B. Investment in Securities

Investments in securities at June 30, 2013, December 31, 2012 and June 30, 2012 consisted of the following:

	June 30, 2013				December 31, 2012				June 30, 2012
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)
Trading securities:
Government obligations	$	27,986	$	27,996	$	42,973	$	42,989	$	50,119	$	50,139
Common stocks		137,600		155,088		125,697		138,478		154,470		162,883
Mutual funds		1,074		1,675		1,072		1,484		1,086		1,406
Other investments		470		719		328		630		323		374
Total trading securities		167,130		185,478		170,070		183,581		205,998		214,802

Available for sale securities:
Common stocks		14,077		33,478		14,822		33,560		15,934		32,815
Mutual funds		843		1,484		1,105		1,702		1,361		2,013
Total available for sale securities		14,920		34,962		15,927		35,262		17,295		34,828

Total investments in securities	$	182,050	$	220,440	$	185,997	$	218,843	$	223,293	$	249,630

Securities sold, not yet purchased at June 30, 2013, December 31, 2012 and June 30, 2012 consisted of the following:

	June 30, 2013				December 31, 2012				June 30, 2012
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Trading securities:	(In thousands)
Common stocks	$	7,668	$	7,381	$	2,593	$	2,867	$	6,194	$	6,687
Other investments		71		217		184		269		12		323
Total securities sold, not yet purchased	$	7,739	$	7,598	$	2,777	$	3,136	$	6,206	$	7,010

Investments in sponsored registered investment companies at June 30, 2013, December 31, 2012 and June 30, 2012 consisted of the following:

	June 30, 2013				December 31, 2012				June 30, 2012
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)
Trading securities:
Mutual funds	$	19	$	11	$	19	$	20	$	19	$	19
Total trading securities		19		11		19		20		19		19

Available for sale securities:
Closed-end funds		28,435		49,162		35,868		58,511		36,266		56,171
Mutual funds		2,040		3,168		2,055		3,341		2,198		3,371
Total available for sale securities		30,475		52,330		37,923		61,852		38,464		59,542

Total investments in sponsored
registered investment companies	$	30,494	$	52,341	$	37,942	$	61,872	$	38,483	$	59,561

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 the time of purchase are classified as cash equivalents. A substantial portion of investments in securities is held for resale in anticipation of short-term market movements and therefore is 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 following table identifies all reclassifications out of accumulated other comprehensive income for the three and six months ended June 30, 2013 (in thousands):

Amount								Affected Line Item in	Reason for
Reclassified								in the Statements	Reclassification
from AOCI								Of Income	from AOCI
Three months ended				Six months ended
June 30, 2013				June 30, 2013

	$	9,849			$	10,446		Net gain from investments	Realized gain / (loss) on sale of securities
		181				331		Other operating expenses	Donation of AFS securities
		(14	)			(14	)	Net gain from investments	Other than temporary impairment of AFS securities
		10,016				10,763		Income before income taxes
		(3,706	)			(3,982	)	Income tax provision
	$	6,310			$	6,781		Net 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 June 30, 2013 and 2012, the Company had transactions in equity derivatives which resulted in net losses of ($1,000) and net gains of $15,000, respectively. For the six months ended June 30, 2013 and 2012, the Company had transactions in equity derivatives which resulted in net gains of $280,000 and net losses of ($14,000), respectively. At June 30, 2013, December 31, 2012 and June 30, 2012, we held derivative contracts on 1.5 million equity shares, 1.2 million equity shares and 4.7 million equity shares, respectively, with a fair value of $122,000, ($121,000) and ($72,000), respectively; that 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/(loss) from investments in the condensed consolidated statements of income.

The Company is a party to enforceable master netting arrangements for swaps entered into as part of the investment strategy of the Company's proprietary portfolio. They are typically not used as hedging instruments. These swaps, while settled on a net basis with the counterparties, major U.S. financial institutions, are shown gross in assets and liabilities on the condensed consolidated statements of financial position. The swaps have a firm contract end date and are closed out and settled when each contract expires.

							Gross Amounts Not Offset in the
							Statements of Financial Position
	Gross		Gross Amounts		Net Amounts of
	Amounts of		Offset in the		Assets Presented
	Recognized		Statements of		in the Statements		Financial			Cash Collateral
	Assets		Financial Position		of Financial Position		Instruments			Pledged		Net Amount
Swaps:	(in thousands)
June 30, 2013	$	237	$	-	$	237	$	(177	)	$	-	$	60
December 31, 2012		148		-		148		(132	)		-		16
June 30, 2012	$	942	$	-	$	942	$	(942	)	$	-	$	-

