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.

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.

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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.

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In 2015, Sterne Agee was acquired by Stifel Financial, which sold it to INTL FCStone Inc. in 2016.