Jefferies Group corporate logoSeveral executives and other employees in Jefferies Group Inc.’s prime-brokerage unit threatened to leave the firm in a dispute over issues including a recent restructuring and year-end compensation, people familiar with the matter said.

The dispute led to a series of meetings Tuesday involving Jefferies executives and its global head of prime brokerage, Glen Dailey, the people said. Mr. Dailey, in response to questions from The Wall Street Journal, acknowledged the discussions but said no one was leaving, adding, “family affairs are now in order.” He referred other questions to a firm spokesman, who declined to comment.

Jefferies chief Richard Handler and his wife, Martha, in March 2010.

The episode underscores the shoals financial firms must navigate as they and their workers prepare for what is expected to be the bleakest bonus season since the financial crisis of 2008. The prospect of year-end employee churn is nothing new on Wall Street, but, this year, many firms are under increased pressure financially amid economic turmoil and regulatory clampdowns.

Complicating matters, Jefferies in recent months has faced questions in the aftermath of the collapse of onetime rival MF Global Holdings Ltd. Clients and investors pulled funds from MF Global over concerns about its holdings of European debt and its reliance on volatile funding sources. Jefferies shares tumbled 48% last year amid investor concerns over the firm’s exposure to European debt and use of short-term funding markets. Two weeks ago, Jefferies, led by Chief Executive Richard Handler, said its fourth-quarter profit had slid 23% from a year earlier. Jefferies shares rose 25 cents, or 1.8%, on Tuesday to $14.

Prime brokerage—financing and clearing trades for hedge-fund clients—carries a lower profile than trading or investment banking. But the business is closely watched on Wall Street, because it is highly sensitive to factors such as investor confidence, with clients tending to favor financially strong prime brokers with stable balance sheets. There is no evidence the discord in Jefferies’ prime-brokerage unit is directly tied to questions stemming from MF Global’s troubles. Jefferies’ prime-brokerage business has about 350 clients.

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