Equity Trust Company, an Ohio-based self-directed IRA custodian holding roughly $72 billion across 359,000 accounts, has been named in a series of lawsuits and regulatory actions over the past decade — nearly all of them tied to third-party investment schemes that lost customers their retirement savings.1Equity Trust Company. About Us – Who We Are The company has prevailed in most decided cases by pointing to its limited role as a “directed custodian” that does not evaluate investments, and it has repeatedly succeeded in pushing disputes into arbitration. Two significant matters remain open: a proposed class action tied to Oxford Gold Group and a Ninth Circuit appeal over whether investors can escape arbitration clauses they signed.
SEC Charges Over the Taylor and Poulson Ponzi Schemes
In June 2015, the Securities and Exchange Commission charged Equity Trust with being a “cause” of securities fraud committed by two promoters, Ephren Taylor and Randy Poulson, whose separate Ponzi schemes collectively cost more than 100 investors around $5 million in retirement savings.2SEC. SEC Announces Charges Against Equity Trust Company
Taylor targeted churchgoers through his company City Capital Corporation between 2008 and 2012, selling bogus promissory notes. Roughly 80 Equity Trust customers invested about $4.3 million with him, almost all of which was lost. Taylor later pleaded guilty to conspiracy and was sentenced to 235 months in federal prison. Poulson sold notes purportedly backed by real estate mortgages through Equity Capital Investments; 26 Equity Trust clients invested about $800,000, and he was later indicted on mail and wire fraud charges.3SEC. In the Matter of Equity Trust Company, Release No. 9807
The SEC alleged that Equity Trust went beyond the passive-custodian role. According to the agency, company employees vouched for Taylor at investor seminars, sponsored promotional dinners for Poulson, hosted web landing pages for the promoters, and trained their sales teams. The SEC also alleged the company ignored red flags including missing collateral documents, continued processing investments in notes it knew were mature and unpaid, and shared confidential account information with the promoters without customer consent.3SEC. In the Matter of Equity Trust Company, Release No. 9807 Even after the SEC filed fraud charges against Taylor in 2012, the company reportedly kept servicing the accounts and charging annual fees on the affected investments.2SEC. SEC Announces Charges Against Equity Trust Company
The case fell apart for the SEC. An administrative law judge dismissed all charges in June 2016, finding Equity Trust acted as a passive custodian and calling the SEC’s proposed standard of care for self-directed IRA custodians “essentially made up of whole cloth.”4Law360. In-House SEC Suit Against Equity Trust Co Gets Quashed On September 28, 2017, the full Commission affirmed the dismissal, finding that the enforcement division had not proven Equity Trust knew or should have known its conduct contributed to the fraud, and no evidence established that the firm had actual knowledge of the Ponzi schemes.5SEC. In the Matter of Equity Trust Company, Release No. 10420
Hampton v. Equity Trust Company
Investor Laura Hampton lost money in a Ponzi scheme run by Robert Langguth, who had sold participation shares in promissory notes he falsely claimed were secured by first liens on real estate. Langguth filed for bankruptcy in 2010 and pleaded guilty to federal wire fraud and money laundering in 2012.6FindLaw. Hampton v. Equity Trust Company
Most investors settled with Equity Trust on undisclosed terms. Hampton went to trial on claims of aiding and abetting violations of the Texas Securities Act and common-law fraud. In January 2019, a jury found Equity Trust 15% liable. The trial court set aside the statutory verdict but entered judgment on the common-law aiding-and-abetting claim.6FindLaw. Hampton v. Equity Trust Company
The Texas Court of Appeals reversed the whole judgment in July 2020. It ruled that Texas does not recognize a common-law cause of action for aiding and abetting, rendering a take-nothing judgment against Hampton, and it affirmed the trial court’s decision to set aside the Texas Securities Act claim on statute-of-limitations grounds.6FindLaw. Hampton v. Equity Trust Company
Equity Trust Company v. Morris
The Alabama case grew out of a scheme by James Blake Daughtry, a registered representative, and Jared Eakes, a former Merrill Lynch advisor. Beginning in early 2019, the two allegedly forged client signatures on more than 100 documents to open unauthorized self-directed IRA and brokerage accounts at Equity Trust and its affiliate ETC Brokerage Services, then moved funds from legitimate accounts into a sham entity called Small World Capital. The plaintiffs alleged that Equity Trust ignored red flags such as identical forged signatures and missing documents, and issued fake quarterly statements showing full account values when balances were near zero.7FindLaw. Equity Trust Company v. Morris
One group of plaintiffs alleged the theft of nearly $1.5 million; a separate investor, Gary Morgan, claimed about $233,000.7FindLaw. Equity Trust Company v. Morris Equity Trust moved to compel arbitration under clauses in the account agreements. The trial court denied the motion, but in August 2022 the Alabama Supreme Court reversed.
