Fox Business Network’s (FBN) Senior Correspondent Charlie Gasparino reports, “as many as five clients have suspended business dealings, ”with Jefferies Group LLC (NYSE:JEF) after allegations against Investment Banker Sage Kelly were made by his wife in recent divorce filings.  Gasparino also reports, “one client cited a ‘mortality clause’ in their contractual dealings with Jefferies.”

On Jefferies losing clients due to Investment Banker Sage Kelly’s recent allegations against him:

“Investment bank Jefferies Group LLC (NYSE:JEF) has lost as many as five clients in the wake of ugly revelations related to a messy divorce case involving one of the firm’s top health care bankers, the FOX Business Network has learned. Meanwhile, the banker, Sage Kelly, has taken a leave of absence from the firm, according to a memo distributed by Jefferies and obtained by FOX Business. Ben Lorello, head of investment banking, will oversee the healthcare team in the interim.  People inside Jefferies tell FOX Business that the former clients of the health care team suspended their relationships with Jefferies after Sage Kelly’s wife Christina, alleged in a deposition that her banker husband abused drugs and engaged in wild sex binges in exchange for business from clients. Kelly, who heads the firm’s health care group, vehemently denies the charges, but these people say  that one client cited a “morality clause”  in their contract with Jefferies for its decision.”

Jefferies Richard Handler