SEC investigates Jefferies over First Manufacturers collapse, report says

The U.S. Securities and Trade Fee is investigating Jefferies’ relationship into bankrupt auto components maker First Manufacturers Group, The Monetary Occasions reported Thursday.

The newspaper, citing folks with data of the matter, stated the regulator is wanting into whether or not Jefferies gave buyers sufficient data on its Level Bonita fund’s publicity to the failed auto enterprise.

The inquiry into inner controls and potential conflicts inside the financial institution is at an early stage, the report stated. It isn’t clear whether or not it can lead to any allegations of wrongdoing.

Jefferies got here underneath strain final month after its publicity to First Manufacturers — which collapsed underneath a collection of advanced debt agreements — raised fears of different dangerous loans on Wall Road.

Shares of Jefferies are down greater than 12% this quarter and 27% this yr.

When requested for remark, an SEC spokesperson stated the company “doesn’t touch upon the existence or nonexistence of a doable investigation.”

Jefferies didn’t reply to CNBC’s request for remark.