UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1997 Commission file number 1-7421
-------------- --------
PIPER JAFFRAY COMPANIES INC.
(Exact name of Registrant as specified in its charter)
Delaware 41-1233380
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Piper Jaffray Tower, 222 South 9th Street, Minneapolis, Minnesota 55402
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 612-342-6000
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of March 31, 1997, 18,675,057 shares of the Registrant's common stock were
issued and outstanding.
<PAGE>
PIPER JAFFRAY COMPANIES INC.
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Financial Condition 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 6. Exhibits and Reports on Form 8-K 18
Signatures 19
Index of Exhibits 20
Exhibits 21
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PIPER JAFFRAY COMPANIES INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Amounts)
March 31, September 30,
1997 1996
------------ ------------
ASSETS (unaudited)
Cash ($6,710 and $1,863, respectively, which was
required to be segregated under federal and other $ 45,896 $ 23,406
regulations)
Receivable from other brokers and dealers 51,947 87,427
Receivable from customers 569,572 520,489
Trading securities owned, at market 219,183 105,540
Securities purchased under agreements to resell 50,781 12,259
Investments pursuant to mortgage-backed bonds 42,583 44,064
Office equipment and leasehold improvements,
at cost less accumulated depreciation of $57,712 30,534 30,185
and $52,546, respectively
Deferred income tax asset 22,117 21,215
Other assets 86,552 79,155
============ ============
$ 1,119,165 $ 923,740
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings 295,828 183,320
Checks and drafts payable 50,064 70,628
Payable to other brokers and dealers 144,306 109,776
Payable to customers 135,191 160,930
Securities sold under agreements to repurchase 31,984 -
Trading securities sold, but not yet purchased,
at market 69,592 27,472
Mortgage-backed bonds payable 43,482 45,333
Employee compensation and related taxes 73,300 81,740
Federal and state income taxes 6,852 -
Other accounts payable and accrued expenses 86,912 77,716
------------ ------------
937,511 756,915
Shareholders' Equity
Preferred stock, $1 par value; authorized,
300,000 shares; none issued and outstanding - -
Common stock, $1 par value; authorized,
40,000,000 shares; 18,675,782 and 18,676 18,198
18,197,725 issued, respectively
Additional paid-in capital 27,267 19,432
Retained earnings 135,724 129,201
Less treasury stock, at cost; 725 and 467 shares, (13) (6)
respectively
------------ ------------
181,654 166,825
============ ============
$ 1,119,165 $ 923,740
============ ============
See accompanying notes to consolidated financial statements.
<PAGE>
PIPER JAFFRAY COMPANIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
------------------------ --------------------
1997 1996 1997 1996
------------------------ --------------------
REVENUES:
Commissions $ 53,614 $ 48,744 $ 100,029 $ 91,390
Profits on principal 40,435 42,614 84,429 83,529
transactions
Investment banking 28,990 19,929 49,927 44,952
Interest 12,528 10,076 24,818 19,539
Asset management fees 9,046 9,561 17,951 19,135
Other 8,669 6,668 14,957 11,573
------------------------ --------------------
Total revenues 153,282 137,592 292,111 270,118
EXPENSES:
Employee compensation 93,709 84,958 179,745 166,444
Floor brokerage and clearance 2,752 2,301 5,012 4,405
Interest 6,144 4,386 12,299 7,429
Occupancy and equipment 10,316 8,790 19,733 16,930
Communications 6,578 4,704 12,124 9,502
Travel and promotional 6,440 4,183 10,691 7,801
Other operating expense 15,582 32,257 37,763 50,686
------------------------ --------------------
Total expenses 141,521 141,579 277,367 263,197
------------------------ --------------------
Income (loss) before income 11,761 (3,987) 14,744 6,921
taxes
Income taxes (benefit) 4,292 (1,693) 5,455 2,561
------------------------ -------------------
Net income (loss) $ 7,469 $ (2,294) $ 9,289 $ 4,360
======================== ====================
Net income (loss) per common
and common equivalent share
(primary and fully diluted) $ .39 $ ( .13) $ .49 $ .24
Weighted average number of
common and common equivalent
shares outstanding 19,323 17,947 18,994 18,235
Dividends per share $ .075 $ .075 $ .15 $ .15
See accompanying notes to consolidated financial statements
<PAGE>
PIPER JAFFRAY COMPANIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six months ended
March 31,
-----------------------------
1997 1996
------------- --------------
Operating activities:
Net income $ 9,289 $ 4,360
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation amortization 5,173 3,462
Deferred income taxes (902) 10,477
(Increase) decrease in:
Net receivable from customer (74,822) (52,490)
Net trading securities (71,523) (49,724)
Net repurchase agreements (6,538) -
Other 1,806 17,316
Increase (decrease) in:
Net payable to other brokers and dealers 70,010 (51,350)
Checks and drafts payable (20,564) 5,192
Employee compensation (8,440) (2,728)
Federal and state income taxes payable 6,852 (19,136)
------------- --------------
Net cash used in operating activities (89,659) (134,621)
Financing activities:
Net change in:
Short-term borrowings 112,508 140,104
Mortgage-backed bonds payable (1,851) (5,203)
Investments and funds pursuant to 1,481 5,392
mortgage-backed bonds
Payments made on capitalized lease obligations - (422)
Net common stock issued 11,077 9,620
Treasury shares repurchased (2,771) (1,195)
Dividends paid (2,766) (2,676)
------------- --------------
Net cash provided by financing 117,678 145,620
activities
Net cash used for purchase of office equipment
and leasehold improvements (5,529) (5,182)
------------- --------------
Net increase in cash 22,490 5,817
Cash at beginning of period 23,406 17,345
============= ==============
Cash at end of period $ 45,896 $ 23,162
============= ==============
Supplemental disclosure of cash flow information:
Cash paid (refunded) during the six months ended for:
Interest $ 11,314 $ 7,615
Income taxes $ (14,207) $ 19,231
See accompanying notes to consolidated financial statements.
