Sage Kelly is the managing director of the healthcare practice at investment bank Jefferies, and scandalous accusations made against him have come out as part of a divorce and custody filing that recently became the talk of Wall Street. Drugs and sex are involved, so other members of the team needed to take action.
Richard B. Handler, the chief executive of Jefferies, wrote in a memo to clients late last week, which was also signed by Brian Friedman, the chairman. “We went to our partners in health care investment banking yesterday afternoon and said, ‘The two of us are going to go take a drug test, and do you want to join us?’ ”
Kelly’s wife Christina accused him of abusing “alcohol, cocaine, mushrooms, Special-K, heroin” and other drugs like ecstasy. She said he once become “so drunk at the annual party that he hosts for members of his department at Jefferies & Company that he began to urinate” and she went on to list various Jefferies employees and clients that she said did drugs with him.
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Handler made sure that he demonstrated the integrity of his team:
“Our global head of investment banking and the three other investment bankers mentioned in the custody-case papers as alleged serial drug abusers stood up and each said, ‘I do,’ ” when he asked if they wanted to join him for the drug test, he wrote in his memo. “Every one of our other health care managing directors then volunteered to come with us. They were not even mentioned in any document, but they chose to do this to show solidarity with their partners and also prove that suggestions of rampant drug use are pure fabrication.”
At this point, who knows if the allegations made by Kelly’s wife are true. More likely than not, this is the result of an ugly custody battle and will blow over, in terms of business for Jefferies. Kelly submitted a videotape of his wife snorting cocaine as an argument for custody of their children, and she failed a drug test and is seeking drug counseling. So, this is messy.
Handler wrapped up is memo with this:
“We expect you will hear more lies about us and even hear from reporters who would like to dredge up old news because, at this point, there is absolutely nothing new to write about the unfortunate custody proceeding. Good news does not sell newspapers, but you, our clients, know us and know how we do business.”
