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Probe on Gifts to Fund Officials Is Said to Include Jefferies

December 03, 2004|From Bloomberg News

Jefferies Group Inc. is under investigation by the Securities and Exchange Commission as part of a probe into whether brokerages doled out gifts to mutual fund executives to win trading business, people familiar with the matter said this week.

The SEC and NASD are seeking information from about two dozen firms that may have given or received gifts such as Super Bowl tickets, golf outings and expensive wine.

Jefferies, which was founded in Los Angeles but has been based in New York since 2002, fired sales trader Kevin Quinn, 38, on Oct. 11 for improper travel and entertainment costs. Quinn's sole client was Fidelity Investments, the world's largest mutual fund company.

The formal inquiry by the SEC may signal that regulators want to curb the industry's gift giving to remove any suspicions that it influences fund executives, said James Angel, a finance professor at Georgetown University.

Opening a formal investigation grants the SEC's enforcement staff the right to subpoena documents and testimony.

Representatives of Jefferies, Quinn, Fidelity and the SEC all declined to comment.

Quinn was dismissed after the firm reviewed his expense reports and found he violated its policy "concerning personal utilization of company property and funds," according to records compiled by the NASD, the industry regulator formerly known as the National Assn. of Securities Dealers.

Jefferies' shares slipped $1.24 to $40.76 on the New York Stock Exchange.

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