For Morgan, who personally signed an IRA application incorporating the arbitration clause, the court held that his fraud claims were fraud in the inducement rather than fraud in the factum, leaving the arbitration agreement enforceable. For the nonsignatory plaintiffs whose signatures were allegedly forged, the court applied an estoppel theory: because their claims depended on the very account agreements containing the arbitration provisions, they could not rely on the agreements and reject the clauses within them.8Cunningham Bounds. Arbitration Fraud in the Factum Enforcement Against Equity Trust
Daughtry was permanently barred by FINRA in March 2020. The SEC obtained a final consent judgment against him in May 2026 that included a $50,000 civil penalty and a permanent industry bar. The SEC’s case against Eakes, who allegedly misappropriated roughly $2.6 million, remains pending.9SEC. SEC v. Daughtry Litigation Release
Oxford Gold Group Class Action
The most recent major case is a proposed class action filed in August 2024 in the U.S. District Court for the Southern District of California by hundreds of investors across at least 27 states. Lead plaintiffs Howard and Heather Short of San Diego alleged they believed they had invested retirement funds in precious metals through Oxford Gold Group, only to find their purchases were never properly credited to their accounts.10San Bernardino Sun. A San Diego Couple Thought They’d Invested in Gold. Instead, They and Hundreds of Others Say They Were Scammed
The complaint names Oxford Gold Group and its principals (CEO Pedram Granfar, CFO Johnathan Adler, and co-founder Patrick Granfar) along with Equity Trust. Plaintiffs allege that Equity Trust’s own business records showed a substantial and material amount of Oxford Gold Group transactions were not settling, yet the company allowed investor funds to go unaccounted for. The claims include fraud, breach of fiduciary duty, violation of federal securities laws, and unfair competition.11Denver Post. A San Diego Couple Thought They’d Invested in Gold
Investors said they had been told their metals would be stored in a Utah-based depository, but the depository reported no knowledge of the orders. Equity Trust eventually notified customers it was no longer working with Oxford Gold Group. Oxford Gold’s Better Business Bureau accreditation was revoked, and its Beverly Hills office was found closed and empty by late August 2024.12ABC7. Oxford Gold Group More Complaints Emerge A parallel suit was filed in Sacramento federal court around the same time. Equity Trust said it does not comment on pending litigation.10San Bernardino Sun. A San Diego Couple Thought They’d Invested in Gold. Instead, They and Hundreds of Others Say They Were Scammed
Ninth Circuit Appeal on Arbitration
A separate case captioned Investing Plaintiffs v. Equity Trust Company (No. 25-7463) is pending before the U.S. Court of Appeals for the Ninth Circuit. The district court denied Equity Trust’s motion to compel arbitration, crediting plaintiff declarations that they had not read or seen the arbitration clause, despite signing an application containing two prominent acknowledgments (one in a blue “IMPORTANT” banner and one in bold type) stating they had received, read, and understood the custodial account agreement.13Washington Legal Foundation. WLF Urges Ninth Circuit to Reverse District Court’s Refusal to Enforce Arbitration Agreement
On June 12, 2026, the Washington Legal Foundation filed an amicus brief urging reversal, arguing the district court “rewrote California’s incorporation-by-reference standard” and improperly prioritized “subjective testimony over objective manifestations of assent” in violation of the Federal Arbitration Act. WLF’s general counsel said that “allowing plaintiffs to evade signed arbitration agreements by claiming they never read them would destroy the certainty that written contracts exist to provide.”13Washington Legal Foundation. WLF Urges Ninth Circuit to Reverse District Court’s Refusal to Enforce Arbitration Agreement The case is unresolved.
What the Pattern Means for Account Holders
The common thread across these cases is the gap between what investors expect from a company holding their retirement savings and the legally limited role of a self-directed IRA custodian. The SEC itself has acknowledged that self-directed IRA custodians “generally do not evaluate the quality or legitimacy of any investment” and operate under agreements that disclaim responsibility for investment performance.14SEC. Investor Alerts – Self-Directed IRAs
Equity Trust’s custodial agreements expressly state that the company is not a fiduciary, does not provide investment advice, and has no duty to investigate, analyze, or monitor investments chosen by account holders.5SEC. In the Matter of Equity Trust Company, Release No. 10420 That framework has largely shielded the company. In the SEC proceeding, both the ALJ and the full Commission declined to hold Equity Trust liable for the frauds of third-party promoters. In Texas, the appellate court found no viable theory for aiding-and-abetting liability against a passive custodian. In Alabama, the Supreme Court enforced arbitration clauses even against plaintiffs who alleged their signatures had been forged.
Arbitration is the second recurring issue. Equity Trust’s account agreements include arbitration clauses, and the company has aggressively enforced them. The Alabama Supreme Court sided with it in 2022, and the Ninth Circuit appeal will decide whether investors can avoid clauses in agreements they signed. For account holders, the practical takeaway from the decided cases is that the burden of investigating investments and the promoters offering them sits with the customer, not the custodian, and that disputes are likely to be routed to arbitration rather than a jury. Whether that pattern holds through the Oxford Gold Group case and the pending Ninth Circuit ruling is the next thing to watch.