The Securities and Exchange Commission today charged registered investment adviser Fusion Analytics Investment Partners, LLC (FAIP) and its CEO Michael J. Conte with breaches of fiduciary duty and, along with Fusion Analytics Holdings, LLC (Fusion Holdings), with fraud in connection with the sale of promissory notes.

According to the SEC's complaint, filed in the United States District Court for the Southern District of Florida, from 2010 to 2016, the defendants solicited individual retail investors and advisory clients to purchase promissory notes issued by Fusion Holdings and raised $1.4 million from 10 investors without disclosing material facts regarding FAIP's declining financial condition. The complaint further alleges that Conte, on behalf of FAIP and Fusion Holdings, made material representations to investors regarding FAIP's profitability and the safety and soundness of the promissory notes.

The SEC's complaint charges the defendants with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Additionally, the complaint charges FAIP and Conte with violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC seeks permanent injunctions and, on a joint-and-several basis, disgorgement with prejudgment interest and civil penalties against all defendants.

The SEC's investigation was conducted by Cecilia Danger and Fernando Torres and was supervised by Jessica M. Weissman and Glenn S. Gordon. The litigation will be led by Andrew Schiff. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.