Ticonderoga believes that the rapid bankruptcy of MF Global (NYSE:MF) will bring increased regulatory scrutiny on the smaller broker dealers like Jeffries (NYSE:JEF). This could drive tougher capital requirements and risk taking rules, as well as an emphasis on long-term forms of financing, Ticonderoga says. The firm thinks Jeffries’ cost of capital is likely to go higher, and has concerns about the company’s long-term profitability.
