Boutique brokerage Jefferies Group ( JEF) has become the latest firm to be undercut by a dicey trading environment in the fourth quarter. Jefferies on Monday said it could take a $24 million hit due to bad bets it made with its own money. The broker, which focuses on small to mid-sized companies, said in a statement that it made fourth-quarter bets via its proprietary trading that went badly. Proprietary trading at investment banks and brokers is an area that is meant to generate profits for the firm by using its own money and savvy to benefit from trading opportunities. The news sent Jefferies' shares down more than 13% in Monday morning trading, though the stock more recently was off 8.1% to $18.18. The firm has a market capitalization of about $2.2 billion. Lingering uncertainty in the debt markets since last summer continued to wreak havoc on credit spreads, particularly in November. "The extremely challenging environment that began in the summer continued in the fourth quarter," said CEO Richard Handler, in a statement. Jefferies is expected to report its complete fourth-quarter results Jan. 23. Jefferies also said that it shuttered two principal trading accounts that generated the losses and let go of some of its proprietary desk employees. Jefferies isn't alone in having a tough go at it in proprietary trading. Lehman Brothers ( LEH), Bear Stearns ( BSC) and Morgan Stanley ( MS) all reported that a seizing-up in credit proved challenging for their firms as well. The bad news is driving Jefferies' Handler to take the mea culpa route paved by CEOs John Mack at Morgan Stanley and James Cayne at Bear Stearns, who said they would forego their annual performance bonuses. Handler said that despite the poor bets in trading, Jefferies is still on strong financial footing. "We continue to have substantial liquidity and we are not seeking any third-party capital infusion," he said.