When it comes to Wall Street grudge matches, this one is sure to rank right up there.
The New York Times reports that two years ago, Sean Egan, the Managing Director of credit ratings agency Egan-Jones, cut the rating on the investment bank Jefferies and criticized the firm on CNBC, Fox Business Network and Bloomberg Television and elsewhere.
Egan called Jefferies 'unsustainable', and his comments sent the firm’s stock into a tailspin, raising concerns that Jefferies might have to file for bankruptcy.
At the time, Wall Street was already on edge. MF Global, the commodities brokerage firm, had just filed for bankruptcy.
Jefferies CEO, Richard Handler, went on the counterattack. He argued that the analyst’s report was littered with inaccuracies, noting that it said 77% of the firm’s shareholder equity was invested in the same bonds that took down MF Global while failing to mention that Jefferies had hedged the position, which more than offset its exposure.
The storm clouds eventually lifted, Jefferies stock rebounded, and Handler thought he had seen the last of Egan.
But a few weeks ago, Handler received an email that stopped him in his tracks.
'I would like to apologize for harm caused to you,' Egan wrote.
To access the complete New York Times article hit the link below:
image: © SMN