The Jefferies Group has cut certain European sovereign debt positions in half. The move comes three days after detailing its exposure in this area to discredit speculation that it is overexposed to the region. Over the weekend, the firm reduced its long positions in the sovereign debt of Portugal, Italy, Ireland, Greece and Spain by $1.1bn. Its short positions were cut by the same amount, for a total reduction of 49.5% of its gross exposure to the debt of those countries. The company said that despite the moves, it had experienced “no meaningful profit or loss on today’s trading activity or our remaining positions.” Last week, Jefferies went on the offensive after Egan-Jones, a credit ratings agency, cut its outlook on the firm, citing exposure to European sovereign debt. The next morning, shares of Jefferies tumbled about 20%. Jefferies then made an unusually transparent statement on the amount and type of its European sovereign debt holdings. In the statement, the firm said that despite having more than $2.4bn in gross exposure, its hedging of those securities with short positions meant it only had $9mn in net exposure. After the reductions on Monday, the firm’s net exposure to the debt of those countries was $59 million, or 1.7% of shareholder equity, according to the latest statement. [Dealbook, 11/7/11]