SEC Sanctions O.N. Investment Management Company for Overcharges
According to an administrative release posted on January 11, 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, a wholly-owned subsidiary of The Ohio National Life Insurance 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 readily available and did not charge 12b-1 fees.
O.N Equity Sales Company acted as an introducing broker-dealer for O.N. Investment Management Company’s advisory clients.
As a registered investment adviser or RIA, O.N. Investment Management Company 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.
In addition to a censure, O.N. Investment Management Company will pay a fine including disgorgement of $866,257, prejudgment interest of $162,396, and a civil penalty of $210,000.
Free Consultation with a Securities Attorney
If you are concerned about your investments with O.N. Investment Management Co., the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call the offices at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.
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