10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2015

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM          TO                

Commission File No: 001-34897

GFI GROUP INC.

(Exact name of registrant as specified in its charter)

Delaware	80-0006224
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
55 Water Street, New York, NY	10041
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 968-4100

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES x     NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o   NO x

The number of shares of registrant’s common stock outstanding on April 30, 2015 was 170,814,812.

Table of Contents

Part I—Financial Information
		Page Number
Item 1.	Financial Statements
	Condensed Consolidated Statements of Financial Condition as of March 31, 2015 (unaudited) and December 31, 2014	4
	Condensed Consolidated Statements of Operations for the three ended March 31, 2015 (unaudited) and March 31, 2014 (unaudited)	5
	Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2015 (unaudited) and March 31, 2014 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 (unaudited) and March 31, 2014 (unaudited)	7
	Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three months ended March 31, 2015 (unaudited)	9
	Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 4.	Controls and Procedures	62
	Report of Independent Registered Public Accounting Firm	64
Part II—Other Information
Item 1.	Legal Proceedings	65
Item 1A.	Risk Factors	65
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 5.	Other Information	65
Item 6.	Exhibits	66

2

Available Information

Our Internet website address is www.gfigroup.com. Through our website, we make available, free of charge, the following reports as soon as reasonably practicable after electronically filing them with, or furnishing them to, the Securities and Exchange Commission (the “SEC”): our Proxy Statements; Annual Reports on Form 10-K; Quarterly Reports on Form 10-Q; Current Reports on Form 8-K; Forms 3, 4 and 5 filed on behalf of our directors and executive officers; and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In addition, you may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E., Room 1580, Washington D.C. 20549. You also may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains our reports, proxy and information statements, and other information regarding the Company that we file electronically with the SEC at http://www.sec.gov.

Information relating to the corporate governance of the Company is also available on the Investor Relations page of our website, including information concerning our directors, board committees, including committee charters, our corporate governance guidelines, our code of business conduct and ethics for all employees and for senior financial officers and our compliance procedures for accounting and auditing matters. In addition, the Investor Relations page of our website includes certain supplemental financial information that we make available from time to time.

Our website and the information contained therein or connected thereto are not incorporated into this Quarterly Report on Form 10-Q.

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PART I—FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

GFI GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

(In thousands, except share and per share amounts)

	March 31,2015			December 31,2014
Assets
Cash and cash equivalents	$	131,870		$	183,432
Cash and securities segregated under federal and other regulations	157			163
Accounts receivable, net of allowance for doubtful accounts of $1,806 and $1,900 at March 31, 2015 and December 31, 2014, respectively	92,838			82,748
Receivables from brokers, dealers and clearing organizations	1,121,468			507,601
Property, equipment and leasehold improvements, net of depreciation and amortization of $200,728 and $196,237 at March 31, 2015 and December 31, 2014, respectively	53,743			55,897
Goodwill	134,358			134,542
Intangible assets, net	28,842			30,905
Receivables from related parties	60,256			232
Other assets	193,859			172,721
Assets held for sale	23,254			193,701
TOTAL ASSETS	$	1,840,645		$	1,361,942
Liabilities and stockholders’ equity
LIABILITIES
Accrued compensation	$	89,274		$	88,590
Accounts payable and accrued expenses	37,736			31,791
Payables to brokers, dealers and clearing organizations	1,061,872			463,243
Short-term borrowings	60,000			10,000
Long-term debt	240,000			240,000
Other liabilities	82,859			70,270
Liabilities held for sale	18,153			161,914
Total Liabilities	$	1,589,894		$	1,065,808
Commitments and contingencies (Note 12)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 5,000,000 shares authorized, none outstanding at March 31, 2015 and December 31, 2014	—			—
Common stock, $0.01 par value; 400,000,000 shares authorized; 144,480,612 and 144,290,612 shares issued at March 31, 2015 and December 31, 2014, respectively	1,444			1,442
Additional paid in capital	379,710			399,774
Retained deficit	(50,973		)	(31,050		)
Treasury stock, 16,695,060 and 16,724,843 shares of common stock at cost, at March 31, 2015 and December 31, 2014, respectively	(73,368		)	(73,445		)
Accumulated other comprehensive loss	(8,286		)	(2,493		)
Total Stockholders’ Equity	248,527			294,228
Non-controlling interests	2,224			1,906
Total Equity	250,751			296,134
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,840,645		$	1,361,942

See notes to condensed consolidated financial statements

4

GFI GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share amounts)

	Three Months Ended March 31,
	2015			2014
Revenues
Agency commissions	$	117,991		$	121,415
Principal transactions	47,010			51,689
Total brokerage revenues	165,001			173,104
Clearing services revenues	21,338			34,164
Interest income from clearing services	297			528
Equity in net earnings of unconsolidated businesses	1,564			2,554
Software, analytics and market data	25,756			25,765
Other income, net	17,566			4,624
Total revenues	231,522			240,739
Interest and transaction-based expenses
Transaction fees on clearing services	20,495			32,640
Transaction fees on brokerage services	5,283			5,503
Interest expense from clearing services	128			169
Total interest and transaction-based expenses	25,906			38,312
Revenues, net of interest and transaction-based expenses	205,616			202,427
Expenses
Compensation and employee benefits	147,217			137,697
Communications and market data	12,042			13,347
Travel and promotion	6,383			7,779
Rent and occupancy	6,927			8,086
Depreciation and amortization	7,321			8,596
Professional fees	18,436			6,171
Interest on borrowings	7,868			7,784
Merger termination fees	24,728			—
Other expenses	6,233			7,464
Total other expenses	237,155			196,924
(Loss) income before (benefit from) provision for income taxes	(31,539		)	5,503
(Benefit from) provision for income taxes	(12,392		)	1,094
Net (loss) income before attribution to non-controlling stockholders	(19,147		)	4,409
Less: Net income attributable to non-controlling interests	776			406
GFI’s net (loss) income	$	(19,923	)	$	4,003
Earnings per share available to common stockholders
Basic	$	(0.16	)	$	0.03
Diluted	$	(0.16	)	$	0.03
Weighted average shares outstanding
Basic	127,339,178			122,362,839
Diluted	127,339,178			131,430,701
Dividends declared per share of common stock	$	0.00		$	0.05

See notes to condensed consolidated financial statements

5

GFI GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

(In thousands)

	Three Months Ended March 31,
	2015			2014
Net (loss) income before attribution to non-controlling stockholders	$	(19,147	)	$	4,409
Other comprehensive (loss) income:
Foreign currency translation adjustment	(6,250		)	2,241
Unrealized loss on available-for-sale securities, net of tax(1)	—			(1,069)
Total other comprehensive (loss) income	(6,250		)	1,172
Comprehensive (loss) income including non-controlling stockholders	(25,397		)	5,581
Comprehensive income attributable to non-controlling stockholders	319			412
GFI’s comprehensive (loss) income	$	(25,716	)	$	5,169

(1)Amounts are net of benefit from income taxes of $0 and $341 for the three months ended March 31, 2015 and 2014, respectively.

See notes to condensed consolidated financial statements

6

GFI GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Three Months Ended March 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income before attribution to non-controlling stockholders	$	(19,147	)	$	4,409
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	7,321			8,596
Deferred compensation	15,223			7,357
Tax expense related to share-based compensation	(8		)	812
Amortization of prepaid bonuses and forgivable loans	4,831			6,720
Benefit from deferred taxes	(16,664		)	(3,936		)
Gains on foreign exchange derivative contracts, net	(3,601		)	(202		)
Earnings from equity method investments, net	(66		)	(663		)
Amortization of deferred financing fees	472			454
Mark-to-market of contingent consideration liabilities	115			28
Impairment charges	—			611
Other non-cash charges, net	360			(392		)
(Increase) decrease in operating assets:
Cash and securities segregated under federal and other regulations	9,479			(205		)
Accounts receivable	(11,939		)	(21,562		)
Receivables from brokers, dealers and clearing organizations	(637,547		)	(556,054		)
Other assets	(9,405		)	(6,268		)
Increase (decrease) in operating liabilities:
Accrued compensation	(34,258		)	(11,894		)
Accounts payable and accrued expenses	8,976			7,812
Payables to brokers, dealers and clearing organizations	598,629			513,521
Payables to clearing services customers	10,244			22,451
Other liabilities	11,523			7,420
Cash used in operating activities	(65,462		)	(20,985		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposition of consolidated subsidiary, net	1,982			—
Proceeds from disposition of interests in unconsolidated businesses	—			6,044
Return of capital from unconsolidated businesses	—			413
Proceeds from disposition of available-for-sale securities	—			5,882
Purchases of interests in unconsolidated businesses	—			(92		)
Purchases of property, equipment and leasehold improvements	(992		)	(2,628		)
Cash used for loans to related parties	(60,000		)	—
Capitalization of internally developed software	(1,907		)	(2,752		)
Proceeds on foreign exchange derivative contracts	3,277			271
Payments on foreign exchange derivative contracts	(335		)	(338		)
Other, net	(5		)	257
Cash (used in) provided by investing activities	(57,980		)	7,057

