Jefferies Financial Group has written down its financial exposure to collapsed US car parts supplier First Brands to zero, taking a $10m (£7.5m) loss as a result.
In the bank’s first-quarter earnings, its asset management division reported a final $10m pre-tax loss that fully writes off its direct exposure to First Brands. The bank’s losses rise to $17m when adjusting for Jefferies’ exposure to British lender Market Financial Solutions, which went into administration in February.
“We have $17m of losses related to Market Financial Solutions and First Brands after adjusting for compensation and taxes,” said Richard Handler, Jefferies’ chief executive, and Brian Friedman, president, in the earnings release. “Our direct exposure to First Brands is now zero.”
The $10m hit follows Jefferies reporting a $30m loss linked to First Brands in its last quarter earnings report. The loss was tied to Jefferies’ stake in Point Bonita, an investment fund that provided financing to First Brands.
“Management is disappointed and takes full responsibility for the losses already recognised and that may be absorbed over time in respect of First Brands, all of which are manageable,” both Handler and Friedman said.
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The losses from its association with First Brands come as it is being sued by Western Alliance Bank in a dispute over its association with the collapsed auto parts supplier. The lawsuit alleges breach of contract and fraud over a loan made to the Point Bonita fund.
First Brands collapsed last year, with its financial difficulties compounded by the earlier bankruptcy of subprime auto lender Tricolor Holdings. The failures rattled debt investors and heightened scrutiny of the private credit market.
In November last year, it was also announced that Jefferies was being investigated by the Securities and Exchange Commission over its links to First Brands.
Overall, in its first quarter of 2026 earnings release, Jefferies reported net revenues of $2.02bn, down from $2.07bn in the previous quarter. Net earnings attributable to common shareholders were $156m.
