Broker agrees to Finra bar for engaging in unapproved securities transactions

Registered rep formed a company and then sold $1.74 million worth of shares to his brokerage clients.

Adam Veron, a former broker with Questar Capital Corp. in Lake Charles, La., has proposed a settlement, which Finra has accepted, of alleged rule violations involving unapproved securities transactions. The agreement includes a bar from associating with any Finra member firm.

According to the Financial Industry Regulatory Authority Inc., Mr. Veron participated in private securities transactions from July 2015 to December 2016 without first providing notice to Questar, which violated the firm’s written supervisory procedures.

In his proposed letter of acceptance, waiver and consent, Mr. Veron said that he formed Contract Funding and Corporate Management in July 2015 to provide a line of credit to a company that used the funds to fulfill its federal procurement contracts. In turn, the company passed on a portion of its profits to CFCM. Shortly after forming his company, Mr. Veron began selling shares in CFCM, including approximately $1.74 million worth of shares to nine Questar customers and another $50,000 worth of shares to one non-customer. Mr. Veron has since repaid two investors the amount of their investment plus interest, the Finra-approved letter said.

The letter also said that Mr. Veron did not provide written notice to, or obtain Questar’s approval for, the nearly $1.8 million worth of investments from July 2015 to December 2016. Also, in 2015 and 2016, in response to Questar’s annual compliance attestations, Mr. Veron provided false answers regarding his participation in private securities transactions and outside business activities.