See notes to condensed consolidated financial statements

7

GFI GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

(In thousands)

	Three Months Ended March 31,
	2015			2014
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings	75,000			$	47,000
Repayment of short-term borrowings	(25,000		)	(47,000		)
Cash dividends paid to common stockholders	—			(6,188		)
Shares withheld for taxes on vested restricted stock units	(495		)	(5,174		)
Tax benefit (expense) related to share-based compensation	8			(812		)
Other, net		(176	)		456
Cash provided by (used in) financing activities		49,337			(11,718	)
Effects of exchange rate changes on cash and cash equivalents	(3,348		)	84
Decrease in Cash and cash equivalents classified as Held for sale	25,891			—
DECREASE IN CASH AND CASH EQUIVALENTS	(51,562		)	(25,562		)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		183,432			174,606
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	131,870		$	149,044
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest	$	13,608		$	13,635
Cash paid for income taxes	$	3,651		$	2,718
Cash received from income tax refunds	$	138		$	675
Non-Cash Investing and Financing Activities:
Purchase of property and equipment through seller financing arrangement	$	894		$	—

See notes to condensed consolidated financial statements

8

GFI GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(In thousands)

	Common Stock		Additional Paid In Capital		Treasury Stock			Retained Deficit			Accumulated Other Comprehensive Loss		Total Stockholders’ Equity			Non- Controlling Interests			Total Equity
Balance, January 1, 2015	$	1,442	$  399,774		$	(73,445	)	$	(31,050	)	$           (2,493	)	$	294,228		$	1,906		$  296,134
Issuance of treasury stock	—		(77	)	77			—			—		—			—			—
Issuance of common stock for exercise of stock options and vesting of restricted stock units	2		(441	)	—			—			—		(439		)	—			(439	)
Withholding of restricted stock units in satisfaction of tax requirements	—		(572	)	—			—			—		(572		)	—			(572	)
Tax expense associated with share-based awards	—		8		—			—			—		8			—			8
Foreign currency translation adjustment	—		—		—			—			(5,793	)	(5,793		)	(457		)	(6,250	)
Share-based compensation	—		3,276		—			—			—		3,276			—			3,276
Conversion of restricted stock units to deferred cash awards	—		(22,244	)	—			—			—		(22,244		)	—			(22,244	)
Other capital adjustments	—		(14	)	—			—			—		(14		)	(1		)	(15	)
Net (loss) income	—		—		—			(19,923		)	—		(19,923		)	776			(19,147	)
Balance, March 31, 2015	$	1,444	$  379,710		$	(73,368	)	$	(50,973	)	$           (8,286	)	$	248,527		$	2,224		$  250,751

See notes to condensed consolidated financial statements

9

1.     ORGANIZATION AND BUSINESS

The Condensed Consolidated Financial Statements include the accounts of GFI Group Inc. and its subsidiaries (collectively, “GFI” or the “Company”). The Company, through its subsidiaries, provides wholesale brokerage and trade execution services, clearing services and trading system software products to institutional clients in markets for a range of fixed income, financial, equity and commodity instruments. The Company complements its brokerage and trade execution capabilities with value-added services, such as market data and analytical software products for trader and back-office support, which it licenses primarily to companies in the financial services industry.  The Company is majority-owned by, and operates as a division of BGC Partners, Inc. (together with its affiliates, “BGC”), which owned approximately 56% of the Company’s outstanding shares of common stock as of March 31, 2015. See Note 2 for further information on the acquisition by BGC. In addition, as of March 31, 2015, Jersey Partners, Inc. (“JPI”) owned approximately 36% of the Company’s outstanding shares of common stock. The Company’s executive chairman, Michael Gooch, is the controlling shareholder of JPI.

2.      ACQUISITION BY BGC PARTNERS, INC. AND TERMINATION OF THE CME MERGER

On February 19, 2015, the Company, BGC and BGC Partners, L.P. entered into a Tender Offer Agreement pursuant to which BGC and BGC Partners, L.P. agreed to amend their previously commenced tender offer to purchase all of the outstanding shares of common stock of the Company for $6.10 per share.  On February 26, 2015, BGC successfully completed the BGC Tender and on March 4, 2015 BGC Partners, L.P. paid for the 54,274,212 shares of Common Stock tendered pursuant to the BGC Tender for an aggregate purchase price of $331,073. The tendered shares, together with the 17,120,464 shares already owned by BGC, represented approximately 56% of the outstanding shares of the Company’s common stock as of March 31, 2015.   See Note 20 on Subsequent events for further information.

As a result of the transaction, GFI is a controlled company of BGC and operates as a division of BGC. Going forward, BGC and GFI are expected to remain separately branded divisions.

Prior to the completion of the tender offer, the Company was a party to a series of agreements, including an Agreement and Plan of Merger (the “CME Merger Agreement”) and a Purchase Agreement (the “IDB Purchase Agreement”), each dated as of July 30, 2014, as amended, with CME Group Inc. (“CME”) and certain of its affiliates, whereby the Company had agreed to merge with and into a wholly owned subsidiary of CME (the “CME Merger”) and, immediately following such merger, a private consortium of current GFI management would acquire the Company’s wholesale brokerage and clearing businesses from CME (such transactions collectively, the “CME Transaction”). In addition, CME, JPI and certain other stockholders of GFI, who collectively control approximately 38% of the outstanding shares of our common stock, entered into an agreement, dated as of July 30, 2014 (the “Support Agreement”), that provided for such stockholders to vote for the CME Transaction and vote against any alternative transaction and that prevented such stockholders from transferring their shares, including by tendering into the tender offer. The CME Merger Agreement and the CME Transaction were terminated on January 30, 2015. The restrictions in the Support Agreement continue until on or about January 30, 2016.

Pursuant to the terms of the CME Merger Agreement, the Company was required to reimburse CME for its expenses up to $7,065and such reimbursement was paid in February 2015. Additionally, the Company was required to pay CME a termination fee equal to $17,663(which is the total termination fee of $24,728 less the expense reimbursement that has already been paid to CME) and such transaction fee was paid in March 2015. The termination fee was payable if within 12 months of such termination the Company consummated, or entered into a definitive agreement to consummate, a transaction in which the Company or 20% or more of the fair value of the assets or of any class of equity or voting securities of the Company and its subsidiaries, the subsidiaries that were to be retained by CME in the CME Merger Agreement, or Trayport or Fenics was sold.

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation— The Company’s Condensed Consolidated Financial Statements (Unaudited) are prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingencies in the Condensed Consolidated Financial Statements. Certain estimates and assumptions relate to the accounting for acquired goodwill and intangible assets, fair value measurements, compensation accruals, tax liabilities and the potential outcome of litigation matters. Management believes that the estimates utilized in the preparation of the Condensed Consolidated Financial Statements are reasonable and prudent. Actual results could differ materially from these estimates.

10

Certain amounts in the Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current year presentation.

These Condensed Consolidated Financial Statements are unaudited and should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”). The condensed consolidated financial information as of December 31, 2014 presented in this Form 10-Q has been derived from audited Consolidated Financial Statements not included herein.

These unaudited Condensed Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These adjustments are of a normal, recurring nature. Interim period operating results may not be indicative of the operating results for a full year.

Consolidation Policies

General— The Condensed Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and subsidiaries that are treated as such and other entities in which the Company has a controlling financial interest. For consolidated subsidiaries that are less than wholly-owned, equity interests that are not owned by the Company are referred to as non-controlling interests. The portion of net income attributable to non-controlling interests for such subsidiaries is presented as Net income attributable to non-controlling interests on the Condensed Consolidated Statements of Operations, and the portion of the stockholders’ equity of such subsidiaries is presented as Non-controlling interests in the Condensed Consolidated Statements of Financial Condition and Condensed Consolidated Statement of Changes in Stockholders’ Equity. All intercompany transactions and balances have been eliminated.

Variable Interest Entities—The Company determines whether it holds any interests in entities deemed to be a variable interest entity (“VIE”). A VIE is an entity that lacks one or more of the following characteristics (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The Company has a controlling financial interest and will consolidate a VIE if it is the primary beneficiary.

The primary beneficiary is the party that has both (i) the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and (ii) the obligation to absorb losses of the entity that could be potentially significant to the VIE or the right to receive benefits from the entity that could be potentially significant. As of March 31, 2015, the Company holds interests in certain VIEs. One of these VIEs is consolidated because it was determined that the Company is the primary beneficiary of this VIE because (1) the Company provided the majority of the VIE’s start-up capital and (2) the Company has consent rights regarding those activities that the Company believes would most significantly impact the economic performance of the entity. The remaining VIEs are not consolidated as it was determined that the Company is not the primary beneficiary due to the level of equity ownership and voting power.  The Company reassesses its evaluation of whether an entity is a VIE when certain events occur, such as changes in economic ownership and voting power.  The Company reassesses its determination of whether it is the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.  See Note 16 for disclosures on Variable Interest Entities.

Cash and Cash Equivalents— Cash and cash equivalents consist of cash and highly liquid investments purchased with an original maturity of three months or less. Cash and cash equivalents are categorized within Level 1 of the fair value hierarchy.

