The U.S. Securities and Exchange Commission is conducting an investigation into the relationship between Jefferies Financial Group Inc. and the bankrupt auto parts manufacturer, First Brands Group, as reported by The Financial Times on Thursday.
The newspaper, quoting individuals familiar with the situation, revealed that the regulator is scrutinizing whether Jefferies provided sufficient information to investors regarding its Point Bonita fund's exposure to the failed auto business.
This inquiry is in the early stages and focuses on internal controls and potential conflicts within Jefferies. At this point, it is uncertain whether the investigation will lead to any formal accusations of misconduct.
Jefferies faced increased scrutiny last month following its exposure to First Brands, which went under due to a series of intricate debt agreements, sparking concerns over potential additional problematic loans on Wall Street.