Great Western Brokerage Unit Gets New CEO

Great Western Financial Corp. on Monday named a new president and chief executive for its securities brokerage subsidiary, which continues under the shadows of a lawsuit that charges it sold mutual funds to unsophisticated customers without detailing the risks.

James H. Overholt, 48, will head Great Western Financial Securities Corp., which sells stocks, bonds, mutual funds and other investment products through the 420 Great Western Bank branches in California and Florida. With more than 350,000 accounts, it is one of the nation’s largest bank-affiliated brokerage firms.

The appointment reflects continuing efforts by the nation’s second-largest savings and loan to diversify beyond its traditional core business of certificates of deposit and mortgage loans. Previously, F. Brian Cerini handled both the brokerage unit and Great Investment Management, which runs the portfolios of the company’s 15 Sierra mutual funds. Cerini will continue as president and chief executive of the investment management unit.

According to the Chatsworth-based company, running mutual funds is considerably different from selling them, and the new management structure will allow more focus on each. “The business objective is to have both of these businesses grow as quickly as possible,” Great Western spokesman Ian Campbell said.

Overholt had been the president of Bank South Investment Services in Atlanta. From 1990 to 1994, he was managing director of Wachovia Series Inc., also in Atlanta.

In November, a federal judge certified a class-action lawsuit against Great Western. That suit, first filed by nine depositors in April, alleges that Great Western brokers failed to explain that their mutual funds carried risk, weren’t federally insured and charged commissions.

Overholt said he has reviewed the allegations and backs the company’s position that it had done nothing wrong.