SocGen Deal for Bache Illustrates Commodity-Trading Woe

By CHRISTIAN BERTHELSEN and TATYANA SHUMSKY May 26, 2015 7:07 p.m. ET 0 COMMENTS Société Générale SA is picking apart Bache—a commodities house and the last link to a historic Wall Street name—in another sign of how trading in raw materials has fallen on hard times. Disappointed in Bache’s poor performance, executives at Jefferies LLC put the unit on the block, eliciting interest from the French bank. But SocGen is just taking some pieces of the business for a nominal sum, setting off a scramble among Jefferies Bache’s employees and clients, people familiar with the situation said. SocGen anticipates taking more than 300 of Bache’s top clients by revenue, which include producers and end users of everything ranging from crude oil to aluminum and wheat, said a person familiar with the French bank’s plans. On the list as well are other financial institutions that act as counterparties. Many brokers on Jefferies Bache’s energy team are moving to U.K. brokerage ED&F Man Capital Markets after SocGen decided to absorb just a third of client assets, the people said. Metals brokers have approached Australian bank Macquarie Group Ltd. and R.J. O’Brien & Associates LLC, a brokerage based in Chicago, these people said. … continue reading

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