Cash and Securities Segregated Under Federal and Other Regulations—The Company holds cash and securities representing funds received in connection with customer trading activities. The Company’s subsidiaries are required to satisfy regulations mandated by their primary regulators to segregate or set aside cash or equivalent securities to satisfy regulations, promulgated to protect customer assets.

Accounts Receivable —Accounts receivable largely represents commissions due from brokers, dealers, banks and other financial and nonfinancial institutions for the execution of securities, commodities, foreign exchange and other derivative brokerage transactions. Also, included within Accounts receivable are the billed portion of existing contracts from customers related to the licensing, support and maintenance of software, analytics and market data, as well as any unbilled but earned portion of any services provided to such customers. In estimating the allowance for doubtful accounts, management considers the length of time receivables are past due and historical experience. In addition, if the Company is aware of a client’s inability to meet its financial obligations, a specific provision for doubtful accounts is recorded in the amount of the estimated losses that will result from the inability of that client to meet its financial obligation.

11

Receivables from and Payables to Brokers, Dealers and Clearing Organizations—Receivables from and payables to brokers, dealers and clearing organizations primarily represent: (i) principal transactions for which the stated settlement dates have not yet been reached, (ii) principal transactions which have not settled as of their stated settlement dates, (iii) cash, including deposits, held at clearing organizations and exchanges in support of the Company’s clearing business and to facilitate settlement and clearance of matched principal transactions and (iv) the spread on matched principal transactions that have not yet been remitted from/to clearing organizations and exchanges.

Property, Equipment and Leasehold Improvements—Property, equipment and leasehold improvements are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method, generally over three to seven years. Property and equipment are depreciated over their estimated useful lives. Leasehold improvements are amortized over the shorter of the remaining term of the respective lease to which they relate or the remaining useful life of the leasehold improvement. Internal and external costs incurred in developing or obtaining computer software for internal use are capitalized in accordance with Accounting Standards Codification (“ASC”) 350 Intangibles—Goodwill and Other (“ASC 350”), and are amortized on a straight-line basis over the estimated useful life of the software, generally three years. General and administrative costs related to developing or obtaining such software are expensed as incurred.

Goodwill and Intangible Assets—Goodwill represents the excess of the purchase price allocation over the fair value of tangible and identifiable intangible net assets acquired. The goodwill associated with each business combination is allocated to the related reporting units, which are determined based on how the Company’s businesses are managed and how they are reviewed by the Company’s chief operating decision maker. Other intangible assets are recorded at their fair value upon completion of a business combination or certain other transactions. Substantially all of the firm’s identifiable intangible assets are considered to have definite lives and are amortized on a straight-line basis over their estimated useful lives.

In accordance with ASC 350, goodwill is not amortized, but instead is periodically tested for impairment. The Company reviews goodwill for impairment on an annual basis as of November 1 of each fiscal year or whenever an event occurs or circumstances change that could reduce the fair value of a reporting unit below its carrying amount. See Note 6 for further information.

Prepaid Bonuses and Forgivable Employee Loans—Prepaid bonuses and forgivable loans to employees are stated at historical value net of amortization when the agreement between the Company and the employee provides for the return of proportionate amounts of the bonus or loan outstanding if employment is terminated in certain circumstances prior to the end of the term of the agreement. Amortization is calculated using the straight-line method over the term of the contract, which is generally two to four years, and is recorded in Compensation and employee benefits. The Company generally expects to recover the unamortized portion of prepaid bonuses and forgivable loans when employees voluntarily terminate their employment or if their employment is terminated for cause prior to the end of the term of the agreement. The prepaid bonuses and forgivable loans are included in Other assets in the Condensed Consolidated Statements of Financial Condition. At March 31, 2015 and December 31, 2014, the Company had prepaid bonuses of $15,905 and $16,523, respectively. At March 31, 2015 and December 31, 2014, the Company had forgivable employee loans and advances to employees of $15,022 and $15,072, respectively. Amortization of prepaid bonuses and forgivable employee loans for the three months ended March 31, 2015 and 2014 was $4,831 and $6,720, respectively and is included within Compensation and employee benefits.

Investments—When the Company does not have a controlling financial interest in an entity but can exert significant influence over the entity’s operating and financial policies, the investment is accounted for under the equity method of accounting in accordance with ASC 323-10, Investments—Equity Method and Joint Ventures (“ASC 323-10”). Significant influence generally exists when the Company owns 20% to 50% of the entity’s common stock or in-substance common stock. The Company initially records the investment at cost and adjusts the carrying amount each period to recognize its share of the earnings and losses of the investee based on the percentage of ownership. At March 31, 2015 and December 31, 2014, the Company had equity method investments with a carrying value of $12,842 and $13,184, respectively, included within Other assets. The Company also provides clearing and other administrative services to certain of these equity method investees.

Investments for which the Company does not have the ability to exert significant influence over operating and financial policies are generally accounted for using the cost method of accounting in accordance with ASC 325-10, Investments—Other (“ASC 325-10”). At March 31, 2015 and December 31, 2014, the Company had cost method investments of $1,533 and $1,688, respectively, included within Other assets.  The fair value of the Company’s cost method investments are not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value. The Company monitors its equity and cost method investments for indicators of impairment each reporting period.

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The Company accounts for its marketable equity securities and its debt securities in accordance with ASC 320-10, Investments—Debt and Equity Securities (“ASC 320-10”). Investments that are owned by the Company’s broker-dealer subsidiaries are recorded at fair value with realized and unrealized gains and losses reported in net (loss) income. Investments designated as available-for-sale that are owned by the Company’s non broker-dealer subsidiaries are recorded at fair value with unrealized gains or losses reported as a separate component of other comprehensive (loss) income, net of tax.  The fair value of the Company’s available-for-sale securities was $98 and $0 as of March 31, 2015 and December 31, 2014, respectively, and is included within Other assets.

Fair Value of Financial Instruments—In accordance with ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), the Company estimates fair values of financial instruments using relevant market information and other assumptions. Fair value estimates involve uncertainties and matters of significant judgment in interpreting market data and, accordingly, changes in assumptions or in market conditions could adversely affect the estimates. The Company also discloses the fair value of its financial instruments in accordance with the fair value hierarchy as set forth by ASC 820-10. See Note 14 for further information.

Derivative Financial Instruments—The Company enters into derivative transactions for a variety of reasons, including managing its exposure to risk arising from changes in foreign currency, facilitating customer trading activities and, in certain instances, to engage in principal trading for the Company’s own account. Derivative assets and liabilities are carried on the Condensed Consolidated Statements of Financial Condition at fair value, with changes in the fair value recognized in the Condensed Consolidated Statements of Operations. Contracts entered into to manage risk arising from changes in foreign currency are recognized in Other income, net and contracts entered into to facilitate customer transactions and principal trading are recognized in Principal transactions. Derivatives are reported on a net-by-counterparty basis when management believes that a legal and enforceable right of offset exists under these agreements. See Note 15 for further information.

Payables to Clearing Services Customers—Payables to clearing services customers include amounts due on cash and margin transactions, including futures contracts transacted on behalf of customers.

Revenue Recognition

Brokerage Transactions—The Company provides brokerage services to its clients in the form of either agency or principal transactions. In agency transactions, the Company charges commissions for executing transactions between buyers and sellers. Agency commission revenues and related expenses are recognized on a trade date basis. These revenues are presented in “Agency Commissions”.  Principal transactions revenue is primarily derived from matched principal and principal trading transactions. Principal transactions revenues and related expenses are recognized on a trade date basis. The Company earns revenue from principal transactions on the spread between the buy and sell price of the security that is brokered. In matched principal transactions, the Company simultaneously agrees to buy instruments from one customer and sell them to another customer. These revenues are presented in “Principal Transactions”.  In the normal course of its matched principal and principal trading businesses, the Company may hold security positions overnight. These positions are marked to market on a daily basis.

Clearing Services Revenues—The Company charges fees to customers for clearing services provided for cash and derivative transactions. Clearing services revenues are recorded on a trade date basis as customer transactions occur and are presented net of any customer negotiated rebates.

Software, Analytics and Market Data Revenue Recognition— Software revenue consists primarily of fees charged for Trayport electronic trading software, which are typically billed on a subscription basis and are recognized ratably over the term of the subscription period, which ranges from one to five years. Analytics revenue consists primarily of software license fees for Fenics pricing tools which are typically billed on a subscription basis, and is recognized ratably over the term of the subscription period, which is generally three years. Market data revenue primarily consists of subscription fees and fees from customized one-time sales. Market data subscription fees are recognized on a straight-line basis over the term of the subscription period, which ranges from one to two years. Market data revenue from customized one-time sales is recognized upon delivery of the data. The Company markets its software, analytics and market data products through its direct sales force and, in some cases, indirectly through resellers. In general, the Company’s license agreements for such products do not provide for a right of return.

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Other Income, net—Included within Other income, net on the Company’s Condensed Consolidated Statements of Operations are revaluations of foreign currency derivative contracts, realized and unrealized transaction gains and losses on certain foreign currency denominated items, and gains and losses on certain investments, and interest income earned on short-term investments.

