(Bloomberg) -- Sterne Agee Group, one of the fastest-growing brokerages in the South, sued its former chief executive officer over claims he took his corporate credit card on a decade-long spending spree for fishing boats, a yacht, a vacation condominium and ownership in a luxury ski chalet.
The complaint against James S. Holbrook Jr., ousted as CEO in May, follows revelations that hes being investigated by the U.S. Justice Department over the claims. The probes are still under way, a person familiar with the matter said, asking not to be named because the investigation isnt public.
Holbrook is also accused of using company assets for membership in an exclusive marina and golf club in Key Largo, Florida, and to acquire an interest in a luxury hunting club in his home state of Alabama, according to the complaint filed this month in state court in Jefferson County, Alabama.
Holbrook wasted SAGs corporate assets and used them for his own personal benefit, the Birmingham, Alabama-based brokerage said in the complaint. His conduct was beyond how a reasonable person might act in his position, according to the filing.
Sterne Agee, which traces its roots to a securities firm founded in 1901 by former Birmingham Mayor George B. Ward, said it hasnt uncovered evidence Holbrook harmed customers. The companys wealth-management unit has $26 billion in client assets under management, according to its website.
Holbrooks attorney, Bruce Gordon of Gordon, Dana & Gilmore in Birmingham, declined to comment on the compliant.
The lawsuit addresses Mr. Holbrooks misappropriation of corporate assets for his own personal benefit, and follows both federal and internal investigations into Mr. Holbrooks use of holding company assets, Mike Goodwin, a Sterne Agee spokesman, said in an e-mailed statement Thursday.
The brokerage said it opened its own investigation into Holbrooks activities and is using the lawsuit, which accuses him of misappropriation of breach of duty, to recover assets on behalf of the firm.
Holbrook, starting in 2003, used corporate assets to buy two fishing boats and a Chevrolet Suburban through an entity he formed called Birmingham Broward, according to the complaint.
Over the next few years, the executive used company resources in a similar manner to invest in the ski chalet in Deer Valley, Utah, and acquire an interest in Five Star Plantation, a hunting club in Kellyton, Alabama, according to the complaint.
The most recent purchase described in the complaint was in March, when Holbrook allegedly diverted company resources to buy a 68-foot (21-meter) luxury fishing yacht.
Peter Carr, a Justice Department spokesman, declined to comment on the litigation.
The case in Sterne Agee Group Inc. v. James S. Holbrook Jr., 01-cv-2014-904980, Circuit Court of Jefferson County, Alabama.
Read more:
