Jefferies

Investment banks balance two incompatible businesses. They advise on mergers while trading the same securities. When a bank advises on fair value, it profits again when the buyer trades bonds afterward. The bank profits twice. The client can't trust the price. Jeffrey's positioned itself as an independent investment bank separate from universal banking conflicts. Jeffrey's became the first investment bank to say no to trading. We advise clients, we don't trade. We don't profit from the deals we arrange after closing. The separation sounds like losing money. It actually created transparency. A client asking for a fairness opinion could believe Jeffrey's because Jeffrey's had no reason to lie. There was no trading desk waiting to short the stock when the deal closed.