As Stock Sinks, Jefferies Sends Out Huge Letter Claiming One Hedge Fund Is Spreading Lies About It

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With its stock slipping, embattled investment bank Jefferies has just published a six-page letter denying that it’s in trouble related to Europe following the fall of MF Global.In the letter, Jefferies highlights its company strengths—including its 50-year history, liquid inventory, capital reserves of $2.2 billion and its long-term business ventures.

It also points out that Jefferies was able to get through the financial crisis in 2008 without a bailout. 

The letter, signed by CEO Dick Handler and chairman Brian Friedman, is also quick to blast the “malicious lies and false rumours” that have been spreading about the firm as its stock has taken a plunge in the last week.

In particular, the letter alleges that a hedge fund has been spreading lies of about Jefferies’ stability, saying the firm was trying to capitalise on Jefferies’ instability amid volatile markets and the recent downfall of MF Global.

Click here to view the letter. [PDF]

Jefferies has been in a precarious position since the fall of MF Global, which caused many investors to become even more anxious about exposure to European debt and the stability of smaller financial firms holding them.

Despite several attempts to mollify investors—including slashing its PIIGS exposure by half and releasing detailed reports of its European debt holdings—the firm seems unable to extinguish doubts about its long-term viability as company shares hit an 52-week low last Thursday and has been trading around $10 since then.

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