Richard B. Handler, head of the Jefferies Group - and the highest-paid CEO of a major Wall Street bank last year, sold a large stake in the company to pay off a personal debt - 2 million shares, valued at $25.2 million, to the bank’s largest shareholder, according to a securities filing. News of the sale spooked JEF shareholders on a day when the market was already experiencing a big sell-off.  The move sent shares of Jefferies tumbling more than 11%, before they recovered to close down 3.7% - about in line with the broader market.  Internal Memo to Employees. Mr. Handler sent a short memo to his employees explaining his reason for the sale - the transaction was tied to "significant tax payments" that he owed because of recently vested Jefferies stock.  He said he had previously taken on debt to pay the tax bill because, as CEO, he had been blocked from selling shares.  This was an unfortunate time to sell Jefferies stock - or just about any stock for that matter.  Mr. Handler also noted in his memo that his shares were sold to the Leucadia National Corporation - the bank’s largest shareholder, which added to the intrigue.  This low-profile conglomerate now holds a 26% stake. The sale also surprised the staff at Jefferies, which, like many Wall Street banks, is known for a staunch stock-ownership culture where sales of the company’s shares are frowned upon inside the bank. All financial services shares have been hard hit this year, but Jefferies has fallen more than most - having dropped more than 50% year-to-date.  By comparison the S&P 500 index is down about 10%.  Goldman, in a research report, said it saw “continued downside” in Jefferies stock, and has a sell rating on the company. Handler's Financial Position. Mr. Handler’s sale had Wall Street trading floors abuzz on Thursday.  Mr. Handler, 50, is one of the highest paid CEO's not only in finance, but in the country.  In 2010, he was granted total compensation valued at $47.3 million, which included a bonus for 2009 and stock awards for coming years.  In contrast, Goldman CEO Lloyd Blankfein made $13.2 million in 2010. Mr. Handler, who has been the CEO for the last decade, is the largest individual shareholder in Jefferies and had not sold any of his stock since 2006.  Even after his sale of 2mn shares, he still owns about 12 million shares, or 6% of the company's outstanding float.  Those shares are worth $148 million based on Thursday’s closing price. Mr. Handler, a charismatic leader, is a former trader at the investment bank Drexel Burnham Lambert, which collapsed in 1990 in the turmoil of the junk-bond market.   [Dealbook, 9/22/11]