Regional brokerage Sterne Agee Group Inc. overhauled its top management last week, days after filing a lawsuit that accused its auditing firm of negligence.
Birmingham, Ala.-based Sterne Agee on Friday said it had replaced its CEO, Jim Holbrook Jr., with Eric Needleman. A company veteran, Mr. Needleman will assume both the role of chairman of Sterne Agee Group and CEO of Sterne Agee & Leach Inc. Sal A. “Joe” Nunzietta is the new CEO and president of Sterne Agee Group Inc.
A news release gave no reason why the company replaced Mr. Holbrook and the circumstances of his departure are unclear. Spokesman Matt Cochran on Tuesday did not return calls for comment.
Through its variety of subsidiaries, Sterne Agee, which is privately held, has custody of more than $23 billion in client assets and 1,600 employees.
The change at the top of Sterne Agee came a few days after the company sued its auditor, KPMG, claiming that “KPMG performed auditing services for Sterne that resulted in Sterne's suffering significant money damages due to KPMG's negligent performance of those audit services in connection with KPMG's audits of consolidated financial statements,” according to the complaint, which was filed in state court in Jefferson County, Ala.
Between November 2009 and July 2011, Sterne Agee and KPMG had agreements for KPMG to perform auditing services for the company, according to the complaint.
KPMG spokesman Tim Connolly said the company had no comment on pending litigation.
“Specifically, KPMG negligently failed to conduct the audits of Sterne's financial statements in accordance with the auditing standards generally accepted in the United States of America, and KPMG negligently expressed opinions as to whether Sterne's financial statements conformed to United States generally accepted accounting principles,” according to the complaint.
“As a result of KPMG's negligent performance of its auditing services, material amounts of Sterne's total stockholders' equity was misstated,” the complaint alleged.
Last year, Sterne Agee's former CFO, Brian Barze, sued the investment house and Mr. Holbrook, accusing them of fraud, breach of contract, defamation and other allegations. Mr. Barze alleged he was fired after trying to curb wasteful spending at the firm.