Compensation and Employee Benefits—The Company’s compensation and employee benefits have both a fixed and variable component. Base salaries and benefit costs are primarily fixed for all employees while bonuses constitute the variable portion of compensation and employee benefits. The Company has historically paid certain performance bonuses in restricted stock units (“RSUs”).  All RSUs which were outstanding immediately prior to the completion of BGC’s tender offer were converted into the right to receive cash, subject to the terms of each award’s pre-existing vesting schedule.  During the three months ended March 31, 2015, the Company paid certain performance bonuses in deferred cash awards. The Company also may grant sign-on and retention bonuses for certain newly-hired or existing employees who agree to long-term employment agreements.

Share-Based Compensation—The Company’s share-based compensation had consisted of RSUs. The Company accounts for share-based compensation in accordance with ASC 718 Compensation— Stock Compensation (“ASC 718”). This accounting guidance requires measurement of compensation expense for equity-based awards at fair value and recognition of compensation expense over the service period, net of estimated forfeitures. In all periods presented, the only share-based compensation expense recognized by the Company has been RSUs. The Company determines the fair value of RSUs based on the number of units granted and the grant date fair value of the Company’s common stock, measured as of the closing price on the date of grant. As discussed in further detail in Note 11, during the first quarter of 2015, the Company converted all RSUs which were outstanding immediately prior to the completion of BGC’s tender offer into the right to receive cash, subject to the terms of each award’s pre-existing vesting schedule.

Deferred Cash Compensation—The Company accounts for deferred cash compensation in accordance with ASC 710 Compensation— General (“ASC 710”). This accounting guidance requires measurement of deferred compensation expense for non-equity-based awards based upon future amounts expected to be paid, and provides for recognition of compensation expense over the expected service period, net of estimated forfeitures. See Note 11 for further information.

Income Taxes— In accordance with ASC 740, Income Taxes (“ASC 740”), the Company provides for income taxes using the asset and liability method under which deferred income taxes are recognized for the estimated future tax effects attributable to temporary differences and carryforwards that result from events that have been recognized either in the financial statements or the income tax returns, but not both. The measurement of current and deferred income tax assets and liabilities is based on provisions of enacted tax laws. Valuation allowances are recognized if, based on the weight of available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. Management applies the more likely than not criteria prior to recognizing a financial statement benefit for a tax position taken (or expected to be taken) in a tax return. The Company recognizes interest and/or penalties related to income tax matters in interest expense and other expense, respectively.

The Company recorded a benefit from income taxes of $12,392 for the three months ended March 31, 2015, as compared to a provision for income taxes of $1,094 for the three months ended March 31, 2014.  The change from provision for income taxes to benefit from income taxes was primarily due to an allowable U.S. income tax deduction as a result of the merger termination fee paid to CME following the termination of the CME Merger Agreement in January 2015. The effective tax rates for both periods were impacted by a geographical mix of pre-tax profits and losses.

Treasury Stock—The Company accounts for Treasury stock using the cost method. Treasury stock held by the Company may be reissued with respect to vested RSUs in qualified jurisdictions. The Company’s policy is to account for these shares as a reduction of Treasury stock on a first-in, first-out basis.

Foreign Currency Translation Adjustments and Transactions— Assets and liabilities of foreign subsidiaries having non-U.S. dollar functional currencies are translated at the period end rates of exchange, and revenue and expenses are translated at the average rates of exchange for the period. Gains or losses resulting from translating foreign currency financial statements are reflected in foreign currency translation adjustments and are reported as a separate component of comprehensive (loss) income and included in accumulated other comprehensive income in the Condensed Consolidated Statement of Changes in Stockholders’ Equity. The revaluation of asset and liability balances that are denominated in currencies other than the functional currency of the business unit involved in such transactions is reflected in Other Income, net in the Condensed Consolidated Statements of Operations. Net losses resulting from remeasurement of foreign currency transactions and balances were $1,038 and $92 for the three months ended March 31, 2015 and 2014, respectively.

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Recent Accounting Pronouncements— In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 changes the criteria for disposals to qualify as discontinued operations and requires new disclosures about disposals of both discontinued operations and certain other disposals that do not meet the new definition. The guidance was effective for the Company’s fiscal year beginning January 1, 2015. The adoption of ASU 2014-08 has not had a material impact on the Company’s Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 defines how companies report revenues from contracts with customers, and also requires enhanced disclosures. The guidance is effective beginning in the first quarter of fiscal 2017. The Company is currently evaluating the impact of the new guidance on the Company’s Consolidated Financial Statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about the Company’s ability to continue as a going concern, and if so, to provide related footnote disclosures. The guidance is effective for the Company’s 2016 annual financial statements. The Company is currently evaluating the impact of the new guidance on the Company’s Consolidated Financial Statements.

In November 2014, the FASB issued ASU No. 2014-17, Business Combinations  (Topic 805) - Pushdown Accounting (“ASU 2014-17”). ASU 2014-17 provides an acquired entity the option of applying pushdown accounting in its stand-alone financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The Company adopted this guidance on November 18, 2014, the effective date of ASU 2014-17.  In conjunction with the Company’s February 2015 acquisition by BGC, the Company has elected not to apply pushdown accounting on the Condensed Consolidated Financial Statements for the three months ended March 31, 2015, the reporting period in which the change-in-control event occurred.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 eliminates the deferral of certain consolidation standards for entities considered to be investment companies and modifies the consolidation analysis performed on certain types of legal entities. The guidance is effective beginning in the first quarter of fiscal 2017 and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its Condensed Consolidated Financial Statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be reported on the Consolidated Statements of Financial Condition as a direct deduction from the carrying amount of that debt liability. The guidance is effective for the Company retrospectively beginning in the first quarter of fiscal 2017 and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its Condensed Consolidated Financial Statements.

4. DISPOSALS AND ASSETS AND LIABILITIES HELD FOR SALE

On January 24, 2015, the Company entered into an agreement to sell 100% equity ownership of The Kyte Group Limited (“KGL”), which primarily included the Company’s clearing business.  The Company determined that as of December 31, 2014, KGL met the criteria for classification as held for sale and, accordingly, its assets and liabilities were included in Assets held for sale and Liabilities held for sale on the Condensed Consolidated Statements of Financial Condition as of December 31, 2014, net of $4.1 million of asset impairment, resulting from a write-down to the carrying value of its long-lived assets. The transaction was completed in March 2015. KGL’s operations prior to the completion of the transaction are included in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014 and within the Clearing and Backed Trading reportable segment.

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The major classes of the total consolidated assets and liabilities of KGL that were classified as held for sale at December 31, 2014 were as follows:

	December 31,
	2014
Assets
Cash and cash equivalents	$	24,957
Cash and securities segregated under federal and other regulations	52,160
Accounts receivable, net	1,348
Receivables from brokers, dealers and clearing organizations	90,634
Property, equipment and leasehold improvements, net	1,944
Intangible assets, net	4,302
Other assets (1)	680
Asset impairment	(4,061		)
Total assets held for sale	$	171,964
Liabilities
Accrued compensation	1,545
Accounts payable and accrued expenses	849
Payables to clearing services customers (2)	142,108
Other liabilities	1,397
Total liabilities held for sale	$	145,899

(1)Excludes $570 of receivables from consolidated affiliates that has been eliminated for the purposes of presentation on the Consolidated Statement of Financial Condition.

(2)Excludes $12,499 of payables to consolidated affiliates that has been eliminated for the purposes of presentation on the Consolidated Statement of Financial Condition.

On February 3, 2015, the Company entered into an agreement to sell 100% equity ownership of Kyte Broking Limited (“KBL”). The Company determined that KBL met the criteria for classification as held for sale and, as a result, its assets and liabilities have been included in Assets held for sale and Liabilities held for sale on the Condensed Consolidated Statements of Financial Condition as of March 31, 2015 and December 31, 2014.  The Company believes that no impairment exists as the fair value of the net assets related to KBL less the costs to sell the business will exceed the related carrying value. The transaction is expected to close in the second quarter of 2015.

The major classes of the total consolidated assets and liabilities of KBL that were classified as held for sale at March 31, 2015 and December 31, 2014 were as follows:

	March 31,		December 31,
	2015		2014
Assets
Cash and cash equivalents	$	12,238	$	13,172
Accounts receivable, net	8,664		7,398
Receivables from brokers, dealers and clearing organizations	2,040		659
Property, equipment and leasehold improvements, net	157		178
Other assets	155		330
Total assets held for sale	$	23,254	$	21,737
Liabilities
Accounts payable and accrued expenses	18,012		15,990
Other liabilities	141		25
Total liabilities held for sale	$	18,153	$	16,015

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5.     RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS

Amounts receivable from and payable to brokers, dealers and clearing organizations consisted of the following:

	March 31, 2015		December 31, 2014
Receivables from brokers, dealers and clearing organizations:
Contract value of fails to deliver	$	1,061,593	$	458,718
Receivables from and deposits with clearing organizations and financial institutions (1)	59,875		48,630
Net pending trades	—		253
Total	$	1,121,468	$	507,601
Payables to brokers, dealers and clearing organizations:
Contract value of fails to receive	$	1,045,537	$	462,747
Payables to clearing organizations and financial institutions	13,380		496
Net pending trades	2,955		—
Total	$	1,061,872	$	463,243

(1)Excluded from the March 31, 2015 balance is $2,040 of Receivables from and deposits with clearing organizations and financial institutions related to KBL. Excluded from the December 31, 2014 balance is $91,293 of Receivables from and deposits with clearing organizations and financial institutions related to KGL and KBL. As discussed in Note 4, such amounts are included in Assets held for sale.