<PAGE>
PIPER JAFFRAY COMPANIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED MARCH 31, 1997 AND 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements of Piper Jaffray Companies
Inc. and its subsidiaries (the "Company") have been prepared in conformity with
generally accepted accounting principles and should be read in conjunction with
the Company's Annual Report for the year ended September 30, 1996. The results
of operations for the six months ended March 31, 1997, are not necessarily
indicative of the results to be expected for the year ending September 30, 1997.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The consolidated statement of financial condition as of March 31, 1997 and the
other consolidated financial information for the period ended March 31, 1997 and
1996, is unaudited, but management of the Company believes that all adjustments
(consisting of normal recurring accruals) necessary for a fair statement of the
results of operations for the periods have been included.
Certain reclassifications have been made to the September 30, 1996 balance sheet
to conform to the classifications used in the current period. These reclassifi-
cations had no effect on stockholders' equity as previously reported.
Net income (loss) per common and common equivalent share is calculated by
dividing net income (loss) by the weighted average number of common shares and
common share equivalents outstanding, which includes the dilutive effect of all
outstanding stock options. For periods in which a net loss is reported, the
effect of common share equivalents is excluded from the calculation of per share
amounts as they are anti-dilutive.
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards (SFAS) No. 128, Earnings Per Share which is effective for
financial statements for both interim and reporting periods ending after
December 15, 1997. Early adoption of the statement is not permitted. The Company
has determined that the adoption of the statement will not have a material
impact on earnings per share calculations.
2. NET CAPITAL REQUIREMENTS
At March 31, 1997, Piper Jaffray Inc. (Piper Jaffray), the Company's
broker-dealer subsidiary, had net capital under applicable regulations of $111.5
million or 19% of aggregate debit balances and $99.8 million in excess of the
minimum required net capital.
3. LITIGATION AND CONTINGENCIES
The Company is currently a defendant in lawsuits and arbitrations and is subject
to regulatory inquiries related to various funds or assets managed by Piper
Capital Management Incorporated (Piper Capital), the Company's asset management
subsidiary. In addition, management is aware of unasserted claims which may
contain similar allegations. The Institutional Government Income Portfolio
remains the subject of an investigation conducted by the Securities and Exchange
Commission. The Company is also a defendant in a case involving an underwriting
for Bonneville Pacific Corporation by Piper Jaffray. The Company intends to
defend or, in some cases, negotiate to settle these actions. It is impossible to
predict the outcome of these actions, and, at the present time, the effect of
these actions on the consolidated financial statements cannot be determined.
Accordingly, no provision for losses that may result has been recorded in the
consolidated financial statements. However, the aggregate cost of litigation and
any judgments, settlements or regulatory action relating to these cases could
have a material adverse effect on the consolidated financial statements.
The Company is involved in various other lawsuits or arbitrations or threatened
lawsuits or arbitrations incidental to its securities business. Management of
the Company, after consultation with counsel, believes the resolution of these
various lawsuits, arbitrations and claims will have no material adverse effect
on the consolidated financial statements.
4. SHAREHOLDERS' EQUITY
During the six months ended March 31, 1997, 185,000 shares of the Company's
common stock were repurchased by the Company, leaving a total of 567,500 shares
available for repurchase pursuant to the Board of Directors' authorizations to
repurchase common stock to satisfy employee benefit plan obligations. As of
March 31, 1997, 725 shares of common stock were held in the treasury.
On November 5, 1996, the Board of Directors authorized the contribution of $15.4
million to the Piper Jaffray Companies ESOP for fiscal year 1996. The
contribution was made 50 percent in cash and 50 percent in the Company's newly
issued common stock, thus adding $7.7 million in additional shareholders' equity
during the first quarter of fiscal 1997.
On April 22, 1997, the Board of Directors of the Company, at its regularly
scheduled meeting, declared a quarterly dividend of 7.5 cents per share of
common stock, payable June 10, 1997, to shareholders of record on May 27, 1997.
<TABLE>
( in thousands, except share and per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Additional Total
Common Stock Paid-In Retained Treasury Shareholders'
--------------------
Shares Amount Capital Earnings Stock Equity
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances at Sept. 30, 1995 17,500,254 $ 17,566 $ 11,901 $ 127,306 $ (1,049) $ 155,724
Net income 7,296 7,296
Net stock issued pursuant
to employee benefit plans 979,504 632 7,531 4,678 12,841
Cash dividends-$.30/share (5,401) (5,401)
Treasury stock acquired (282,500) (3,635) (3,635)
-------------------------------------------------------------
Balances at Sept. 30, 1996 18,197,258 18,198 19,432 129,201 (6) 166,825
Net income 9,289 9,289
Net stock issued pursuant
to employee benefit plans 662,799 478 7,835 2,764 11,077
Cash dividend-$.15/share (2,766) (2,766)
Treasury stock acquired (185,000) (2,771) (2,771)
=============================================================
Balances at Mar. 31, 1997 18,675,057 $ 18,676 $ 27,267 $ 135,724 $ (13) $ 181,654
=============================================================
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This discussion should be read in conjunction with Management's Financial
Discussion contained in the Company's Annual Report for the year ended September
30, 1996.
OPERATIONS
The Company recorded revenue of $153.3 million for the quarter ended March 31,
1997, an increase of 11% over the prior year. Net income increased to $7.5
million or $.39 per share for the quarter ended March 31, 1997 versus a net loss
of $2.3 million or $.13 per share a year earlier. Second quarter fiscal 1996
results included a $14.0 million settlement of class action litigation related
to several closed-end funds managed by Piper Capital.
Revenues of $292.1 million for the six months ended March 31, 1997 increased 8%
over the same period of the prior year, led by growth in commissions and
underwriting revenues, which increased 9% and 11%, respectively. Asset
management revenue decreased 6% for the six months ended March 31, 1997 compared
to the same period in fiscal 1996 as a result of lower average assets under
management. At March 31, 1997 Piper Capital had $9.3 billion in assets under
management. Interest income was up 27% to $24.8 million for the six months ended
March 31, 1997, due to a 37% increase in average customer margin debits,
partially offset by a decline in average interest rates and a 21% growth in
average fixed income inventories. Other income increased 29% to $15.0 million
due primarily to growth in managed accounts.
