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UBS healthcare bankers leave for Jefferies

NEW YORK (Reuters) - Jefferies Group Inc has hired away nearly the entire UBS AG healthcare investment banking team, including the group’s head, according to the Swiss bank and legal documents.

At least three dozen UBS employees in its global healthcare banking group and elsewhere left in a “mass resignation” between June 17 and June 21, the Swiss bank said in an arbitration claim with the Financial Industry Regulatory Authority dated June 22.

The development is the latest in a series of departures of investment bankers from UBS, which has been hit hard by the financial crisis, although the Swiss bank has also hired a few bankers over the past few months.

Since 2005, the healthcare group closed more than $567 billion in transactions, bringing in over $1 billion in revenues.

UBS said healthcare group head Benjamin Lorello and Managing Director Sage Kelly became disillusioned with their senior management, and Lorello’s dissatisfaction “peaked in January 2009” when the bank said it would not pay significant bonuses.

It accused Lorello and Kelly of “active conspiratorial assistance” in Jefferies’ “massive, premeditated raid.” It said Lorello and Kelly “abruptly resigned” from UBS to join Jefferies on June 17.

Lorello, who was also vice chairman of UBS Investment Banking Department, will become the global head of investment banking at Jefferies, while Kelly will head healthcare banking there, UBS said in the claim. Lorello and Kelly joined UBS in 1999.

Jefferies was not immediately available for comment.

Separately, UBS got a temporary restraining order against Jefferies and the two bankers to enforce its employment contract, according to a New York court order.

The order, among other things, prevents the bankers from starting work at Jefferies during their 30-day notice period. It also restrains Jefferies from hiring or soliciting for a job any other UBS investment bank employee until July 20.

“UBS obtained this injunction to ensure that Jefferies adheres to legal obligations and standard industry practices and departing UBS employees are held to their applicable notice periods and other legal and contractual obligations,” spokeswoman Kelly Smith said in an emailed statement on Friday.

The bank plans to name a new head of health care banking shortly, she said.

Such mass departures have led to legal battles in the past.

In March, Merrill Lynch & Co, now part of Bank of America Corp, sued Deutsche Bank AG over the hiring of Merrill treasurer Eric Heaton and 11 bankers, in what it called a “raid.”

Last year, UBS won an injunction against startup Vestra Wealth, which had poached 75 of UBS’s wealth management staff in Britain.

Reporting by Paritosh Bansal in New York and Victoria Howley in London; Editing by Tim Dobbyn

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