. Defendants were unable to repay investors their principal at the time of the notes' maturity due to faip's worsening financial condition. Between 2013 and 2018, defendants succeeded in renegotiating the material terms and reissuing six of the notes, totaling approximately $850,000, still without disclosing to investors faip's continuing financial decline. Ultimately, defendants defaulted on the majority of the notes. Defendants have repaid certain investors all or part of the outstanding principal and interest related to their notes. To date, defendants have failed to repay two notes totaling $246,000 in principal.
by engaging in this conduct, defendants violated section 17(a) of the securities act of 1933 ("securities act"), and section 10(b) of the securities exchange act of 1934 ("exchange act"), and exchange act rule 10b-5; and faip and conte additionally violated sections 206(1) and 206(2) of the investment advisers act of 1940 ("advisers act").
