Health Care Bankers At Jefferies and Co. Take Drug Tests To Snuff Out Divorce Scandal
November 10, 2014
By Riley McDermid, BioSpace.com Breaking News Staff
The story of a well-known health care and biotech investment team at boutique bank Jefferies and Co. took another bizarre twist recently, when its chief executive, frustrated with recent press accounts alleging extensive drug use at the unit, spontaneously volunteered the group for drug tests.
“We went to our partners in health care investment banking yesterday afternoon and said, ‘The two of us are going to go take a drug test, and do you want to join us?’” recounted CEO Richard Handler in a memo sent to clients Dec. 31.
The memo was also signed by Brian Friedman, the chairman of Jefferies. It was designed to stave off growing concern that some of the accusations made against a managing director in its health care practice as part of a divorce and custody filing, might be true.
Now, it is the drug test that has Wall Street, and much of biotech, buzzing. Not that there is anything to them, said Jefferies executives.
“Suggestions of rampant drug use are pure fabrication,” wrote Handler and Friedman in the memo. “The two of us can of course attest that all tests came back drug-free.”
Jefferies MD Sage Kelly, has been accused by his wife, Christina, of indulging in “alcohol, cocaine, mushrooms, Special-K, heroin” as well as other drugs like ecstasy.
The filing also dragged the firm itself into the accusations, saying Kelly was once “so drunk at the annual party that he hosts for members of his department at Jefferies & Company that he began to urinate”—and it included a list of Jefferies employees with whom both Kellys had used illegal drugs.
For his part, Jefferies’s larger-than-life CEO said he wasn’t going to take those allegations lying down.
“Our global head of investment banking and the three other investment bankers mentioned in the custody-case papers as alleged serial drug abusers stood up and each said, ‘I do,’ ” when he asked if they wanted to join him for the drug test, said Handler in the memo.
“Every one of our other health care managing directors then volunteered to come with us,” he said. “They were not even mentioned in any document, but they chose to do this to show solidarity with their partners and also prove that suggestions of rampant drug use are pure fabrication.”
Anyone with any additonal questions will just have to hold on to them for now, said the firm.
“We are embarrassed that we even have to discuss these matters, but this should put to rest the heart of the allegations about our firm,” Handler and Friedman said. “Sometimes truth does come in a jar.”