Jordan Chirico, a former portfolio manager at Jefferies Financial, has resigned from his new role at restaurant franchiser FAT Brands, just two weeks amid serious fraud allegations linked to his previous position, according to a report by Bloomberg.
Chirico stepped down from his role as head of debt capital markets to focus on defending himself against litigation initiated by 352 Capital, a Jefferies fund, accusing him of orchestrating a $100m-plus investment in a Ponzi-like scheme.
The report cites a a FAT Brands spokesperson as confirming that Chirico joined the company in early July to work on its balance sheet. As of now, no replacement has been announced.
The lawsuit alleges that Chirico directed the purchase of a substantial quantity of bonds from a company that falsely claimed to operate thousands of filtered water vending machines. It is alleged that Chirico was aware these machines did not exist and used 352’s funds to support the fraudulent company, partly to recover his own investment.
The water vending machine company, Water Station Management, and its founder Ryan Wear, along with several associates, are also named in the lawsuit.
Jefferies is now in the process of winding down trading positions at the 352 fund, which specialised in asset-backed bonds.
