The O.N. Equity Sales Company (“ONESCO”) (CRD# 2936) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors. At the Law Offices of Robert Wayne Pearce, we have investigated ONESCO, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
If you believe you have a claim against The O.N. Equity Sales Company , you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.
Can I Sue The O.N. Equity Sales Company?
If you’ve lost money caused by ONESCO and/or its employees’ misconduct then the answer is, YES, you can sue ONESCO but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue ONESCO in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against ONESCO is to call Attorney Pearce at our office at 800-732-2889.
What is The O.N. Equity Sales Company?
ONESCO (CRD# 2936) has been registered with FINRA as a broker dealer since1968 and is controlled by the Ohio National Life Insurance Company and headquartered in Cincinnati, Ohio with small branch offices located throughout the United States. Its independent broker-dealer Business Model has grown through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 400 ONESCO branch offices with over 900 registered representatives in every state. It is now one of the 50 largest independent broker-dealer and investment advisory firms in the United States.
The O.N. Equity Sales Company Has Many Different Regulatory Problems
ONESCO’s growth has not been without consequences. There have been approximately 7 Federal, state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) ) for a violation(s) of investment-related rules or regulations. In addition, there have been scores of customer complaints filed against ONESCO for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
We have reported and written about these regulatory problems and customer complaints over many years. ONESCO is a repeat offender: there are over 5 FINRA and SEC reported disciplinary proceedings citing the firm with one form of supervisory lapses or another.
A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS THE O.N. EQUITY SALES COMPANY HAS FACED OVER THE YEARS*
ONESCO has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its supervisory failures are below:
FINRA Sanctions ONESCO For Unsuitable Investment Strategy
As a result of a FINRA staff investigation, the regulator discovered ONESCO failed to establish and maintain a supervisory system, and failed to establish, maintain, and enforce written supervisory procedures, that were reasonably designed to supervise the sale of variable annuities. As a result, ONESCO failed to detect that its representative’s recommendations of an unsuitable investment strategy involving 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. FINRA concluded that ONESCO’s failure to supervise its representatives violated NASD Rule 3010, FINRA Rule 3110, FINRA Rule 2330, and FINRA Rule 2010 for which it was censured and fined $275,000 and ordered to pay restitution of over $1 million to customers damaged by this flawed strategy.
FINRA Sanctions ONESCO For TRACE Violations
During the review period, FINRA discovered ONESCO failed to report to TRACE hundreds of transactions in TRACE-eligible securities that it was required to report. The conduct described in this paragraph constitutes separate and distinct violations of NASD Marketplace Rule 6230(b) for which the firm was censured and fined $10,000.
FINRA Sanctions ONESCO For Variable Annuity Sales Abuses
During the relevant period, FINRA investigators found ONESCO failed to establish, maintain, and enforce a supervisory system, including written procedures for variable annuity transactions, reasonably designed to achieve compliance with applicable securities laws and regulations and FINRA rules.
ONESCO’s supervisory system and procedures were deficient in two respects. First, its system did not ensure that the principals approving variable annuity exchanges or replacements had certain information relevant to review the suitability determinations of registered representatives in all cases. As a result, in many instances principals approved variable annuity exchanges and replacements without having information that may have been material to a suitability analysis, such as: (1) surrender charges, (2) death benefits, (3) contract costs and fees, and (4) riders. Second, ONESCO permitted the 23 designated principals in its Offices of Supervisory Jurisdiction (“OSJs”) to self-approve their own sales of non-proprietary variable annuities to customers. Accordingly, FINRA concluded ONESCO violated NASD Rules 3010(a), 3010(b) and 2110 for which it censured and fined the broker dealer $70,000.
*Above are only some of the regulatory disciplinary actions filed against ONESCO by FINRA. There are at least 4 more SEC, FINRA, NASSA, and/or state securities regulator investigations and enforcement actions reported on BrokerCheck as regulatory disciplinary proceeding disclosures.
The O.N. Equity Sales Company Customer Complaints
There have been hundreds of complaints filed against ONESCO stockbrokers and investment advisors over the years. We have launched a number of investigations of current and former ONESCO advisors, including:
If you have lost money investing with these ONESCO advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call us at 800-732-2889.
Why Does The O.N. Equity Sales Company Have So Many Regulatory Problems And Customer Complaints?
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.
These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.
Did The O.N. Equity Sales Company Advisor Misconduct Cause You Investment Losses?
When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. ONESCO is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting ONESCO without representation with an attorney about their complaints and have their complaints denied.
Related Read: Can You Sue Your Brokerage Firm?
Consult With An Attorney Who Recovers Investment Losses Caused By The O.N. Equity Sales Company Today!
The securities fraud attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with ONESCO cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.