Investment in Securities

3 Months Ended

Mar. 31, 2012

Investment in Securities [Abstract]

Investment in Securities

B.  Investment in Securities

Investments in securities at March 31, 2012, December 31, 2011 and March 31, 2011 consisted of the following:

	March 31, 2012				December 31, 2011				March 31, 2011
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)
Trading securities:
Government obligations	$	48,624	$	48,630	$	42,124	$	42,126	$	12,069	$	12,076
Common stocks		156,206		170,224		153,294		159,314		210,956		225,589
Mutual funds		1,086		1,495		1,084		1,307		1,190		1,629
Convertible bonds		-		-		-		-		163		175
Preferred stocks		-		-		-		-		-		-
Other investments		601		571		466		399		465		476
Total trading securities		206,517		220,920		196,968		203,146		224,843		239,945
Available for sale securities:
Common stocks		16,158		34,578		16,487		33,282		16,835		37,408
Mutual funds		1,362		2,109		1,362		1,905		1,503		2,360
Total available for sale securities		17,520		36,687		17,849		35,187		18,338		39,768
Total investments in securities	$	224,037	$	257,607	$	214,817	$	238,333	$	243,181	$	279,713

Securities sold, not yet purchased at March 31, 2012, December 31, 2011 and March 31, 2011 consisted of the following:

	March 31, 2012				December 31, 2011				March 31, 2011
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Trading securities:	(In thousands)
Common stocks	$	9,016	$	9,553	$	5,271	$	5,415	$	14,044	$	15,550
Other		21		104		49		73		-		-
Total securities sold, not yet purchased	$	9,037	$	9,657	$	5,320	$	5,488	$	14,044	$	15,550

Investments in sponsored registered investment companies at March 31, 2012, December 31, 2011 and March 31, 2011 consisted of the following:

	March 31, 2012				December 31, 2011				March 31, 2011
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)
Trading securities:
Mutual funds	$	15	$	17	$	15	$	18	$	15	$	25
Total trading securities		15		17		15		18		15		25
Available for sale securities:
Closed-end funds		36,546		58,721		37,104		55,855		39,232		61,734
Mutual funds		2,204		3,567		2,213		3,341		2,345		4,144
Total available for sale securities		38,750		62,288		39,317		59,196		41,577		65,878
Total investments in sponsored
registered investment companies	$	38,765	$	62,305	$	39,332	$	59,214	$	41,592	$	65,903

Management determines the appropriate classification of debt and equity securities at the time of purchase and reevaluates such designation as of each balance sheet date.  Investments in United States Treasury Bills and Notes with maturities of greater than three months at the time of purchase are classified as investments in securities, and those with maturities of three months or less at time of purchase are classified as cash equivalents.  A substantial portion of investments in securities are held for resale in anticipation of short-term market movements and therefore are classified as trading securities.  Trading securities are stated at fair value, with any unrealized gains or losses, reported in current period earnings.  Available for sale ("AFS") investments are stated at fair value, with any unrealized gains or losses, net of taxes, reported as a component of equity except for losses deemed to be other than temporary which are recorded as unrealized losses in the condensed consolidated statements of income.

The Company recognizes all derivatives as either assets or liabilities measured at fair value and includes them in either investments in securities or securities sold, not yet purchased on the condensed consolidated statements of financial condition.  From time to time, the Company and/or the partnerships and offshore funds that the Company consolidates will enter into hedging transactions to manage their exposure to foreign currencies and equity prices related to their proprietary investments.  For the three months ended March 31, 2012, the Company had derivative transactions in equity derivatives which resulted in net losses of $29,000.  At March 31, 2011, the Company did not hold any derivatives.  At March 31, 3012 and December 31, 2011, we held derivative contracts on 1 million equity shares and 142,000 equity shares, respectively, and the fair value was $105,000 and $24,000, respectively; these are included in investments in securities in the condensed consolidated statements of financial condition.  These transactions are not designated as hedges for accounting purposes, and therefore changes in fair values of these derivatives are included in net gain from investments in the condensed consolidated statements of income. 

The following is a summary of the cost, gross unrealized gains, gross unrealized losses and fair value of available for sale investments as of March 31, 2012, December 31, 2011 and March 31, 2011:

	March 31, 2012
			Gross		Gross
			Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
Common stocks	$	16,158	$	18,420	$	-		$	34,578
Closed-end Funds		36,546		22,189		(14	)		58,721
Mutual funds		3,566		2,110		-			5,676
Total available for sale securities	$	56,270	$	42,719	$	(14	)	$	98,975
	December 31, 2011
			Gross		Gross
			Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
Common stocks	$	16,487	$	16,795	$	-		$	33,282
Closed-end Funds		37,104		18,779		(28	)		55,855
Mutual funds		3,575		1,671		-			5,246
Total available for sale securities	$	57,166	$	37,245	$	(28	)	$	94,383
	March 31, 2011
			Gross		Gross
			Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
Common stocks	$	16,835	$	20,573	$	-		$	37,408
Closed-end Funds		39,232		22,502					61,734
Mutual funds		3,848		2,656		-			6,504
Total available for sale securities	$	59,915	$	45,731	$	-		$	105,646

Unrealized changes to fair value, net of taxes, for the three months ended March 31, 2012 and March 31, 2011 of $3.5 million and $2.5 million in gains, respectively, have been included in other comprehensive income, a component of equity, at March 31, 2012 and March 31, 2011.  Return of capital on available for sale securities were $0.6 million for both the three months ended March 31, 2012 and March 31, 2011.  Proceeds from sales of investments available for sale were approximately $0.5 million and $0.1 million for the three month periods ended March 31, 2012 and March 31, 2011, respectively.  For the three months ended March 31, 2012 and March 31, 2011, gross gains on the sale of investments available for sale amounted to $0.3 million and $0.1 million, respectively, and were reclassed from other comprehensive income into the condensed consolidated statements of income.  There were no losses on the sale of investments available for sale for the three months ended March 31, 2012 or March 31, 2011.  The basis on which the cost of a security sold is determined is specific identification.

Investments classified as available for sale that are in an unrealized loss position for which other-than-temporary impairment has not been recognized consisted of the following:

	March 31, 2012							December 31, 2011							March 31, 2011
			Unrealized							Unrealized							Unrealized
	Cost		Losses			Fair Value		Cost		Losses			Fair Value		Cost		Losses		Fair Value
(in thousands)
Mutual Funds	$	97	$	(14	)	$	83	$	101	$	(28	)	$	73	$	-	$	-	$	-

At March 31, 2012 and December 31, 2011, there was one holding in a loss position which was not deemed to be other-than-temporarily impaired due to the length of time that it had been in a loss position and because it passed scrutiny in our evaluation of issuer-specific and industry-specific considerations.  In this specific instance, the investment at March 31, 2012 and December 31, 2011 was a closed-end fund with diversified holdings across multiple companies and across multiple industries.  The one holding was impaired for ten and seven consecutive months, respectively.  The value of this holding at March 31, 2012 and December 31, 2011 was $0.1 million for both periods.

At March 31, 2011, there were no available for sale holdings in loss positions.

For the three months ended March 31, 2012 and 2011, there were no losses on available for sale securities deemed to be other than temporary.