June 25 (Bloomberg) -- UBS AG’s head of health-care investment banking, Benjamin Lorello, resigned with a team of bankers who are planning to join Jefferies Group Inc., two people with knowledge of the matter said.

Lorello left the biggest Swiss bank by assets, his employer since 1999, and plans to join a New York-based investment bank that specializes in serving mid-sized companies. His departure, along with Sage Kelly and “a number” of other health-care bankers, was confirmed today by UBS spokesman Doug Morris, who said he couldn’t discuss Lorello’s future plans.

UBS bankers are leaving after the bank said in January it cut its bonus pool for 2008 by more than 80 percent. Bankers to announce departures this year include Chris Ryan, head of credit fixed income; Jeffrey Sine, head of technology, media, and telecommunications investment banking; and Rob Rankin, head of investment banking in the Asia-Pacific region.

Tom Tarrant, a Jefferies spokesman, declined to comment.

Lorello is known on Wall Street for advising Richard Scrushy, the former chief executive officer of HealthSouth Corp. Scrushy was acquitted in 2005 of charges that he ran an accounting fraud that almost bankrupted the company. Scrushy was found liable for $2.88 billion in a civil trial last week.

Lorello took HealthSouth Corp. public in 1986 while he was at Salomon Smith Barney, now a Citigroup Inc. unit, and continued to advise the firm after joining UBS.

Shareholder Lawsuit

UBS is a defendant in a shareholders’ class-action lawsuit that seeks billions of dollars from the investment bank, claiming it was involved in the HealthSouth fraud. U.S. District Judge Karon Bowdre in Birmingham, Alabama, denied UBS’s bid to throw out the case earlier this year and certified the case as a class action, meaning thousands of shareholders can sue as a group.

Lorello has denied any wrongdoing in the past and couldn’t immediately be reached today. Robert Anello, a lawyer who represents Lorello in the HealthSouth lawsuit, didn’t immediately return a call for comment.

To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net; Zachary R. Mider in New York at zmider1@bloomberg.net

Last Updated: June 25, 2009 11:58 EDT