Jefferies Sued by Fund Investors Alleging Water Firm Fraud (1)

Jefferies Financial Group Inc. has been hit with an investor class action lawsuit over bond purchases made by its 352 Capital fund in a water vending machine firm that federal prosecutors have called a scam.

According to the complaint filed in New York state court, Leucadia Asset Management’s 352 Capital poured millions of dollars into bonds issued by Water Station Management, which the government and Jefferies itself have alleged was a fraud. Jefferies, of which Leucadia is the asset management arm, is suing former 352 portfolio manager Jordan Chirico, who was also indicted last year.

In the latest lawsuit, ...