FOR IMMEDIATE DISTRIBUTION

JEFFERIES AND LEUCADIA CLOSE FORMATION OF JEFFERIES HIGH YIELD TRADING, LLC TO EXPAND HIGH YIELD, DISTRESSED AND SPECIAL SITUATIONS TRADING ACTIVITIES

NEW YORK, April 2, 2007 -- Jefferies Group, Inc. (“Jefferies”) today announced the formation of Jefferies High Yield Trading, LLC (“JHYT”) to conduct, as of today, the secondary market trading activities previously performed by the High Yield division of its principal subsidiary, Jefferies & Company, Inc. (“Jefco”) and three funds that traded on a pari pasu basis with the High Yield desk. The activities of JHYT will be overseen by Richard Handler, the CEO of Jefferies, and the same long-standing team that was previously responsible for these trading activities within Jefco.

JHYT is a registered broker-dealer engaged in the secondary sales and trading of high yield securities and special situation securities, including bank debt, post-reorganization equity, public and private equity, equity derivatives, credit default swaps and other financial instruments. JHYT will commit capital to the market by making markets in high yield and distressed securities and provide research coverage on these types of securities.

"Jefferies High Yield Trading should ultimately provide us with a much enlarged platform to serve our sales and trading client base, as well as allow us to maintain trading in larger amounts as opportunities arise," said Mr. Handler. "With a minimum six-year stated life, Jefferies High Yield Trading should be an increasingly effective part of Jefferies’ overall operations and position us well through changing stages of the credit cycle."

Jefferies and Leucadia National Corporation (“Leucadia”) have each committed to provide up to $600 million of equity capital for the activities of JHYT. Additional capital commitments from third party investors through funds managed by Jefferies bring the total of committed capital to $1.5 billion, which under the agreements between Jefferies and Leucadia may be expanded to $2 billion over time. It is expected that JHYT will enter into a credit agreement that will provide for leverage on a 1:1 basis, thereby providing potential total operating capital of up to $4 billion. JHYT has been formed with a six year life, with an option to extend. Additional detail may be found in Jefferies’ press release dated February 28, 2007.


About Jefferies

Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for 45 years. Headquartered in New York, with more than 25 offices around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities for institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefferies.com).


For further information, please contact:

Tom Tarrant, Jefferies & Company, Inc., 203-708-5989, ttarrant@Jefferies.com


Special Note on Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements about our future and statements that are not historical facts. The forward-looking statements in this release pertain to the future development and expansion of our High Yield secondary market business. Forward-looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain. The use of these forward-looking statements does not infer that the results will be achieved. It is possible that the actual results may differ materially from the anticipated results indicated in these forward-looking statements. Please refer to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2007 for a discussion of important factors that could cause actual results to differ materially from those projected in these forward-looking statements.