Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Adam Veron (Veron), in February 2017, was terminated by his then employer Questar Capital Corporation (Questar). Questar stated that Veron was terminated due to undisclosed outside business activities and the sale of unapproved products.
Thereafter, in August 2017, FINRA brought action against Veron barring him from the industry. FINRA alleged that in July 2015, Veron formed Contract Funding and Corporate Management, LLC (CFCM) and served as its President. CFCM allegedly provides a line of credit to a company which uses the funds to fulfill its federal procurement contracts and then pays profits to CFCM. FINRA found that Veron sold approximately $1.8 million worth of shares in CFCM. FINRA found that Veron participated in CFCM by soliciting the investors, hiring legal counsel to draft the Subscription Agreement and Private Offering Memorandum, accepting investments by check, depositing those checks into a bank account that he controlled, providing the investors with the Offering Documents, distributing profits from CFCM, managing CFCM’s relationship with the company, and deciding who could invest in CFCM.
The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.