Employee compensation, including broker compensation and employee incentives,
increased by $13.3 million, or 8% as compared to the same six months of fiscal
1996, in line with increases in revenue. Interest expense increased $4.9 million
or 66% primarily due to increased borrowing required to fund higher average
customer margin debits and firm inventories. Also impacting interest expense
were interest accruals for litigation settlement notes payable. Occupancy and
equipment and communications expenses increased $2.8 million (17%) and $2.6
million (28%), respectively, over the prior year due primarily to significant
investment in technology infrastructure of the branches and headquarters, along
with the addition or expansion of several sales offices. Travel and promotional
expenses increased $2.9 million or 37% resulting from an increase in
institutional client-related conferences and meetings. Other expenses, which
include litigation-related costs, decreased 25% versus the same period in the
prior year. The six months ended March 31, 1996 included a $14.0 million
settlement related to several closed-end funds managed by Piper Capital. Through
six months, fiscal 1997 net income was $9.3 million or $.49 per share, as
compared to net income of $4.4 million or $.24 per share one year earlier.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a liquid balance sheet. Most of the Company's assets consist of
cash and assets readily convertible into cash. The fluctuations in cash flows
from financing activities are directly related to operating activities due to
the liquid nature of the Company's balance sheet.
Management believes that existing capital, funds from operations and current
credit lines will be sufficient to finance the Company's business.
During fiscal 1995 and 1996 the Company entered into certain structured
settlement agreements for class-action litigation relating to various funds or
assets managed by Piper Capital. Payments for these agreements, which are
payable over one to five years, are expected to be financed through cash from
operations and available credit facilities.
The Company is currently a defendant in other lawsuits and arbitrations and is
subject to regulatory inquiries related to various funds or assets managed by
Piper Capital. In addition, management is aware of unasserted claims which may
contain similar allegations. The Institutional Government Income Portfolio
remains the subject of an investigation conducted by the Securities and Exchange
Commission. The Company is also a defendant in a case involving an underwriting
for Bonneville Pacific Corporation by Piper Jaffray. The Company intends to
defend, or in some cases negotiate to settle these actions. It is impossible to
predict the outcome of these actions, and, at the present time, the effect of
these actions on the consolidated financial statements cannot be determined.
Accordingly, no provision for losses that may result has been recorded in the
consolidated financial statements. However, the aggregate cost of litigation and
any judgments, settlements or regulatory action relating to these cases could
have a material adverse effect on the consolidated financial statements.
The Company is involved in various other lawsuits or arbitrations or threatened
lawsuits or arbitrations incidental to its securities business. Management of
the Company, after consultation with counsel, believes the resolution of these
various lawsuits, arbitrations and claims will have no material adverse effect
on the consolidated financial statements.
In the normal course of business, the Company's customer, trading and
correspondent clearance activities involve the execution, settlement and
financing of various securities transactions including repurchase agreements.
These activities may expose the Company to off-balance sheet risk in the event
the other party to the transaction is unable to fulfill its contractual
obligations.
The Company utilizes financial futures contracts to hedge fixed income
inventories against market interest rate fluctuations. Such transactions are
subject to the same controls as all trading for the Company's own account. The
Company also enters into government reverse repurchase agreements to facilitate
hedging. The Company does not, and has no plans to enter into, for either
hedging or speculative purposes, the following types of transactions: interest
rate swaps, foreign currency contracts or significant amounts of futures,
options, forwards, mortgage-backed derivatives, or other securities whose value
is derived from other investment products (derivatives). The Company's
investment management subsidiary, Piper Capital, manages mutual funds and other
investment portfolios which do contain such derivatives.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is currently a defendant in lawsuits and arbitrations and is subject
to regulatory inquiries related to various funds or assets managed by Piper
Capital. In addition, management is aware of unasserted claims which may contain
similar allegations. The Institutional Government Income Portfolio remains the
subject of an investigation conducted by the Securities and Exchange Commission.
The Company is also a defendant in a case involving an underwriting for
Bonneville Pacific Corporation by Piper Jaffray. The Company intends to defend
or, in some cases, negotiate to settle these actions. It is impossible to
predict the outcome of these actions, and, at the present time, the effect of
these actions on the consolidated financial statements cannot be determined.
Accordingly, no provision for losses that may result has been recorded in the
consolidated financial statements. However, the aggregate cost of litigation and
any judgments, settlements or regulatory action relating to these cases could
have a material adverse effect on the consolidated financial statements.
The Company is involved in various other lawsuits or arbitrations or threatened
lawsuits or arbitrations incidental to its securities business. Management of
the Company, after consultation with counsel, believes the resolution of these
various lawsuits, arbitrations and claims will have no material adverse effect
on the consolidated financial statements.
Actions which individually, or when aggregated with similar actions, make claims
for a material amount are described in more detail below:
A. Lawsuits and Arbitrations Related to Various Funds or Assets Managed by
Piper Capital Management Incorporated
1. Institutional Government Income Portfolio
a. Lawsuits Brought by Investors in the Institutional Government Income
Portfolio.
The following actions have been brought by investors in the Institutional
Government Income Portfolio. Plaintiffs in these actions requested exclusion
from a previously settled consolidated class action, In re Piper Funds Inc.
Institutional Government Income Portfolio (United States District Court,
District of Minnesota) ("PJIGX Action"). The PJIGX action had included
claims based on allegations of misrepresentation and improper management.
The claims alleged in the following actions are similar to the claims which
had been alleged in the PJIGX Action.
Frank R. Berman, Trustee of Frank R. Berman Professional CP Pension Plan
Trust v. Piper Jaffray Inc., Piper Fund, Inc., Morton Silverman and Worth
Bruntjen (Minnesota State District Court, Hennepin County).