Substantially all fail to deliver and fail to receive balances at March 31, 2015 and December 31, 2014 have subsequently settled at the contracted amounts.

In addition to the balances above, the Company had Payables to clearing services customers of $142,108 at December 31, 2014 associated with the KGL clearing business, which was included in Liabilities held for sale.  These amounts represented cash which had been payable to the Company’s clearing customers that was held with the Company’s third-party general clearing members and were included within Cash and cash equivalents, Cash and securities segregated under federal and other regulations or Receivables from brokers, dealers and clearing organizations as follows:

	December 31, 2014
Cash and cash equivalents	11,162
Cash segregated under federal and other regulations	52,160
Receivables from brokers, dealers, and clearing organizations	78,786
Total	$	142,108

As the transaction to sell KGL was completed in March 2015 the Company had no Payables to clearing service customers as of March 31, 2015.  See Note 4 for further information on the sale of KGL.

6.     GOODWILL AND INTANGIBLE ASSETS

Goodwill—Changes in the carrying amount of the Company’s goodwill for the three months ended March 31, 2015 were as follows:

	December 31,2014		Goodwillacquired		Impairment charges		Adjustments		Foreign currency translation			March 31,2015
Goodwill
All other	134,542		—		—		—		(184		)	134,358
	$	134,542	$	—	$	—	$	—	$	(184	)	$	134,358

Goodwill is required to be tested for impairment at least annually and more frequently when indicators of impairment exist. All of the Company’s goodwill is allocated to its reporting units and the goodwill impairment tests are performed at the reporting unit level. The Company determined its reporting units to be Americas Brokerage; Europe, Middle East and Africa (“EMEA”) Brokerage; Asia Brokerage; Clearing and Backed Trading; Trayport; and Fenics.

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No events or changes in circumstances which would indicate goodwill impairment occurred at the Trayport and Fenics reporting units, the Company’s reporting units with remaining goodwill balances, in the three months ended March 31, 2015.

Intangible Assets—Intangible assets consisted of the following:

	March 31, 2015						December 31, 2014
	Gross amount		Accumulated amortization and foreign currency translation		Net carrying value		Gross amount		Accumulated amortization and foreign currency translation		Net carrying value (1)
Amortized intangible assets:
Customer relationships	$	62,334	$	40,604	$	21,730	$	62,334	$	39,203	$	23,131
Trade names	7,904		6,851		1,053		7,904		6,750		1,154
Core technology	8,697		4,508		4,189		8,697		4,105		4,592
Non-compete agreements	3,756		3,434		322		3,756		3,429		327
Patents	3,131		1,844		1,287		3,131		1,719		1,412
Other	647		386		261		647		358		289
Total	$	86,469	$	57,627	$	28,842	$	86,469	$	55,564	$	30,905

(1)Excluded from net carrying value as of December 31, 2014 is $3,715 of customer relationships,  $576 of trade names and $11 of non-compete agreements with indefinite useful lives related to KGL that were  held for sale. As discussed in Note 4, such amounts were included in Assets held for sale as of December 31, 2014 prior to the disposal of KGL during the first quarter of 2015.

Intangible amortization expense for the three months ended March 31, 2015 and 2014 was $1,657 and $2,469, respectively.

At March 31, 2015, expected amortization expense for the definite lived intangible assets is as follows:

2015	$	4,842
2016	5,941
2017	4,117
2018	3,298
2019	3,081
Thereafter	7,563
Total	$	28,842

7.     OTHER ASSETS AND OTHER LIABILITIES

Other assets consisted of the following:

	March 31,2015		December 31, 2014
Deferred tax assets	$	108,561	$	91,935
Prepaid bonuses	15,905		16,523
Forgivable employee loans and advances to employees	15,022		15,072
Investments accounted for under the cost method and equity method	14,375		14,872
Financial instruments owned	5,302		3,865
Deferred financing fees	4,566		5,038
Software inventory, net	3,414		3,435
Other	26,714		21,981
Total Other assets	$	193,859	$	172,721

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Other liabilities consisted of the following:

	March 31,2015		December 31, 2014
Payroll related liabilities	$	29,105	$	12,522
Deferred revenues	9,252		7,993
Deferred rent liabilities	8,494		8,657
Unrecognized tax benefits	7,983		8,396
Income taxes payable	6,353		5,384
Interest payable	6,317		12,457
Deferred tax liabilities	4,591		4,726
Financial instruments sold, not yet purchased	2,166		1,387
Other	8,598		8,748
Total Other liabilities	$	82,859	$	70,270

8.     SHORT-TERM BORROWINGS AND LONG-TERM DEBT

The Company’s outstanding debt obligations consisted of the following:

		March 31,	December 31,
		2015	2014
8.375% Senior Notes due 2018	$	240,000	$	240,000
Loans pursuant to Credit Agreement		60,000	10,000
Total	$	300,000	$	250,000

The Company’s debt obligations are carried at historical amounts. The fair value of the Company’s Long-term debt obligations, categorized within Level 2 of the fair value hierarchy, is measured primarily using pricing service data from external providers.  The carrying amounts and estimated fair values of the Company’s Long-term debt obligations are as follows:

		March 31, 2015				December 31, 2014
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
8.375% Senior Notes	$	240,000	$	264,528	$	240,000	$	272,568

8.375% Senior Notes

In July 2011, the Company issued $250,000 in aggregate principal amount of 8.375% Senior Notes (the “8.375% Senior Notes”) due 2018 in a private offering (the “Offering”) to qualified institutional buyers pursuant to Rule 144A and to certain persons in offshore transactions pursuant to Regulation S, each under the Securities Act of 1933, as amended (the “Securities Act”).  The notes were priced to investors at 100% of their principal amount, and mature in July 2018. Interest on these notes is payable, semi-annually in arrears on the 19th of January and July. Transaction costs of approximately $9,100 related to the 8.375% Senior Notes were deferred and are being amortized over the term of the notes.  On December 21, 2011, the Company completed an exchange offer for the 8.375% Senior Notes whereby it exchanged $250,000 in aggregate principal amount of the 8.375% Senior Notes for 8.375% Senior Notes that are registered under the Securities Act.

In March 2013, the Company repurchased $10,000 principal amount of its 8.375% Senior Notes on the open market for an aggregate purchase price of $9,602, including accrued interest and sales commissions. The Company funded the repurchase of these notes with borrowings under its Credit Agreement.

On January 18, 2013, Moody’s Investor Services lowered its credit rating on the Company’s 8.375% Senior Notes two notches to B1, which increased the Company’s applicable per annum interest, effective January 19, 2013, by an additional 50 basis points. On April 19, 2013, Fitch Ratings, Inc. (“Fitch”) further lowered its credit rating on the Company’s 8.375% Senior Notes two notches to BB and revised its outlook from Stable to Negative. This credit rating downgrade by Fitch increased our applicable per annum interest by an additional 50 basis points, effective July 19, 2013. On June 26, 2013, Standard & Poor’s (“S&P”) further lowered its credit rating on the Company’s 8.375% Senior Notes one notch to B+ and revised its outlook from Negative to Stable. This credit rating downgrade by S&P increased the Company’s applicable per annum interest by an additional 25 basis points, effective July 19, 2013.

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Pursuant to the terms of the 8.375% Senior Notes, the cumulative effect of downgrades to the Company’s credit rating by rating agencies subsequent to the issuance of our 8.375% Senior Notes resulted in 200 basis points penalty interest, which is the maximum increase permitted under the indenture. The additional 200 basis points of interest equates to $4,800 in additional interest expense per annum, based on the aggregate amount of outstanding principal as of March 31, 2015.

At March 31, 2015 and December 31, 2014, unamortized deferred financing fees related to the 8.375% Senior Notes of $4,108 and $4,420, respectively, were recorded within Other assets and the Company was in compliance with all applicable covenants.

Credit Agreement

In March 2013, the Company entered into an amendment to its second amended and restated credit agreement (as amended, the “Credit Agreement”) with Bank of America, N.A. and certain other lenders. The Credit Agreement provided for maximum revolving loans of up to $75,000 until December 2013, at which time $18,750 of the lender commitments were due to mature and the remaining $56,250 of lender commitments were due to mature in December 2015.

In December, 2013, the various lenders under the Credit Agreement executed an assignment and assumption agreement pursuant to which the extending lenders under the Credit Agreement assumed the lender commitments of the non-extending lender and the Company has consented to the assignment.  As a result, the borrowing capacity will remain at $75,000 until the Credit Agreement matures in December 2015. The Credit Agreement provides for up to $50,000 for letters of credit.

