Sterne Agee overhauls leadership after filing lawsuit against auditing firm KPMG

Regional brokerage replaces Holbrook as CEO days after accusing auditor of negligence

May 27, 2014 @ 5:39 pm

By Bruce Kelly

sterne agee. kpmg, auditor, accountant, accounting firm, broker
+ Zoom
Jim Holbrook Jr.

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.

(See also: Sterne Agee Group in deal to acquire midsize IBD WRP Investments)

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.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Does your pay stack up?

The Adviser Research Dashboard

Based on data collected through InvestmentNews' annual adviser research studies, this interactive, customizable tool allows you to view detailed data on compensation, staffing and financial performance practices from across the industry.

Learn more »

Featured video

Events

Carson Group's Schaben: Making sense of millennials

Lazy, entitled, the trophy generation: These are stereotypes most often associated with millennials. But why are these myths and not realities. Carson Group's Aaron Schaben explains.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

Finra ranking brokers in effort to crack down on industry's bad apples

All 634.403 reps have been ranked based on factors such as prior regulatory disclosures, disciplinary actions and employment history.

How to save retirement planning from tax reform

Losing big deductions, even in lieu of a larger standard deduction, may cause taxes to rise in retirement.

Advice firms in a tricky financial position

As revenue growth dips and salaries rise, nearly 90% of firms are at or near capacity.

In a turnaround, Wells Fargo Advisors sees slight bump in headcount

Racked by a scandal in its retail banking unit, Wells still managed to add 37 new advisers in the third quarter, a small number but an improvement nonetheless.

Social Security benefits to increase by 2% in 2018

Largest cost-of-living adjustment since 2012 may be offset for some by higher Medicare premiums.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print