Action commenced on April 11, 1995 in Minnesota State District Court,
Hennepin County. This action was removed to United States District Court,
District of Minnesota. Plaintiff seeks monetary damages, plus interest, and
attorneys' fees and costs. The Complaint does not specify an amount of
damages sought.
Beverly Muth vs. Piper Jaffray Inc. and Teresa L. Darnielle (Montana
Thirteenth Judicial District Court, Yellowstone County).
Action commenced on June 22, 1995. Plaintiff seeks monetary damages of over
$12,000, a sum to be determined at trial for extreme emotional distress and
an award of punitive damages.
b. Arbitrations Brought by Investors in Institutional Government Income
Portfolio.
The following arbitrations, commenced by investors in the Institutional
Government Income Portfolio, are based on claims similar to the claims which
had been alleged in the PJIGX Action. Claimants in these arbitrations
requested exclusion from the settlement class in the PJIGX Action.
Fredrikson & Byron, P.A., Bertin A. Bisbee, William J. Brody, John P. Byron,
and Richard R. Hansen, as Trustees of the Fredrikson & Byron, P.A. Money
Purchase Pension Plan, Fredrikson & Byron, P.A. Money Purchase Pension
Trust, Fredrikson & Byron, P.A. Profit Sharing Plan and Fredrikson & Byron,
P.A. Profit Sharing Trust v. Piper Jaffray Incorporated, Piper Capital
Management Incorporated, Worth Bruntjen, and John Gibas (National
Association of Securities Dealers Arbitration).
Claim filed November 11, 1994. Claimants seek to recover in excess of $1
million.
Lummi Indian Business Council v. Piper Jaffray Inc. and Piper Capital
Management Incorporated (National Association of Securities Dealers
Arbitration).
Claim filed June 13, 1996. Claimant seeks to recover in excess of $1.7
million.
City of Eden Prairie v. Piper Capital Management, Piper Jaffray Inc., Piper
Jaffray Companies Inc. and Worth Bruntjen (National Association of
Securities Dealers Arbitration).
Claim filed June 12, 1996. Claimant seeks to recover in excess of $1
million.
Thomas Wexler as Trustee of the Wexler Family Trust v. Piper Jaffray Inc.
(National Association of Securities Dealers Arbitration).
Claim filed February 6, 1997. Claimant seeks to recover $1,045,000.
c. Dispute previously severed from the PJIGX Action.
On February 18, 1997, the United States District Court presiding over the
PJIGX Action entered an order for final judgment concerning a dispute which
involves Merchants Trust Company and certain of its customers whose funds
were used to purchase shares of the Institutional Government Income
Portfolio. The February 18, 1997 order for final judgment has been appealed
to the United States Court of Appeals for the Eighth Circuit. This appeal
does not affect the settlement reached with other class members.
2. American Strategic Income Portfolio Inc. I, II, and III (ASP, BSP, and CSP,
respectively), American Select Portfolio Inc. (SLA), American Opportunity
Income Fund (OIF), American Government Income Fund Inc. (AGF), American
Government Income Portfolio Inc. (AAF), Americas Income Trust Inc.(XUS) and
Other Named Funds
a. The following actions have been brought by investors in one or more of the
above-mentioned funds.
Gary E. Nelson, et al. v. American Strategic Income Portfolio Inc.-II, Piper
Jaffray Companies Inc., Piper Capital Management Incorporated, Piper Jaffray
Inc., Worth Bruntjen, Charles Hayssen, Michael Jansen, William Ellis and
Edward Kohler (United States District Court, Western District of
Washington).
Christian Fellowship Foundation Peace United Church of Christ, Roseville
Firefighter's Relief Association, William J. and Florence B. Cohen, John and
Shirley Breitner, Gary E. Nelson and Lloyd Schmidt, et al. v. American
Government Income Portfolio, Inc., American Government Income Fund Inc.,
American Government Term Trust Inc., American Strategic Income Portfolio
Inc., American Strategic Income Portfolio Inc.-II, American Strategic Income
Portfolio Inc.-III, American Opportunity Income Fund Inc., American Select
Portfolio Inc., Piper Jaffray Companies Inc., Piper Capital Management Inc.,
Piper Jaffray Inc., Worth Bruntjen, Charles Hayssen, Michael Jansen, William
H. Ellis and Edward J. Kohler (United States District Court, Western
District of Washington).
Plaintiff Nelson, an investor in BSP, filed a putative class action lawsuit
on June 28, 1995. Nelson also was an investor in OIF, and filed a second
putative class action lawsuit on July 12, 1995. On September 7, 1995,
Plaintiffs Nelson, et al. filed an Amended Complaint alleging claims against
eight funds and various individuals and entities, which included many of the
allegations contained in the previous two putative class action lawsuits, as
well as new allegations. By Order filed October 5, 1995, the Court
consolidated the two putative class action lawsuits. Plaintiffs filed a
Second Amended Complaint on February 5, 1996, and a Third Amended Complaint
on June 4, 1996. Plaintiffs seek to represent a global class of persons who
purchased shares in the eight funds during the period May 25, 1988 through
May 1, 1995, as well as certain subclasses.
With respect to some or all of the subclasses, plaintiffs allege violations
of Sections 11, 12(2) and 15 of the Securities Act; Sections 10(b) and 20(a)
of the Securities Exchange Act and Rule 10b-5 promulgated thereunder;
Sections 13(a), 34(b), and 36(b) of the Investment Company Act; certain
subsections of the Racketeer Influenced and Corrupt Organizations Act
("RICO"), 18 U.S.C. S~1962 based on alleged predicate acts of mail fraud,
wire fraud, interstate transportation of money obtained through fraud, and
fraud in the sale of securities; the Washington State Securities Act; and
the Washington Consumer Protection Act. Plaintiffs may also purport to
allege claims under the common law of negligent misrepresentation and breach
of fiduciary duty. Under some or all of the claims, plaintiffs seek
rescission or monetary damages, treble damages, attorney's fees, prejudgment
interest and costs. The Third Amended Complaint does not specify a
particular amount of damages sought. The defendants filed a motion to
dismiss the consolidated action and a motion for summary judgment.