In February 2015, in connection with the transactions contemplated by the Tender Offer Agreement, the Company entered into a third amendment to the Credit Agreement to permit the transactions contemplated by the Tender Offer Agreement, including by amending the definition of “Change of Control” to permit BGC to acquire shares of the equity of the Company in excess of 35% without triggering a “Change of Control” under the Credit Agreement.

The Credit Agreement contains certain financial and other covenants. The financial covenants contained in our Credit Agreement require that we maintain minimum consolidated capital, as defined, of no less than $375,000 at any time.  The amendment to the Credit Agreement executed in July 2014 reduced the required minimum amount of consolidated capital by any goodwill or asset impairment charge in an aggregate amount not to exceed $160,000 contained in our financial statements in any of the fiscal quarters ending June 30, 2014, September 30, 2014 or December 31, 2014.  In April 2015, GFI entered into a fourth amendment to the Credit Agreement, whereby the minimum consolidated capital the Company is required to maintain was adjusted to $215,000. The Company was in compliance with all applicable covenants at March 31, 2015 and December 31, 2014.

Revolving loans may be either base rate loans or Eurocurrency rate loans. Eurocurrency rate loans bear interest at the annualized rate of one-month LIBOR plus the application margin and base rate loans bear interest at a rate per annum equal to a prime rate plus the applicable margin. Letter of credit fees per annum are equal to the applicable margin times the outstanding amount drawn under such letter of credit. As long as no default has occurred under the Credit Agreement, the applicable margin for base rate and Eurocurrency rate loans and letters of credit is based on a matrix that varies with a ratio of outstanding debt to EBITDA, as defined in the Credit Agreement.

The interest rate of the outstanding loan under the Credit Agreement was 5.50% at March 31, 2015. At March 31, 2015 and December 31, 2014, unamortized deferred financing fees related to the Credit Agreement of $458 and $618, respectively, were recorded within Other assets.

9.     STOCKHOLDERS’ EQUITY

On March 30, 2015, the Company filed a Form 25 with the Securities Exchange Commission (“SEC”) to voluntarily delist GFI’s common stock on the New York Stock Exchange (“NYSE”) and to terminate the registration of the common stock under the Exchange Act. The Company’s common stock was delisted on April 10, 2015 and the Company expects to file a Form 15 with the SEC to effect the deregistration of the common stock. The Company expects the deregistration of the common stock to become effective 90 days after filing the Form 15 with the SEC.

In April 2015, the Company’s Board of Directors authorized the Company to repurchase up to $50,000 of the Company’s common stock and 8.375% Senior Notes. During the three months ended March 31, 2015, and March 31, 2014 the Company did not repurchase any shares of its common stock.

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The payment of quarterly dividends was suspended by the Company’s Board during the third quarter of 2014, in conjunction with the then-pending Amended CME Merger Agreement.  Following the Company’s acquisition by BGC the payment of quarterly dividends continues to be suspended. Therefore, the Company did not pay a cash dividend during the first quarter of 2015. On March 28, 2014 the Company paid a cash dividend of $0.05 per share, which, based on the number of shares outstanding on the record date for such dividends, totaled $6,188.

10.     (LOSS) EARNINGS PER SHARE

Basic (loss) earnings per share for common stock is calculated by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted (loss) earnings per share is calculated by dividing net (loss) income by the sum of: (i) the weighted average number of shares outstanding, (ii) outstanding stock options and RSUs (using the “treasury stock” method when the impact of such options and RSUs would be dilutive), and (iii) any contingently issuable shares when dilutive.

Basic and diluted (loss) earnings per share for the three months ended March 31, 2015 and 2014 were as follows:

	Three Months Ended March 31,
	2015			2014
Basic (loss) earnings per share
GFI’s net (loss) income	$	(19,923	)	$	4,003
Weighted average common shares outstanding	127,339,178			122,362,839
Basic (loss) earnings per share	$	(0.16	)	$	0.03
Diluted (loss) earnings per share
GFI’s net (loss) income	$	(19,923	)	$	4,003
Weighted average common shares outstanding	127,339,178			122,362,839
Effect of dilutive options, RSUs, and other contingently issuable shares	—			9,067,862
Weighted average shares outstanding and common stock equivalents	127,339,178			131,430,701
Diluted (loss) earnings per share	$	(0.16	)	$	0.03

As discussed in Note 11 in further detail, all RSUs which were outstanding immediately prior to the completion of BGC’s tender offer were converted into the right to receive cash, subject to the terms of each award’s pre-existing vesting schedule, and therefore, were not subject to the computation of basic or diluted earnings per share for the three months ended March 31, 2015.

Excluded from the computation of diluted earnings per share for the three months ended March 31, 2014 because their effect would be anti-dilutive were the following:

	Three Months Ended March 31,
	2014
Stock Options	$	16,844
RSUs	286,014

Included in the computation of diluted earnings per share, but not in the computation of basic earnings per share as the conditions for issuance were not satisfied as of the respective reporting period were 1,171,879 contingently issuable shares for the three months ended March 31, 2014.

11.     DEFERRED COMPENSATION

Restricted Stock Units

Prior to the completion of BGC’s tender offer (as discussed in Note 2), the Company awarded bonuses in the form of equity awards pursuant to the  Amended and Restated GFI Group Inc. 2008 Equity Incentive Plan, (“2008 Equity Incentive Plan”) which permitted the grant of non-qualified stock options, incentive stock options, stock appreciation rights, shares of restricted stock, restricted stock units and performance units to employees, non-employee directors or consultants. The Company issued

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shares from authorized but unissued shares and authorized and issued shares reacquired and held as treasury shares, which were reserved for issuance upon the vesting of RSUs granted pursuant to the 2008 Equity Incentive Plan.  Following the acquisition by BGC, the Company filed post-effective amendments to its registration statements on Form S-8 de-registering any and all securities registered under the registration statements that remain unissued pursuant to its equity incentive and stock option plans and does not plan to issue any additional RSUs. Pursuant to the Tender Offer Agreement, each RSU of the Company outstanding immediately prior to the completion of BGC’s tender offer was converted into the right to receive an amount in cash equal to $6.10 per unit, the offer price with respect to each share underlying such award, with such cash payable on and subject to the terms and conditions of the original vesting schedule of each RSU.

The Company accounted for the conversion of RSUs into the right to receive cash as the modification of an equity award to a liability in accordance with the applicable provisions of ASC 718. Accordingly, the Company recorded incremental compensation cost on the previously recognized portion of any outstanding RSUs based upon the excess, if any, of the $6.10 per unit fair value of the modified award over the value of the original award immediately before its terms were modified.   The total unrecognized compensation cost associated with those RSUs which were outstanding when the modification was effective, will be recognized based on each award’s pre-existing vesting schedule based upon the $6.10 per unit fair value of the modified award, net of estimated forfeitures.

The following is a summary of RSU transactions under the 2008 Equity Incentive Plan:

	RSUs		Weighted- Average Grant Date Fair Value
Outstanding December 31, 2014	14,282,789		$	4.02
Granted	—		—
Vested	(393,554	)	3.71
Cancelled	(64,724	)	3.81
Converted to deferred cash awards	(13,824,511	)	4.03
Outstanding March 31, 2015	—		—

There were no RSUs granted during the three months ended March 31, 2015.The weighted average grant-date fair value of RSUs granted for the three months ended March 31, 2014 was $3.56 per unit. Total compensation expense and related income tax benefits recognized in relation to RSUs are as follows:

	Three Months Ended March 31,
	2015 (1)		2014
Compensation expense	$	17,917	$	7,356
Income tax benefits	$	5,116	$	2,099

(1)Compensation expense for the three months ended March 31, 2015 includes $11,545 of incremental compensation costs on unvested RSUs related to the modification of the RSUs.

At March 31, 2015, total unrecognized compensation cost related to the RSUs (which are to be settled in cash based on pre-existing vesting schedules) prior to the consideration of expected forfeitures was approximately $41,829 and is expected to be recognized over a weighted-average period of 1.38 years. The total fair value of RSUs vested during the three months ended March 31, 2015 and 2014 was $1,459 and $16,057, respectively.

Deferred Cash Compensation

Separate from the modification of RSUs discussed above under “Restricted Stock Units”, the Company’s Deferred Cash Award Program, which was adopted on February 12, 2013, provides for the grant of deferred cash incentive compensation to eligible employees.

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The Company may pay certain bonuses in the form of deferred cash compensation awards, which generally vest over a future service period. Total compensation expense recognized in relation to deferred cash compensation awards, not including the expense related to RSUs converted to deferred cash awards as described above, is as follows:

	Three Months Ended March 31,
	2015		2014
Compensation expense	$	325	$	11

At March 31, 2015, total unrecognized compensation cost related to deferred cash compensation prior to the consideration of expected forfeitures, not including the unrecognized portion of the RSUs converted to deferred cash awards as described above, was approximately $13,324 and is expected to be recognized over a weighted-average period of 2.81 years.

