The White Law Group reviews the regulatory history of O.N. Equity Sales Company. 

O.N. Equity Sales Company (CRD#: 2936/SEC#: 8-14161), headquartered in Cincinatti, Ohio, is a dual registered national financial advisory firm with $84 million in revenue in 2021. It is one of the fifty largest independent brokerage firms in the US, according to data from Investment News. According to FINRA BrokerCheck, the firm reportedly has 9 disclosures on its broker record including 7 regulatory actions and 2 arbitrations. 

Arbitrations on a broker-dealers’ CRD (Central Registration Depository) refer to any arbitration cases that have been filed against the broker-dealer and its registered representatives. Arbitrations can be an indication of the number and severity of customer complaints and disputes that have been filed against the firm and its registered representatives. This information can be useful for investors and other stakeholders in evaluating the risk associated with doing business with a particular broker-dealer.  

Regulatory actions taken against a broker-dealer may include censures, fines, suspensions and restitution, among other sanctions. They can have serious consequences for a broker-dealer’s profile and reputation.   

FINRA Sanctions O. N. Equity for Unsuitable VA Sales 

In May 2021, the Financial Industry Regulatory Authority (FINRA), the self-regulator that oversees brokers and brokerage firms, censured and fined O. N. Equity Sales Company $275,000. The firm paid more than $1 million in restitution to customers in connection with its failure to supervise variable annuities sales. 

From March 2014 through September 2017, the firm reportedly failed to establish and maintain a supervisory system and procedures, according to FINRA’s findings. O.N. Equity allegedly failed to detect that its representative recommended an unsuitable investment strategy. The purported strategy involved the liquidation of retirement funds to purchase variable annuities followed by the short-term withdrawal of funds from those annuities to purchase whole life insurance policies, according to FINRA. 

SEC Sanctions O.N. Investment Management for Conflicts of Interest 

In January 2022, the SEC reportedly fined O.N. Investment Management Company for breaches of its fiduciary duty to its clients in connection with its selection of mutual funds that benefited its parent company.  

O.N. Investment Management Company reportedly advised clients to purchase or hold mutual fund share classes that charged higher fees, called 12b-1 fees, when lower-cost share classes of those same funds were available and without the 12b-1 fees.   

O.N Equity Sales Company acted as an introducing broker-dealer for O.N. Investment Management Company’s advisory clients.  

O.N. Investment Management Company, as a Registered Investment Advisor, was obligated to disclose all material facts to its advisory clients, including any conflicts of interest between it and its clients, which could affect the advisory relationship. (To learn more see Registered Investment Advisor (RIA) – Securities Fraud Attorneys)   

The firm was also required to disclose all material facts relating to how those conflicts could affect the advice its associated persons provided its clients and was also obligated to provide its advisory clients with full disclosure so that the clients would have an informed basis on which they could consent to or reject the conflicts.   

According to the SEC, O.N Equity Sales Company reportedly received 12b-1 fees from O.N. Investment Management Company customers that they would otherwise not have collected had the investors owned the lower-cost shares, which were easily available.    

The RIA firm allegedly failed to adequately disclose this conflict of interest to its clients, which violated its fiduciary duty to its clients. 

O.N. Equity Sales Company Customer Complaints, Broker Misconduct 

All broker-dealers have a responsibility to adequately supervise their employees. They must ensure the necessary procedures and systems to detect misconduct.  Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.   

When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.    

There have been several cases of registered representatives employed by O.N. Equity Sales Company who were allegedly involved in broker misconduct and fraudulent activities.  

In August 2020 FINRA barred a broker registered with O.N. Equity Sales Company in Forked River, New Jersey after allegations that he participated in a private securities transaction without providing prior written notice to his member firm.  

In April 2020, FINRA reportedly suspended an O.N. Equity Sales Company rep for two months and fined him $5,000. The rep, in Windsor, Colorado, allegedly engaged in a consulting business, contracted with an individual to market the mineral rights she owned in connection with a property, and solicited purchase offers from energy and mineral companies, through a limited liability company that he established with two individuals who were not associated with a member firm. The broker failed to seek Firm approval or provide the Firm with written notice before engaging in these outside business activities and therefore violated FINRA Rules 3270 and 2010. 

In May 2019 the Kansas Securities Commission barred O.N. Equity broker Lawrence Hagedorn from the securities industry and ordered him to pay a $50,000 fine and restitution of $102,500 to two customers for allegedly borrowing money from them. 

Hagedorn allegedly borrowed money from numerous customers claiming he was using the money to expand his financial services business, but instead allegedly deposited the money into a personal checking account. 

Hagedorn pleaded guilty to four counts of intentional violation of a state securities regulation with dishonest and unethical practices of broker-dealers (a felony) and was reportedly convicted and sentenced to 12 months of imprisonment., Hagedorn instead did two years of probation in lieu of incarceration, and paid restitution of $102,500. 

FINRA BrokerCheck – Easy way to check your Broker or Brokerage Firm 

Regulatory Disclosures on a firm’s broker report or CRD may contain information on any past disciplinary actions taken against the brokerage firm or its representatives, such as fines, suspensions, or revocations of licenses. This can provide insights into the firm’s compliance record. 

The FINRA BrokerCheck tool is a free online tool provided by the Financial Industry Regulatory Authority (FINRA) that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA. 

Using FINRA BrokerCheck, investors can make informed decisions about the suitability of a particular broker or brokerage firm for their investment needs,and can also report any suspected fraudulent or unethical behavior. The tool is widely used by individual investors, institutional investors, and industry professionals to research and evaluate potential investments and investment opportunities. 

FINRA Attorneys for Investment Losses    

When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.        

If your broker has defrauded you, you may be able to file a claim with FINRA to seek resolution through arbitration. FINRA arbitration can be a complex and technical process, and having an experienced attorney who is knowledgeable about securities law can greatly increase your chances of success.     

The FINRA attorneys at the White Law Group can help you with many aspects of the arbitration process including evaluating the merits of your claim and determining whether you have a strong case for arbitration.     

The White Law Group can assist you in drafting a statement of claim that accurately reflects the allegations of fraud and the damages you are seeking. They will also represent you at the arbitration hearing, present evidence and make arguments on your behalf.     

They can also negotiate a settlement on your behalf, which may be an option to consider before going to arbitration.     

Working with a FINRA attorney can help ensure that your interests are protected throughout the FINRA arbitration process, and that you have the best possible chance of achieving a favorable outcome.  Keep in mind, FINRA arbitration is generally a faster and less expensive alternative to a traditional court proceeding.

National Securities Attorneys – the White Law Group        

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.           

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.            

With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses.            

If you have concerns regarding investments you purchased through O.N. Equity Sales Company and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.   

For more information on The White Law Group, visit www.whitesecuritieslaw.com.