Jefferies CEO, chairman take drug tests

(Reuters) - Jefferies Group LLC said on Friday Chief Executive Rich Handler, Chairman Brian Friedman and executives at its healthcare division were tested negative for drug usage, after one of its investment banking head was accused of drug abuse.

Sources told Reuters on Thursday that Sage Kelly, the head of Jefferies' healthcare investment banking group, is taking a leave of absence from the firm as he wages a bitter divorce battle with his estranged wife.

Kelly's voluntary leave follows a series of reports in New York tabloids and websites, describing how his wife Christina accused him of drug abuse and erratic behavior in an attempt to gain primary custody of their two children.

"They chose to do (the drug tests) to show solidarity with their partners and also prove that suggestions of rampant drug use are pure fabrication," Handler and Friedman said in letter posted on the company's website. (http://bit.ly/1tp64lz)

"The media and some of our major competitors have piled on, using categorically denied allegations made by one individual as the basis to launch a judgment of everything Jefferies."

Jefferies, whose healthcare investment banking group has been among its best recent performers, is a unit of Leucadia National Corp .

(Reporting By Neha Dimri in Bangalore; Editing by Joyjeet Das)