Jefferies Fund Sued by Investors Over First Brands Collapse

Jefferies Financial Group Inc. was sued by investors in one of its funds over losses related to its holdings in First Brands Group, a now-bankrupt auto parts supplier at the heart of an alleged multibillion-dollar fraud scheme.

In a suit filed Tuesday in New York, two British Virgin Islands investment companies accused Jefferies’ Leucadia Asset Management arm and its Point Bonita Capital trade-finance fund of defrauding them by misrepresenting the terms of their purchase of First Brands receivables.

First Brands founder Patrick James and his brother Edward were indicted last month by federal prosecutors, who claim the two stole ...