Jefferies CEO Rich Handler revealed the company was defrauded by bankrupt auto parts maker First Brands Group, amid a backdrop of financial firms alleging fraud and a DOJ probe. The collapse of First Brands and Tricolor has unsettled Wall Street’s credit market, causing Jefferies’ stock to slump. However, shares rebounded 5% after a previous selloff.

Jefferies President Brian Friedman clarified that the fund impacted by First Brands’ collapse is separate from its investment banking business, with estimated exposure under $100 million. The bank assured investors that any potential loss would be “readily absorbable”. The broader market saw ripples of credit fears in European and Asian trading, before a U.S. banking sector rebound in New York on strong earnings.

Read more at Yahoo Finance: Jefferies CEO says bank was defrauded by auto parts maker First Brands