Jefferies Financial Group (JEF) CEO Rich Handler said that the bank was“defrauded” by the auto supplier First Brands Group, which went bankrupt in late September after its creditors opened probes amid concerns over potential financial irregularities.

Shares of Jefferies were up nearly 4% in afternoon trading. The stock had closed down 11% on Thursday.

“So, I'll just say this is us personally, we believe we were defrauded, okay, from a company. I personally talk to a lot of investors, a lot of CEOs, a lot of operating businesses. I think the environment is generally pretty darn good. I don't see this as the canary in the coal mine,” Handler said, according to a filing by Jefferies on Friday.

“I'm not saying there aren't other issues like this. There was one yesterday that one of our competitors had to deal with. I think these things happen,” he added.

Western Alliance (WAL) disclosed on Thursday that a borrower failed to provide first-position collateral loans, triggering fraud concerns and adding volatility to the markets, with shares of U.S. regional banks slumping.

Earlier in the week, Jefferies said that its estimated financial losses from the bankruptcy of First Brands were relatively low. Jefferies' investments in the troubled auto parts firms effectively comprise $43 million, or 5.9%, of Point Bonita's accounts receivable purchased from First Brands and a small interest in First Brands' bank loans through Jefferies Finance's Apex platform.

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