The named plaintiffs and defendants have executed a settlement agreement
which the Court has preliminarily approved. If approved by a sufficiently
large percentage of the Class and granted final approval by the Court, the
settlement agreement would provide $15.5 million to class members in
payments by the Company and Piper Capital over the next four years. The
settlement also includes an agreement that each of AGF, AAF and OIF would
offer to repurchase up to 25 percent of their outstanding shares from
current shareholders at net asset value. If the discounts between net asset
value and market price of these funds do not decrease to 5 percent or less
within approximately two years after the effective date of the settlement,
the fund boards may submit shareholder proposals to convert these funds to
an open-end format, unless they determine that it is not in the
shareholders' best interest to do so. Finally, the agreement stipulates that
each of ASP, BSP, CSP and SLA would offer to repurchase up to 10 percent of
their outstanding shares from current shareholders at net asset value.
John Darlington and Ann Darlington v. Piper Jaffray Inc. and Dick Tallent
(Montana Second Judicial District Court, Silver Bow County).
Plaintiff filed this action on November 1, 1995 based on his investment in
CSP and XUS. Plaintiff alleged claims of breach of contract, breach of the
covenant of good faith and fair dealing, fraud and misrepresentation. The
Court ordered the plaintiffs to arbitrate this dispute and stayed the
lawsuit pending arbitration. No arbitration claim has been filed.
Kenneth Schneider v. Piper Jaffray Inc. and Richard Tallent (Montana Second
Judicial District Court, Silver Bow County).
Plaintiff filed this action on April 11, 1996 based on his investment in
SLA. Plaintiff alleges claims of misrepresentation and negligent
misrepresentation. The Complaint seeks compensatory damages in an
unspecified amount, punitive damages, and costs and attorneys' fees.
Margaret Nagel v. Piper Jaffray Inc. and Richard Tallent (Montana Second
Judicial District Court, Silver Bow County).
Plaintiff filed this action on April 11, 1996 based on her investment in
SLA. Plaintiff alleges claims of misrepresentation and negligent
misrepresentation. The Complaint seeks compensatory damages in an
unspecified amount, punitive damages, and costs and attorneys' fees.
Kenneth Gennerman as Trustee of The Nicole Bowlin Trust v. Piper Jaffray
Inc. (Wisconsin Circuit Court, Waukesha County)
Plaintiff filed this action on August 7, 1996, based on his investment in
OIF. Plaintiff alleges claims of negligent misrepresentation, intentional
misrepresentation and strict responsibility. The Complaint seeks rescission
or compensatory damages for investment of $10,000, interest, punitive
damages and attorneys' fees and costs.
b. The following arbitration claims seek recovery by investors in one or more
of the afore-mentioned closed-end funds:
Frederick Poole and Jane Poole; George Chapman; Dolores Patterson; Craig
Carter; Elliott J. Ashford and Linda K. Ashford; Elliott J. Ashford as the
Custodian for the accounts of Katie Stoltz and Zachary Stoltz; Linda K.
Ashford, as custodian for the account of Shelby Ashford; Kenneth Powers and
Marlene Powers; Robert Ferris and William Ferris, Custodians for the account
of Eva Ferris; Jim Toomey and Linda Toomey; Jeffrey Erwin and Lynda Erwin;
Alan Citron and Kathy Citron; Mishelle Barr as the custodian for the account
of Maria Barr; J. Kerry Wilcox and Sally E. Wilcox; Willard R. Helton and
Lenora J. Helton; Richard Austin and Joan Austin; Sydney Bannister; F. Alan
Boyd and Viola Boyd; Joseph Brown and Wanda Brown; Peter Crane and Jody
Gebbers; Robert Fately and Regna Fately; Millard Fowler and Frankie Fowler;
Marilyn Gearing; Edward Godsey and Nancy Godsey; James Keaton; R. L.
McDonald; Nora Rappe and Elmer Rappe;; Doris Riggs; Larry Simms and Bonnie
Simms; Kenneth Willig and Noreen Willig, as trustees for the Kenneth A.
Willig 1976 Trust; Talleta Wibmer and Helmut Wibmer; Susan Van Masdam;
George Willot; Teresa Smith; Betty Wick; Susan Wick; Velma Donelly v. Piper
Jaffray & Hopwood Incorporated; Piper Capital Management Inc; American
Strategic Income Portfolio, Inc., I; American Strategic Income Portfolio,
Inc., II; American Strategic Income Portfolio, III; American Select, Inc.;
Piper Jaffray Companies Inc.; Piper Jaffray Inc.; and Mike Jansen (National
Association of Securities Dealers Arbitration).
Claim filed December 6, 1995. Claimants seek rescission or damages, interest
and costs in an unspecified amount.
Daniel K. Nordby and Barbara L. Rawley v. Piper Jaffray Inc. and Gary M.
Petrucci (National Association of Securities Dealers Arbitration).
Claim filed in February, 1995. Claimants seek to recover approximately
$31,500.
Penny DiRocco v. Piper Jaffray Inc. (National Association of Securities
Dealers Arbitration).
Claim filed March 27, 1995. Claimant seeks damages in excess of $500,000.
Mabel I. Hines v. Piper Jaffray Inc. and Robert Blis (National Association
of Securities Dealers Arbitration)
Claim filed May 16, 1996. Claimant seeks to recover approximately $25,000.
Henry G. and Barbara S. Kohler Trustees FBO Calneva Development Company
Inc., Combined Retirement Trust Dated 3/1/81 v. M.L. Stern & Company and
Piper Jaffray Inc. (National Association of Securities Dealers
Arbitration).
Claim filed August 5, 1996. Claimant seeks to recover in excess of $19,984.
Janet Hayden v. Piper Jaffray Inc. (National Association of Securities
Dealers Arbitration).
Claim filed September 3, 1996. Claimant seeks to recover in excess of
$256,550.