12.     COMMITMENTS AND CONTINGENCIES

Purchase Obligations—The Company has various unconditional purchase obligations. These obligations are for the purchase of market data from a number of information service providers during the normal course of business. As of March 31, 2015, the Company had total purchase commitments for market data of approximately $18,898, with $15,792 due within the next twelve months, $2,839 due between one to three years and $267 due between three and five years. Additionally, the Company had $4,574 of other purchase commitments including $4,023 for hosting and software license agreements , and $551 primarily related to network upgrades. Of these other purchase commitments, approximately $2,920 is due within the next twelve months.

Contingencies—In the normal course of business, the Company and certain of its subsidiaries included in the Condensed Consolidated Financial Statements are, and have been in the past, involved in various lawsuits and legal proceedings and are, and have been in the past, involved in certain regulatory examinations. The Company’s unresolved legal proceedings and regulatory examinations are at varying stages of adjudication, arbitration or investigation and involve a variety of claims. In view of the inherent difficulty of predicting the outcome of such litigation and regulatory matters, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties, if any, relating to each matter may be.

The Company is subject to the possibility of losses from these various contingencies. Considerable judgment is necessary to estimate the probability and amount of any loss from such contingencies. In accordance with applicable accounting guidelines, an accrual is made when it is probable that a liability has been incurred or an asset has been impaired and the amount of loss can be reasonably estimated.  Where a loss contingency is not both probable and estimable, the Company does not establish an accrued liability.

The Company is subject to regular examinations by various tax authorities in jurisdictions in which the Company has significant business operations. The Company regularly assesses the likelihood of additional tax assessments that may result from these examinations in each of the tax jurisdictions. A tax accrual has been established, which the Company believes to be adequate in relation to the potential for additional tax assessments. Once established, the accrual may be adjusted based on new information or events. The imposition of additional tax assessments, penalties or fines by a tax authority could have a material impact on the Company’s effective tax rate.

Additionally, the Company has recorded reserves for certain contingencies to which it may have exposure, such as contingencies related to the employer portion of National Insurance Contributions in the U.K.

Following the announcement of the CME Merger, nine putative class action complaints challenging the CME Merger were filed on behalf of purported stockholders of GFI (one of which also purported to be brought derivatively on behalf of GFI), two in the Supreme Court of the State of New York, County of New York, six in the Court of Chancery of the State of Delaware, and one in the United States District Court for the Southern District of New York. The complaints were captioned Coyne v. GFI Group Inc., et al., Index No. 652704/2014 (N.Y. Sup. Ct., filed September 4, 2014), Suprina v. GFI Group, Inc., et al., Index No. 652668/2014 (N.Y. Sup. Ct., filed August 29, 2014), Brown v. GFI Group Inc., et al., Civil Action No. 10082-VCL (Del. Ch., filed September 3, 2014), Hughes v. CME Group, Inc., et al., Civil Action No. 10103-VCL (Del. Ch., filed September 8, 2014), Al Ammary v. Gooch, et al., Civil Action No. 10125-VCL (Del. Ch., filed September 11, 2014), Giardalas v. GFI Group, Inc., Civil Action No. 10132-VCL (Del. Ch., filed September 15, 2014), City of Lakeland Employees’ Pension Plan v. Gooch, et al., Civil Action No. 10136-VCL (Del. Ch., filed September 16, 2014), Michocki v. Gooch., et al., Civil Action No. 10166-VCL (Del. Ch., filed September 25, 2014) and Szarek v. GFI Group Inc., et al., Case No. 14-CV-8228 (S.D.N.Y., filed October 14, 2014). On September 26, 2014,

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the Court of Chancery granted voluntary dismissal of the Giardalas action. On October 6, 2014, a consolidation order was entered by Vice Chancellor Laster, consolidating the Delaware cases into the Consolidated Delaware Action.  The consolidation order designated the complaint filed in City of Lakeland Employees’ Pension Plan v. Gooch, et al., Civil Action No. 10136-VCL (Del. Ch.) as the operative complaint in the Consolidated Delaware Action.

The complaints named as Defendants various combinations of the Company, GFI Holdco Ltd. (“IDB Buyer”), the members of the Company’s board of directors, GFI managing director Nick Brown, CME, Commodore Acquisition Corp., Commodore Acquisition LLC, Cheetah Acquisition Corp., Cheetah Acquisition LLC, JPI and New JPI Inc. (“New JPI”). The complaints generally allege, among other things, that the members of the Company’s board of directors breached their fiduciary duties to the Company’s stockholders during merger negotiations by entering into the CME Merger Agreement and approving the CME Merger, and that the Company, CME, Commodore Acquisition Corp., Commodore Acquisition LLC, IDB Buyer, Cheetah Acquisition Corp., Cheetah Acquisition LLC, JPI, and New JPI aided and abetted such breaches of fiduciary duties.  The complaints further allege, among other things, (i) that the merger consideration provided for in the CME Merger Agreement undervalued the Company, (ii) that the sales process leading up to the CME Merger was flawed due to the members of the Company’s board of directors’ and Jefferies’ conflicts of interest, and (iii) that certain provisions of the CME Merger Agreement inappropriately favored CME and precluded or impeded third parties from submitting potentially superior proposals.

In addition, the Hughes complaint asserted a derivative claim on behalf of the Company against the members of the Company’s board of directors for breaching their fiduciary duties of loyalty and care to the Company by negotiating and agreeing to the CME Merger and against Defendants Gooch and Heffron for usurping a corporate opportunity. The Michocki complaint alleged that the CME Merger is not a solitary transaction but a series of related transactions and further alleged that the IDB Transaction must be approved by an affirmative two-thirds vote of the Shares pursuant to the terms of the Charter.

The complaints seek, among other relief: (i) certification of the class, (ii) injunctive relief enjoining the CME Merger, (iii) a declaration that the members of the Company’s board of directors breached their fiduciary duties and that certain provisions of the CME Merger Agreement are unlawful, (iv) a directive to the members of the Company’s board of directors to execute their fiduciary duties to obtain a transaction in the best interest of the Company’s stockholders, (v) rescission of the CME Merger to the extent already implemented, (vi) granting of rescissory damages and an accounting of all of the damages suffered as a result of the alleged wrongdoing, (vii) and reimbursement of fees and costs. The Coyne and Suprina Plaintiffs also demanded a jury trial.

Certain Defendants moved to dismiss or, in the alternative, stay the Coyne and Suprina actions in favor of the Consolidated Delaware Action. A hearing was held on December 15, 2014 on (i) the Defendants’ motions to dismiss or stay the Coyne and Suprina actions; (ii) the Plaintiffs’ motion by order to show cause for consolidation and appointment of a leadership structure; and (iii) Plaintiff Suprina’s motion by order to show cause to compel and expedite discovery. In an order filed on January 30, 2015, the Court ordered the Suprina and Coyne cases consolidated as In re GFI Group Inc. Shareholder Litigation, Index No. 652668/2014. In another order filed that same day, the Court denied Plaintiff Suprina’s motion to compel and expedite discovery.  On March 26, 2015, the Court issued a decision and order granting the Defendants’ motions to dismiss the Coyne and Suprina actions on forum non conveniens grounds and in favor of the Consolidated Delaware Action.  The decision and order were entered in the office of the Clerk of the County of New York on March 27, 2015.  The Court’s judgment dismissing the Coyne and Suprina complaints was entered in the office of the Clerk of the County of New York on April 29, 2015.

On November 18, 2014, the Delaware court entered a Revised Order Setting Expedited Discovery Schedule in the Consolidated Delaware Action. On December 19, 2014, the court entered a Further Revised Scheduling Order scheduling a preliminary injunction hearing for January 16, 2015.  On December 29, 2014, Plaintiffs in the Consolidated Delaware Action filed a Motion for a Preliminary Injunction, and a brief in support thereof, seeking to enjoin enforcement of Article V of the Support Agreement and preliminarily enjoin the stockholder vote on the CME Merger until (i) certain additional disclosures were made and (ii) the Company’s stockholders were provided the opportunity to vote on the CME Merger, the JPI Merger and the IDB Transaction. On January 8, 2015, the parties agreed to move the preliminary injunction hearing from January 16, 2015 to January 20, 2015. On January 15, 2015, the preliminary injunction hearing (scheduled for January 20) was taken off the court’s calendar.

On January 15, 2015, Plaintiffs in the Consolidated Delaware Action filed a Supplement to the Verified Class Action Complaint. On January 30, 2015, Plaintiffs filed a Second Supplement to the Verified Class Action Complaint. On February 4, 2015, Plaintiffs filed a Motion for Expedited Proceedings and a brief in support thereof. On February 6, 2015, the Court scheduled a merits hearing for February 17 and 18, 2015. On February 7, 2015, Plaintiffs filed a Third Supplement to the Verified Class Action Complaint, seeking certain additional injunctive and declaratory relief. On February 11, 2015, the Court,

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with the consent of the parties, moved the merits hearing (scheduled for February 17 and 18, 2015) to the first available dates on the Court’s schedule after March 4, 2015. On February 20, 2015, Plaintiffs informed the Court that an expedited merits hearing was no longer necessary.  On February 26, 2015, March 17, 2015, and March 18, 2015, the Court granted stipulations and orders extending the time for certain Defendants to answer, move, or otherwise respond to the operative complaint.  On April 16, 2015, the Court granted a stipulation and order pursuant to which certain of the Defendants need not respond to the operative complaint or the supplements thereto and will have thirty days from the filing of an amended complaint to answer, move, or otherwise respond to it.  To date, an amended complaint has not been filed.

