Responsible for Most of Jefferies’ Loss, Clore Says

The tribulations of British investor Alan E. Clore were responsible for almost all of the up to $10-million loss that the Jefferies & Co. securities firm incurred in October because of the stock market plunge, it was revealed Tuesday.

KaiserTech Chairman Clore disclosed in a filing with the Securities and Exchange Commission that he placed orders with Jefferies in October for $17.2 million of KaiserTech stock but never paid for the shares.

In addition, Jefferies purchased more of Clore’s KaiserTech stock in October when the investor defaulted on a margin loan, leaving the Los Angeles securities firm with nearly 1.4 million shares of KaiserTech stock, or about 3% of the company’s common stock.

If the KaiserTech stock were sold at the Tuesday’s closing price at $10 per share on the New York Stock Exchange, Jefferies would incur a roughly $8-million loss. A total of 949,700 shares were purchased for Clore by Jefferies between Oct. 2 and Oct. 20 at prices ranging from $15.4312 to $20.406, according to the filing.

Jefferies’ potential loss from the sale of that stock was included in the previously disclosed estimated loss for October of between $5 million and $10 million, said Jerry M. Gluck, Jefferies’ general counsel and senior vice president. The total loss is not yet known but “it will not be more than $10 million,” Gluck said.

However, the stock will not be sold until at least Dec. 31 or until Clore agrees to sell his stake in KaiserTech under an agreement between Clore and Jefferies, the filing disclosed. The standstill period could be extended to Jan. 31.

Clore became chairman of KaiserTech earlier this year after a prolonged takeover battle for its primary operating subsidiary, Oakland-based Kaiser Aluminum & Chemical. But Clore ran into trouble after the Oct. 19 stock market crash. Declining stock prices put Clore into default on loans secured by his KaiserTech stock.