Adam K. Veron, of Lake Charles, Louisiana, a stockbroker formerly registered with Questar Capital Corporation, has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he engaged in private securities transactions. Letter of Acceptance, Waiver and Consent, No. 2017053237601 (Aug. 22, 2017).
According to the AWC, in July of 2015, Veron founded and became president of a company, Contract Funding and Corporate Management, LLC (CFCM). Apparently, CFCM’s funds were utilized by Company A in order to effect federal procurement agreements, wherein Company A compensated CFCM based on profitability. The AWC stated that $1,740,000.00 of CFCM shares were then sold by Veron to nine Questar Capital Corporation customers, with an additional $50,000.00 in shares sold to an investor who was not a customer of the firm.
Veron reportedly facilitated the securities transactions of the customers, and made arrangements for the private offering memorandum and subscription agreements to be drafted accordingly. The AWC stated that Veron deposited customers’ payments in a banking account that he controlled. Moreover, Veron reportedly kept control over the business relationship between Company A and determined which customers could make investments. Evidently, of all the customers who invested, only two customers have been paid back.
The AWC revealed that the firm’s supervisory procedures called for Veron to notify the firm in writing and retrieve approval before effecting securities transactions away from the firm. Critically; however, stockbrokers such as Veron were not allowed to pursue securities transactions with the firm’s customers for purposes of generating capital for the stockbroker’s own business endeavors. Yet, between July of 2015 and December of 2016, the private securities transactions involving $1,790,000 of investor funds were never made known to Questar by Veron.
The AWC additionally stated that Veron was administered compliance questionnaires in 2015 and 2016, where he failed to furnish information about his outside business activities and private securities transactions. Consequently, FINRA found that Veron’s conduct was violative of FINRA Rules 2010 and 3280, as well as NASD Rule 3040.
FINRA Public Disclosure reveals that Veron was fired from Questar Asset Management and Questar Capital Corporation on February 9, 2017, based upon allegations that outside business activities were not timely disclosed by Veron as required.
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