Kenneth W. Nagel, Trustee, and Rachel J. Nagel, Trustee v. Piper Jaffray
Inc. (National Association of Securities Dealers Arbitration).
Claim filed November 18, 1996. Claimants seek to recover $10,000.
Gary N. Cohn, GNC Enterprises Pension Plan, GNC Enterprises Profit Sharing
Plan, Cohn Family Irrevocable Family Trust and Gary N. Cohn IRA v. Piper
Jaffray Inc., Piper Capital Management Incorporated, Worth Bruntjen, Paul A.
Dow, William H. Ellis, Marijo Goldstein, Jeffrey B. Griffin, Charles N.
Hayssen, David B. Holden, Kevin A. Jansen, Michael P.Jansen, Susan J. Moen
Klaseus, Edward J. Kohler, Addison L. Piper, Nancy Olsen, Benjamin Rinkey,
David E. Rosedahl, Eric L. Siedband, John G. Wenker and Beverly J. Zimmer
(National Association of Securities Dealers Arbitration).
Claim filed December 19, 1996. Claimants seek to recover in excess of
$169,786 and/or rescission.
Curtis G. Weakly and Jean Weakly v. Piper Capital Management Incorporated
and Piper Jaffray Companies Inc.(National Association of Securities Dealers
Arbitration).
Claim filed February 3, 1997. Claimants seek to recover $26,625.
3. Managers Intermediate Mortgage Fund
Florence R. Hosea, Bobby W. Hosea, Getrud B. Dale and Peter M. Dale, Andrew
Poffel and Diane Poffel as tenants by the Entireties, Myrone Barone, Donna
M. DiPalo, Bernard B. Geltner as IRA custodian, IRA and Bernard B. Geltner
and Gail Geltner and Paul Delman v. The Managers Funds, The Managers Funds,
L.P., Robert P. Watson, Piper Capital Management Incorporated, Piper Jaffray
Inc., Worth Bruntjen and Managers Intermediate Mortgage Fund (United States
District Court, District of Connecticut).
Karen E. Kopelman v. The Managers Fund, The Managers Funds, L.P., Robert P.
Watson, Piper Capital Management Incorporated, Piper Jaffray Inc., Worth
Bruntjen and Managers Intermediate Mortgage Fund (United States District
Court, District of Connecticut).
Plaintiff Hosea filed a putative class action lawsuit on September 26, 1994.
Plaintiff Kopelman filed a putative class action lawsuit on November 4,
1994. By court order dated December 13, 1994, these two putative class
action lawsuits were consolidated. The plaintiffs purport to represent a
class of persons who purchased shares in the Managers Intermediate Mortgage
Fund ("Managers Intermediate") during the period from May 1, 1992, through
June 14, 1994. Managers Intermediate is a no-load, open-end mutual fund that
was generally managed by The Managers Funds, L.P. During the class period,
Piper Capital was the portfolio asset manager.
In their Amended and Restated Complaint, filed on July 19, 1995, plaintiffs
allege that defendants Piper Capital, Piper Jaffray and Worth Bruntjen (the
"Piper Defendants") violated Sections 11, 12(2) and 15 of the Securities
Act; Section 10(b) of the Securities Exchange Act, and Rule 10b-5
promulgated thereunder; Sections 34(b) and 36(b) of the Investment Company
Act; and engaged in negligent misrepresentation. Plaintiffs seek rescission
or monetary damages, plus prejudgment interest, punitive damages "where
appropriate," and attorneys' fees and costs. The Complaint does not specify
an amount of damages sought. Although the plaintiffs in this consolidated
action allege that it has been brought as a class action, the Court has not
yet determined whether a class will be certified.
4. Managers Short Government Income Fund
a. Robert Fleck, on behalf of himself and all others similarly situated v. The
Managers Funds, The Managers Funds, L.P., Piper Jaffray Inc., Piper Capital
Management Incorporated, Worth Bruntjen, Evaluation Associates, Inc., Robert
P. Watson, John E. Rosati, William M. Graulty, Madeline H. McWhinney, Steven
J. Paggioli, Thomas R. Schneeweis and Managers Short Government Fund, F/K/A
Managers Short Government Income Fund (United States District Court,
District of Minnesota).
Plaintiff, a shareholder of the Managers Short Government Income Fund
("Managers Short"), filed this putative class action lawsuit on November 18,
1994. Plaintiff purports to represent a class of persons who purchased
shares of Managers Short during the period from May 1, 1993, through
September 12, 1994. Managers Short is a no-load, open-end mutual fund that
was generally managed by The Managers Funds, L.P. Piper Capital was the
portfolio asset manager until August 12, 1994.
By Order filed November 24, 1995, the Court dismissed all claims against the
Piper Defendants for failure to state a claim. The Court ordered that
plaintiff may file an amended Complaint on or before December 20, 1995. The
Court denied, in part, a motion to dismiss claims asserted against
defendants other than the Piper Defendants, including claims for alleged
violation of Sections 11, 12(2) and 15 of the Securities Act.
On December 14, 1995, plaintiff served an Amended Complaint alleging that
defendants Piper Jaffray Inc., Piper Capital and Worth Bruntjen (the "Piper
Defendants") violated Sections 11, 12(2) and 15 of the Securities Act;
Section 10(b) of the Securities Exchange Act, and Rule 10b-5 promulgated
thereunder; Section 13(a)(3) of the Investment Company Act; and engaged in
common law fraud. Plaintiff seeks rescission and monetary damages, plus
prejudgment interest, punitive damages if appropriate, and attorneys' fees
and costs. The Amended Complaint does not specify an amount of damages
sought. The Piper Defendants filed a motion to dismiss the claims against
them in the Amended Complaint.
