Finra censures and fines Sterne Agee for failing to supervise former CEO

Sterne Agee fired James Holbrook, Jr. in May 2014 for allegedly misusing company assets and spending lavishly on perks.
JUN 01, 2017

The Financial Industry Regulatory Authority Inc. has censured Sterne, Agee & Leach Inc., and fined it $160,000 for failing to supervise the activities of its former CEO, James Holbrook, Jr. Between June 1, 2011 and May 23, 2014, the firm "did not ensure that the office of the chief executive officer was appropriately supervised" and it "also failed to adequately supervise [Mr. Holbrook] with respect to his entertainment and/or contributions to political figures," Finra said in a release, which did not mention Mr. Holbrook by name. (More: Finra set to invest more in examiner training, provide more clarity on enforcement choices) Sterne Agee fired Mr. Holbrook in May 2014 for allegedly misusing company assets and spending lavishly on perks. The board took the action after it learned of a federal criminal investigation into possible misconduct by the CEO. The Finra letter of acceptance, waiver and consent stated that Sterne Agee failed to comply with Rule 3010 of the National Association of Securities Dealers, Rule G-27 of the Municipal Securities Rule-Making Board regarding the supervision of registered personal, and Finra Rule 2010. (More: Critics say Finra proposal on unpaid arbitration awards doesn't go far enough) In 2015, Sterne Agee was acquired by Stifel Financial, which sold it to INTL FCStone Inc. in 2016.

Latest News

JPMorgan tells fintech firms to start paying for customer data
JPMorgan tells fintech firms to start paying for customer data

The move to charge data aggregators fees totaling hundreds of millions of dollars threatens to upend business models across the industry.

FINRA snapshot shows concentration in largest firms, coastal states
FINRA snapshot shows concentration in largest firms, coastal states

The latest snapshot report reveals large firms overwhelmingly account for branches and registrants as trend of net exits from FINRA continues.

Why advisors to divorcing couples shouldn't bet on who'll stay
Why advisors to divorcing couples shouldn't bet on who'll stay

Siding with the primary contact in a marriage might make sense at first, but having both parties' interests at heart could open a better way forward.

SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives
SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives

With more than $13 billion in assets, American Portfolios Advisors closed last October.

William Blair taps former Raymond James executive to lead investment management business
William Blair taps former Raymond James executive to lead investment management business

Robert D. Kendall brings decades of experience, including roles at DWS Americas and a former investment unit within Morgan Stanley, as he steps into a global leadership position.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.