By Peter Rudegeair And Angela Chen 

Jefferies Group LLC is trading commodities for currencies.

The investment bank unit of Leucadia National Corp. said on Thursday that it agreed to sell its Bache commodities and financial derivatives unit to Société Générale SA. It separately agreed to purchase Faros Trading LLC, a foreign-exchange brokerage that was majority-owned by FXCM Inc. Financial terms of the deals weren't disclosed.

Jefferies's announcements underscore the changes in business mix that Wall Street banks have made in recent years to adjust to changes in regulations and market conditions. Jefferies purchased Bache for about $430 million from Prudential Financial Inc. in 2011 with the aim of expanding its presence in commodities and financial futures trading, an area dominated by larger rivals like J.P. Morgan Chase & Co. and Goldman Sachs Group Inc.

Those activities, especially trading in physical commodities like aluminum, have become more controversial following a November report from the U.S. Senate Permanent Subcommittee on Investigations that looked at whether banks unfairly influenced prices.

Jefferies escaped the level of scrutiny that larger banks faced in this area, but executives still found it difficult to grow the business profitably given the regulatory and competitive environment. The New York firm said in December that was in talks about a possible sale of the business.

The purchase of the Bache unit, once a storied name on Wall Street, was part of Jefferies's long transformation from a boutique focused on stock trading ad high-yield bonds into a full-service investment bank that helps clients raise money and trade a variety of securities and derivatives.

The sale of Bache to SocGen is likely to close in the second quarter and will lead to $66 million in one-time costs. Jefferies said exiting the business is expected to add to its earnings in the future.

While commodities trading has lost some of its appeal for Jefferies, foreign-exchange trading has become a bright spot for banks in recent quarters as policy changes by central banks around the world have created more volatility, driving customer activity and earning banks more in commissions.

Fred Orlan, Jefferies' global head of fixed income, said the deal to buy FXCM's institutional foreign exchange brokerage is part of an effort to expand its capabilities in that market, especially in light of the recent currency volatility. Faros Chief Executive Ray Kamrath will become global head of foreign exchange at Jefferies where its existing foreign exchange business and Faros will operate as a single team.

Leucadia offered a $300 million rescue package to FXCM earlier this year after a surprise surge in the Swiss franc led to big client losses following the decision by the Swiss National Bank to eliminate the cap on the currency. The company said in February that it has begun to receive payments from FXCM and expects to recover more than a quarter of its investment within three months of the deal's closing.

A spokeswoman for FXCM said the sale of Faros was consistent with the company's strategy to focus on its retail customers.

Leucadia purchased Jefferies two years ago and in January agreed to pay $70 million to former shareholders to settle claims it underpaid when it bought the investment bank.

Shares of FXCM and Leucadia were each down less than 1% in morning trading.

Write to Angela Chen at angela.chen@dowjones.com

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