The named plaintiff and defendants have executed a settlement agreement. If
approved by the Court and a sufficiently large percentage of the putative
class members, the settlement agreement would provide to class members up to
a total of $1.5 million collectively from The Managers Funds, L.P. and Piper
Capital Management Incorporated on the Effective Date of the settlement.
b. Other Lawsuit Brought by Investor in the Managers Short Government Fund and
the Managers Intermediate Mortgage Fund
First Commercial Trust Company, N.A. v. The Managers Funds, a Massachusetts
Business Trust, Managers Short Government Fund, Managers Intermediate
Mortgage Fund, Managers Short and Intermediate Bond Fund, The Managers
Funds, L.P., EAIMC Holdings Corporation, Evaluation Associates Holding
Corporation, EAI Partners, L.P., Evaluation Associates, Inc., Robert P.
Watson, William W. Graulty, Madeline H. McWhinney, Steven J. Paggioli,
Thomas R. Schneeweis, William J. Crerend, Piper Capital Management Inc.,
Piper Jaffray Companies Inc., Worth Bruntjen, Standish, Ayer & Wood, Inc.,
TCW Funds Management, Inc. and TCW Management Company (Connecticut Superior
Court, Stamford/Norwalk District).
According to the Complaint filed on October 26, 1995, plaintiff First
Commercial Trust Company ("FCTC") is an investor in the Managers Short
Government Fund, the Managers Intermediate Mortgage Fund, and the Managers
Short and Intermediate Bond Fund. Piper Capital was the portfolio asset
manager for the Managers Short Government Fund and the Managers Intermediate
Bond Fund, which are generally managed by The Managers Funds, L.P. Based on
the allegations in the Complaint, plaintiff appears to fall within the
definition of the proposed classes in both the Hosea/Kopelman and Fleck
actions described above.
Plaintiff alleges that Piper Jaffray Companies Inc., Piper Capital and
Bruntjen (the "Piper Defendants"), engaged in fraud, fraudulent concealment,
breach of contract, breach of fiduciary duty, breach of implied covenant of
good faith and fair dealing, negligent misrepresentation, civil conspiracy,
negligent interference with contractual relations, violation of the
Connecticut Unfair and Deceptive Trade Practices Act, and violation of the
Connecticut Securities Act. Plaintiff seeks compensatory damages in an
unspecified amount, punitive damages, attorneys' fees, interest and costs.
The Piper Defendants have joined a motion brought by other defendants to
dismiss the Complaint or alternatively to stay the action.
In a declaratory action filed on October 26, 1995 in the United States
District Court, District of Connecticut, the Piper Defendants, along with
The Managers Funds, L.P., The Managers Funds and related persons and
entities seek a declaration that they bear no liability to FCTC. FCTC has
brought a motion to dismiss the declaratory action.
5. Privately Managed Accounts
The following arbitration claim seeks recovery for accounts managed by Piper
Capital Management Incorporated:
Regents of the University of Minnesota and Ruminco, Ltd. v. Piper Capital
Management Incorporated, Piper Jaffray Inc., Piper Jaffray Companies Inc.
and Worth Bruntjen (National Association of Securities Dealers Arbitration).
Claim filed November 22, 1995. Claimants seek to recover over $15 million
and punitive damages. Claimants allege violation of federal and state
securities laws, breach of fiduciary duty, breach of contract, negligence
and violation of the Minnesota Consumer Fraud Act. Claimants' individually
managed accounts included investments in derivative products.
B. Bonneville Pacific Corporation
Piper Jaffray was named as one of several defendants in a lawsuit filed in
the United States District Court for the District of Utah resulting from
Piper Jaffray's dealings with Bonneville Pacific Corporation ("BPCO"). Other
defendants include BPCO's attorneys, accountants, lenders and other
investment bankers. BPCO is currently in Chapter 11 reorganization
proceedings in Utah.
The plaintiffs in the first-filed lawsuit originally brought their complaint
as a purported class action relating to the $63.25 million offering of
convertible subordinated debentures of BPCO in August 1989, for which Piper
Jaffray was a co-managing underwriter in a syndicate led by Kidder, Peabody
& Co. and secondary trading in BPCO's Common Stock from August 1989 through
the inception of BPCO's bankruptcy proceeding in December 1991. The
plaintiffs in their complaint alleged violations of federal and state
securities laws, common law fraud and negligent misrepresentation. On March
14, 1994, the plaintiffs filed a motion to amend their complaint seeking
leave to add additional parties and claims. The proposed amended complaint
seeks to add claims under RICO and to expand the class period, under a
common law fraud theory, to include the $22.5 million initial public
offering of BPCO's Common Stock in August 1986, for which Piper Jaffray
acted as the sole underwriter, and the $31 million secondary offering of
BPCO's Common Stock in August 1987, for which Piper Jaffray acted as
co-managing underwriter. In addition to actual damages, the proposed amended
complaint also seeks treble damages under RICO, punitive damages, interest,
costs and attorneys' fees. On April 29, 1994, motions to dismiss brought by
Piper Jaffray and the other underwriter defendants with respect to the
plaintiffs' claims of violations of Section 10(b) of the Securities Exchange
Act and Rule 10b-5 promulgated thereunder, conspiracy, aiding and abetting,
common-law fraud and negligent misrepresentation were granted. The judge in
the case certified to the Utah Supreme Court issues related to the
plaintiffs' claims under the Utah Uniform Securities Act and further denied
plaintiffs' March 14, 1994 motion for leave to file an amended complaint as
premature. The plaintiffs were given leave to amend all dismissed claims
except the conspiracy and aiding and abetting claims under Section 10(b),
which were dismissed with prejudice. By date of June 14, 1994, plaintiffs
served a second amended complaint, realleging claims under Sections 11 and
15 of the Securities Act and Section 10 of the Securities Exchange Act and
Rule 10b-5 promulgated thereunder. Plaintiffs also asserted RICO claims and
claims under the Utah Uniform Securities Act, among others. On August 2,
1994, Piper Jaffray and the other defendants moved to dismiss the RICO,
Securities Exchange Act and Utah Uniform Securities Act claims and that
motion is pending. In an opinion filed July 5, 1996, the Utah Supreme Court
held that reliance was not an element of a claim under Utah's Uniform
Securities Act, but that the plaintiffs were required to establish privity
with a particular defendant seller of securities in order to recover from
that defendant. All discovery has been stayed in this matter. No pretrial
schedule or trial date has been established.
