July 10 (Bloomberg) -- UBS AG, the largest Swiss bank by assets, and Jefferies Group Inc. said they “amicably resolved” a lawsuit in which UBS accused Jefferies of raiding the firm for 36 health-care investment bankers led by Benjamin Lorello.

UBS withdrew a June 22 New York Supreme Court lawsuit and a related arbitration case against Jefferies, said Doug Morris, a UBS spokesman, and Tom Tarrant of Jefferies in separate interviews. A court order barring New York-based Jefferies from recruiting employees of Zurich-based UBS was dropped, they said. They declined to elaborate.

UBS, the European bank with the highest losses from the credit crisis, has been battling banker defections after saying in January it cut the 2008 bonus pool by more than 80 percent. The announcement prompted Lorello and Sage Kelly, another top health-care banker, to become “disillusioned” with the bank and start planning a mass defection, UBS said in the suit.

The health-care team brought in more than $1 billion of revenue since 2005 and ranked among the top three in the world, UBS said in the suit. Lorello and Kelly were among 36 bankers -- almost the entire team focused on health-care companies worldwide -- to resign from June 17 through June 21.

The team planned to join Jefferies after weighing moves to Deutsche Bank AG and Barclays Plc, UBS said. Robert Anello, a lawyer who has represented Lorello in the past, couldn’t be immediately reached for comment.

Lorello made a similar move in 1999, when he brought his team to UBS from Citigroup Inc.

Among Lorello’s past clients is Richard Scrushy, the former chief executive officer of HealthSouth Corp., who was acquitted in 2005 of charges that he ran an accounting fraud that almost bankrupted the company.

More recently, Lorello’s team has advised clients including Eli Lilly & Co. on its $6.3 billion purchase of ImClone Systems Inc. last year.

The case is UBS Securities LLC v. Jefferies & Co., 09- 108820, New York State Supreme Court (Manhattan).

To contact the reporter on this story: Zachary R. Mider in New York at zmider1@bloomberg.net

Last Updated: July 10, 2009 13:40 EDT