Overview
- The inquiry centers on Jefferies’ Point Bonita fund after reports it held about $715 million in receivables tied to bankrupt First Brands.
- As of June, fund materials listed major exposures to Walmart and O’Reilly, though payments were routed through First Brands rather than those retailers.
- Bankruptcy filings show $2.3 billion of invoice financing was ultimately paid by First Brands itself, not the end customers named in fund documents.
- Investigators are also reviewing possible lapses in internal controls and potential conflicts of interest across Jefferies units.
- The Financial Times reported a disputed side letter on fees; Jefferies acknowledged the agreement and says it was disclosed and supported by a legal opinion, while CEO Rich Handler has said the firm believes it was defrauded by First Brands.