A second lawsuit was brought by the BPCO bankruptcy trustee. The lawsuit
alleged conspiracy, RICO, common law fraud, breach of fiduciary duty and
similar theories arising out of the activities of BPCO from 1984 through the
inception of its bankruptcy proceeding. The lawsuit sought actual damages,
treble damages under RICO, punitive damages, interest, costs and attorney's
fees. On August 12, 1996, Piper Jaffray entered into a settlement agreement
with the BPCO bankruptcy trustee providing for the payment of $10.0 million
in settlement of all claims against Piper Jaffray. The settlement agreement
was subsequently approved by the District Court and the Bankruptcy Court.
Under the terms of the settlement agreement, Piper made a $7.0 million
payment on September 9, 1996. Two additional payments of $1.5 million each
are payable in September 1997 and September 1998.
C. NASDAQ Market-Maker Anti-Trust Securities Litigation
Piper Jaffray has been named as a defendant in several purported class
action proceedings that allege anti-trust violations. Piper Jaffray was
joined as defendant in such actions during July 1994. All actions have been
consolidated under the title In re NASDAQ Market-Maker Anti-Trust and
Securities Litigation (United States District Court, Southern District of
New York ).
The plaintiffs allege that twenty-four defendants, including Piper Jaffray,
that act as dealers on the NASDAQ computerized quotations system, conspired
to raise and fix the spreads between the bid and ask prices of securities
traded on NASDAQ. Plaintiffs further allege that as a result of such
conspiracy, NASDAQ spreads were larger than spreads for stocks traded on the
New York Stock Exchange and the American Stock Exchange. The purported class
consists of all persons in the United States who are current customers and
who bought or sold securities through NASDAQ within four years prior to the
filing of the complaints. Plaintiffs seek treble damages of an unspecified
amount.
D. Department of Justice NASDAQ Investigation
On July 17, 1996, while denying any wrongdoing, the Company joined in a
settlement agreement with twenty-three other NASDAQ dealers, resolving the
U.S. Department of Justice Investigation of the NASDAQ stock market. Piper
Jaffray cooperated fully with the Justice Department's investigation. Terms
of the settlement call for the defendants to implement certain policies and
procedures intended to address the concerns raised by the U.S. Department of
Justice. The settlement was approved by the United States District Court for
the Southern District of New York on April 22, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 - Statement Regarding Computation of Per Share Earnings.
27 - Financial Data Schedule - EDGAR version only (filed electronically).
(b) Reports on Form 8-K
The Company was not required to file any reports on Form 8-K to the
Securities and Exchange Commission during the quarter ended March 31,
1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PIPER JAFFRAY COMPANIES INC.
(Registrant)
Dated: May 14, 1997 /s/ Deborah K. Roesler
----------------------
DEBORAH K. ROESLER
Chief Financial Officer and Managing Director
Dated: May 14, 1997 /s/ William H. Ellis
--------------------
WILLIAM H. ELLIS
President
<PAGE>
PIPER JAFFRAY COMPANIES INC.
INDEX OF EXHIBITS TO QUARTERLY REPORT ON FORM 10-Q
Exhibit Description of Exhibit
Form of Filing
11 Statement Regarding Computation of Per Share Earnings Electronic
transmission
27 Financial Data Schedule (EDGAR version only) Electronic
transmission
<PAGE>
Exhibit 11
PIPER JAFFRAY COMPANIES INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
-------------------- -------------------
1997 1996 1997 1996
--------- --------- --------- --------
PRIMARY NET INCOME PER SHARE:
Net income (loss) $ 7,469 $ (2,294) $ 9,289 $ 4,360
========= ========= ========= ========
Average number of common and common
equivalent shares outstanding:
Average common shares outstanding 18,671 17,947 18,473 17,743
Dilutive effect of common stock
equivalents:
Book value plan options 159 - 159 193
Executive incentive stock options 493 - 360 276
--------- --------- --------- --------
19,323 17,947 18,992 18,212
Primary net income (loss) per share $ .39 $ ( .13) $ .49 $ .24
========= ========= ========= ========
NET INCOME PER SHARE ASSUMING
FULL DILUTION:
Net income (loss) $ 7,469 $ (2,294) $ 9,289 $ 4,360
========= ========= ========= =========
Average number of common and common
equivalent shares outstanding:
Average common shares outstanding 18,671 17,947 18,473 17,743
Dilutive effect of common stock
equivalents:
Book value plan options 159 - 161 197
Executive incentive stock options 493 - 360 295
--------- --------- --------- --------
19,323 17,947 18,994 18,235
Fully Diluted net income (loss) per $ .39 $ (.13) $ .49 $ .24
share ========= ========= ========= ========
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF PIPER JAFFRAY COMPANIES INC. AS OF
AND FOR THE PERIODS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 45,896
<RECEIVABLES> 621,519
<SECURITIES-RESALE> 50,781
<SECURITIES-BORROWED> 0
<INSTRUMENTS-OWNED> 219,183
<PP&E> 30,534
<TOTAL-ASSETS> 1,119,165
<SHORT-TERM> 295,828
<PAYABLES> 329,561
<REPOS-SOLD> 31,984
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 69,592
<LONG-TERM> 43,482
0
0
<COMMON> 18,676
<OTHER-SE> 162,978
<TOTAL-LIABILITY-AND-EQUITY> 1,119,165
<TRADING-REVENUE> 84,429
<INTEREST-DIVIDENDS> 24,818
<COMMISSIONS> 100,029
<INVESTMENT-BANKING-REVENUES> 49,927
<FEE-REVENUE> 17,951
<INTEREST-EXPENSE> 12,299
<COMPENSATION> 179,745
<INCOME-PRETAX> 14,744
<INCOME-PRE-EXTRAORDINARY> 14,744
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,289
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.49
</TABLE>
