Jefferies Increase Stake in Market Market KCG to 20%

Jefferies Group LLC boosted its stake in KCG Holdings Inc. (KCG) to 20 percent as the investment bank purchased an additional 6 million shares in the market maker it helped rescue in 2012.

Jefferies, a unit of Leucadia National Corp. (LUK), acquired the shares for $11 each, bringing its total holding to 22.5 million shares, according to a regulatory filing today. Jersey City, New Jersey-based KCG was formed last year when Getco LLC merged with Knight Capital Group Inc.

Knight was on the brink of bankruptcy from trading losses when it received $400 million through the sale of convertible shares in a deal arranged by New York-based Jefferies. Knight’s computers had flooded the market with unintended trades, sending dozens of stocks into spasms.

KCG rose 4.9 percent to $12.37 at 12:40 p.m. in New York. The shares have climbed 18 percent since Knight’s merger with Chicago-based Getco, a high-frequency trading firm. Jefferies held a 14 percent stake in KCG as of November 25, according to filings at the time.

Spokesmen for the two companies didn’t immediately respond to requests for comment.

To contact the reporter on this story: Zeke Faux in New York at zfaux@bloomberg.net

To contact the editor responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net

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