According to reports, the U.S. SEC is investigating whether Jefferies adequately disclosed its risk exposure to the bankrupt auto parts company First Brands

The Financial Times reported that the U.S. Securities and Exchange Commission (SEC) is investigating the relationship between investment bank Jefferies (JEF.US) and bankrupt auto parts supplier First Brands. The report indicates that authorities are requesting information from Jefferies to understand whether it adequately disclosed the risk exposure to First Brands to investors in its affiliated funds.

In October, Jefferies stated that its risk exposure to First Brands, which filed for bankruptcy protection in September, is limited and that it can easily absorb any potential losses. Jefferies' Leucadia Asset Management fund holds approximately $715 million in receivables related to First Brands through its credit fund Point Bonita. The Financial Times reported that authorities are investigating whether Point Bonita investors were aware of the situation.

Earlier this month, UBS stated that it is closing its hedge fund division O'Connor due to losses resulting from its exposure to First Brands