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Fair Value

6 Months Ended

Jun. 30, 2020

4. Fair Value

All of the instruments within cash and cash equivalents and investments in securities are measured at fair value, except for those investments designated as held-to-maturity. The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), guidance on fair value measurement. The levels of the fair value hierarchy and their applicability to the Company are described below:

-	Level 1 - the valuation methodology utilizes quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date. Level 1 assets include cash equivalents, government obligations, mutual funds, closed-end funds, and listed equities.
-	Level 2 - the valuation methodology utilizes inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly-quoted intervals.
-	Level 3 - the valuation methodology utilizes unobservable inputs for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability.

The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis by the above fair value hierarchy levels as of June 30, 2020 and December 31, 2019 (in thousands):

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2020

Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of June 30, 2020
Cash equivalents	$	57,771	$	-	$	-	$	57,771
Investments in securities:
Common stocks		16,424		-		-		16,424
Mutual Funds		823		-		-		823
Closed-end Funds		451		-		-		451
Total investments in securities		17,698		-		-		17,698
Total assets at fair value	$	75,469	$	-	$	-	$	75,469

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019

Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2019
Cash equivalents	$	85,823	$	-	$	-	$	85,823
Investments in securities:
Common stocks		26,463		-		-		26,463
Mutual funds		752		-		-		752
Closed-end funds		511		-		-		511
Total investments in securities		27,726		-		-		27,726
Total assets at fair value	$	113,549	$	-	$	-	$	113,549

Cash equivalents primarily consist of an affiliated money market mutual fund, which is invested solely in U.S. Treasuries and valued based on the net asset value of the fund.

Financial assets disclosed but not carried at fair value

The following table presents the carrying value and fair value of the Company’s investments in debt securities disclosed but not carried at fair value, including those foreign government obligations investments designated as held-to-maturity which are carried at amortized cost remeasured in U.S. dollars, as of June 30, 2020 and December 31, 2019 (in thousands):

	June 30, 2020				December 31, 2019
	Carrying Value		Fair Value Level 1		Carrying Value		Fair Value Level 1
U.S. Treasury Bills	$	49,963	$	49,957	$	-	$	-
Foreign government obligations		2,971		2,971		6,547		6,547
Total	$	52,934	$	52,928	$	6,547	$	6,547

At June 30, 2020 and December 31, 2019, the Senior Notes were recorded at face value, net of amortized issuance costs, as follows (in thousands) on the Condensed Consolidated Statements of Financial Condition:

	June 30, 2020				December 31, 2019
	Carrying Value		Fair Value Level 2		Carrying Value		Fair Value Level 2
Senior notes	$	24,203	$	24,739	$	24,191	$	24,815
Total	$	24,203	$	24,739	$	24,191	$	24,815

The carrying value of other financial assets and liabilities approximates their fair value based on the short-term nature of these items.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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