US SEC probing Jefferies for bankrupt First Brands dealings: FT

NEW YORK: The US Securities and Exchange Commission is probing investment bank Jefferies over its relationship with bankrupt auto parts supplier First Brands Group, the Financial Times reported on Thursday, citing people familiar with the matter.

The SEC is seeking information from Jefferies about whether it gave investors in one of its funds enough information about their exposure to the auto business, the report said. Jefferies said in October that it had limited exposure to First Brands, which filed for Chapter 11 bankruptcy protection in September, and said any potential losses would be “readily absorbable.” Jefferies’ Leucadia Asset Management fund, through its credit fund Point Bonita, held about $715 million in receivables linked to First Brands.

The SEC is investigating whether Point Bonita’s investors were aware of the relationship, according to the FT report.