Jefferies Increase Stake in Market Market KCG to 20%

Jefferies Group LLC boosted its stake in KCG Holdings Inc. 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., 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.

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