							Gross Amounts Not Offset in the
							Statements of Financial Position
	Gross		Gross Amounts		Net Amounts of
	Amounts of		Offset in the		Liabilities Presented
	Recognized		Statements of		in the Statements		Financial			Cash Collateral
	Liabilities		Financial Position		of Financial Position		Instruments			Pledged		Net Amount
Swaps:	(in thousands)
June 30, 2013	$	177	$	-	$	177	$	(177	)	$	-	$	-
December 31, 2012		132		-		132		(132	)		-		-
June 30, 2012	$	1,014	$	-	$	1,014	$	(942	)	$	-	$	72

The following is a summary of the cost, gross unrealized gains, gross unrealized losses and fair value of available for sale investments as of June 30, 2013, December 31, 2012 and June 30, 2012:

	June 30, 2013
			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(In thousands)
Common stocks	$	14,077	$	19,401	$	-		$	33,478
Closed-end Funds		28,435		20,773		(46	)		49,162
Mutual funds		2,883		1,850		(81	)		4,652
Total available for sale securities	$	45,395	$	42,024	$	(127	)	$	87,292

	December 31, 2012
			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(In thousands)
Common stocks	$	14,822	$	18,738	$	-		$	33,560
Closed-end Funds		35,868		22,645		(2	)		58,511
Mutual funds		3,160		1,883		-			5,043
Total available for sale securities	$	53,850	$	43,266	$	(2	)	$	97,114

	June 30, 2012
			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Common stocks	$	15,934	$	16,881	$	-	$	32,815
Closed-end Funds		36,266		19,905		-		56,171
Mutual funds		3,559		1,825		-		5,384
Total available for sale securities	$	55,759	$	38,611	$	-	$	94,370

Unrealized changes in fair value, net of taxes, for the three months ended June 30, 2013 and June 30, 2012 of ($6.9) million in losses and ($2.6) million in losses, respectively, have been included in other comprehensive income, a component of equity, at June 30, 2013 and June 30, 2012. Return of capital on available for sale securities was $14,000 and $0.3 million for the three months ended June 30, 2013 and June 30, 2012, respectively. Proceeds from sales of investments available for sale were approximately $16.6 million and $0.3 million for the three months ended June 30, 2013 and June 30, 2012, respectively. For the three months ended June 30, 2013 and June 30, 2012, gross gains on the sale of investments available for sale amounted to $9.8 million and $0.1 million, respectively, and were reclassified from other comprehensive income into net gain from investments in the condensed consolidated statements of income. There were no losses on the sale of investments available for sale for the three months ended June 30, 2013 or June 30, 2012. Unrealized changes in fair value, net of taxes, for the six months ended June 30, 2013 and June 30, 2012 of ($0.9) million in losses and $0.9 million in gains, respectively, have been included in other comprehensive income, a component of equity, at June 30, 2013 and June 30, 2012. Return of capital on available for sale securities was $0.6 million and $0.8 million for the six months ended June 30, 2013 and June 30, 2012, respectively. Proceeds from sales of investments available for sale were approximately $22.0 million and $0.8 million for the six months ended June 30, 2013 and June 30, 2012, respectively. For the six months ended June 30, 2013 and June 30, 2012, gross gains on the sale of investments available for sale amounted to $10.4 million and $0.4 million, respectively, and were reclassified from other comprehensive income into net gain from investments in the condensed consolidated statements of income. There were no losses on the sale of investments available for sale for the six months ended June 30, 2013 or June 30, 2012. 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:

	June 30, 2013							December 31, 2012							June 30, 2012
			Unrealized							Unrealized							Unrealized
	Cost		Losses			Fair Value		Cost		Losses			Fair Value		Cost		Losses		Fair Value
(in thousands)
Cosed-end funds	$	1,449	$	(46	)	$	1,403	$	73	$	(2	)	$	71	$	-	$	-	$	-
Mutual Funds		365		(72	)		293		-		-			-		-		-		-
Total	$	1,814	$	(118	)	$	1,696	$	73	$	(2	)	$	71	$	-	$	-	$	-

At June 30, 2013, there were four holdings in loss positions which were not deemed to be other than temporarily impaired due to the length of time that they had been in a loss position and because they passed scrutiny in our evaluation of issuer-specific and industry-specific considerations. In these specific instances, the investments at June 30, 2013 were open and closed-end funds with diversified holdings across multiple companies and across multiple industries. All holdings were impaired for one month at June 30, 2013. The value of these holdings at June 30, 2013 was $1.7 million. If these holdings were to continue to be impaired, we may need to record an impairment in a future period on the condensed consolidated statement of income for the amount of the unrealized loss, which at June 30, 2013 was $118,000.

At December 31, 2012 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 December 31, 2012 was a closed-end fund with diversified holdings across multiple companies and across multiple industries. The one holding was impaired for one month at December 31, 2012 . The value of this holding at December 31, 2012 was $0.1 million.

At June 30, 2012, there were no available for sale holdings in loss positions.

For the three and six months ended June 30, 2013 there was $14,000 of losses on available for sale securities deemed to be other than temporary. For the three and six months ended June 30, 2012, there was $20,000 of losses on available for sale securities deemed to be other than temporary.