In the New York Szarek action, the Court scheduled an initial pretrial conference for December 16, 2014, which the Court adjourned upon application of the parties until March 12, 2015 and adjourned again upon application of Plaintiff until May 21, 2015.

In addition to the foregoing litigation, on November 26, 2014, a putative class action complaint alleging violations of the federal securities laws, captioned Gross v. GFI Group, Inc., et al., was filed in the United States District Court for the Southern District of New York. The complaint names the Company, Colin Heffron, Michael Gooch and Nick Brown as Defendants.. The complaint seeks, among other relief: (i) certification of the class, (ii) compensatory damages for Defendants purported wrongdoing and (iii) reimbursement of costs and expenses.

On February 20, 2015, the Court in Gross v. GFI Group, Inc. granted Plaintiff’s unopposed motion for appointment as lead plaintiff and approved his selection of co-lead counsel on behalf of the putative class. The Court also extended Defendants’ time to respond to the complaint from February 23, 2015 to March 25, 2015; granted Plaintiff leave to file an amended complaint by March 16, 2015; and rescheduled the initial pre-trial conference to March 27, 2015.  On March 10, 2015, Plaintiff requested additional time to file his amended complaint.  On March 13, 2015, the Court extended Plaintiff’s deadline to file an amended complaint from March 16, 2015 to May 15, 2015; set a June 5, 2015 deadline for Defendants to respond to the amended complaint; and rescheduled the initial pre-trial conference for June 19, 2015.

Defendants believe that the claims asserted against them are without merit and intend to defend the litigation vigorously.

Based on currently available information, the outcome of the Company’s outstanding legal proceedings are not expected to have a material adverse impact on the Company’s financial position. However, the outcome of any such matters may be material to the Company’s results of operations or cash flows in a given period. It is not presently possible to determine the Company’s ultimate exposure to these matters and there is no assurance that the resolution of the Company’s outstanding matters will not significantly exceed any reserves accrued by the Company.

For a limited number of legal matters for which, a loss (whether in excess of a related accrued liability or where there is no accrued liability) is not probable but is reasonably possible in future periods, the Company is sometimes able to estimate a range of possible loss.  In determining whether it is able to estimate a range of possible loss, the Company reviews and evaluates its material litigation and regulatory and other matters on an ongoing basis.  In cases in which the Company is able to estimate a range of possible loss, the aggregate total of such estimated possible losses is disclosed below.  There may be other matters for which a loss is probable or reasonably possible but for which a range of possible loss may not be estimable.  For those matters for which a range of possible loss is estimable, management currently estimates the aggregate range of possible loss as $0 to approximately $10.0 million in excess of the accrued liability (if any) related to those matters.  The estimated range of possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions and uncertainties.  The matters underlying the estimated range will vary from time to time, and actual results may vary significantly from the current estimate.  Management is generally unable to estimate a range of reasonably possible loss for matters other than those included in the estimate above, including where (i) actual or potential plaintiffs have not claimed an amount of monetary damages (unless management can otherwise determine an amount), (ii) the matters are in early stages, (iii) there is uncertainty as to the outcome of pending appeals or motions, (iv) there are significant factual issues to be resolved, (v) there are novel legal issues presented, among other reasons.  Those matters for which an estimate is not possible are excluded from the estimated range above, therefore, the estimated range above does not represent the Company’s maximum loss exposure.

Risks and Uncertainties— The Company primarily generates its revenues by executing and facilitating transactions for counterparties. Revenues for these services are transaction based. As a result, the Company’s revenues will likely vary based upon the trading volumes of the various securities, commodities, foreign exchange and other cash and derivative markets in which the Company provides its services.

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Guarantees— The Company, through its subsidiaries, is a member of certain exchanges and clearing houses. Under the membership agreements, members are generally required to guarantee certain obligations. To mitigate the performance risks of its members, the exchanges and clearing houses may, from time to time, require members to post collateral, as well as meet certain minimum financial standards. The Company’s maximum potential liability under these arrangements cannot be quantified. However, management believes that the potential for the Company to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Condensed Consolidated Statements of Financial Condition for these arrangements.

13.     MARKET AND CREDIT RISKS

Disclosure regarding the Company’s financial instruments with market and credit risks are described in “Note 16—Market and Credit Risks” of the Notes to the Consolidated Financial Statements contained in the Company’s 2014 Form 10-K.  There have been no material changes to these risks during the three months ended March 31, 2015.

14.     FAIR VALUE OF FINANCIAL INSTRUMENTS

Certain of the Company’s financial assets and liabilities are carried at fair value, and are measured at fair value on a recurring basis. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial instruments owned and Financial instruments sold, not yet purchased are recorded at fair value, and included in Other assets and Other liabilities, respectively. Contingent consideration, if any, is also recorded at fair value, and included in Other liabilities. The Company’s investments that are accounted for under the cost and equity methods are investments in companies that are not publicly traded and for which no established market for their securities exists. The fair value of these investments is only estimated if there are identified events or changes in circumstances that may have a significant adverse effect on the carrying value of the investment.

The Company’s financial assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with ASC 820-10. In accordance with ASC 820-10, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.

Level 1—Financial assets and liabilities whose values are based on unadjusted quoted prices for identifiable assets or liabilities in an active market that the company has the ability to access at the measurement date (examples include active exchange-traded equity securities, listed derivatives, and most U.S. Government and agency securities).

Level 2—Financial assets and liabilities whose values are based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. Level 2 inputs include the following:

·Quoted prices for identifiable or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds which trade infrequently); and

·Inputs other than quoted prices that are observable for substantially the full term of the asset or liability (examples include interest rate and currency swaps).

Level 3—Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

Valuation Techniques

A description of the valuation techniques applied to the Company’s major categories of assets and liabilities measured at fair value on a recurring basis are as follows:

U.S. Treasury Securities - U.S. Treasury securities are valued using quoted market prices. Valuation adjustments are not applied.

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Accordingly, U.S. Treasury securities are generally categorized in Level 1 of the fair value hierarchy.

Equity Securities - Equity securities include mostly exchange-traded securities and are valued based on quoted market prices. Accordingly, exchange-traded equity securities are generally categorized in Level 1 of the fair value hierarchy.  Non-exchange traded equity securities are measured primarily using broker quotations, pricing service data from external providers and prices observed for recently executed market transactions. Non-exchange traded equity securities are generally categorized within Level 2 of the fair value hierarchy.

Corporate Bonds — Corporate bonds are measured primarily using broker quotations, pricing service data from external providers and prices observed for recently executed market transactions. Corporate bonds are generally categorized in Level 2 of the fair value hierarchy.

Foreign government bonds — Foreign government bonds are mostly valued using quoted market prices. Accordingly, foreign government bonds are generally categorized in Level 1 or Level 2 of the fair value hierarchy.

Derivative Contracts — Derivative contracts include instruments such as foreign exchange, commodity, fixed income and equity derivative contracts.

Listed Derivative Contracts - Listed derivatives that are actively traded are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy.

OTC Derivative Contracts — Over-the-counter (“OTC”) derivative contracts include forwards, swaps, and options contracts related to foreign currencies. Depending on the product and the terms of the transaction, the fair value of OTC derivative products can be either observed or modeled using a series of techniques and model inputs from comparable benchmarks, including closed-form analytic formulas, such as the Black-Scholes option-pricing model, and simulation models or a combination thereof.  Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgment, and the pricing inputs are observed from actively quoted markets. In the case of more established derivative products, the pricing models used by the Company are widely accepted by the financial services industry. OTC derivative products valued by the Company using pricing models generally fall into this category and are categorized in Level 2 of the fair value hierarchy.

Equity warrants -  Non-exchange traded equity warrants are classified within Level 3 of the fair value hierarchy and are measured using the Black-Scholes model with key inputs impacting the valuation including the underlying security price, implied volatility, dividend yield, interest rate curve, strike price and maturity date.

Contingent Consideration — The category consists primarily of contingent consideration related to one of the Company’s acquisitions.

On November 14, 2013, the Company completed the acquisition of Contigo Limited, a provider of trading, portfolio risk management and logistics software for the energy industry. This contingent liability, which was settled in cash during March 2015, had been remeasured at fair value principally based on the acquired business’ future financial performance, including revenues and operating margins, from May 1, 2014 through the settlement date.

The inputs used in estimating the fair value of these contingent considerations were both unobservable and significant to the overall fair value measurement of this liability, therefore the liability was categorized in Level 3 of the fair value hierarchy.

In the three months ended March 31, 2015 and 2014, the Company did not have any material transfers among Level 1, Level 2, and Level 3.

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Financial Assets and Liabilities measured at fair value on a recurring basis as of March 31, 2015 are as follows:

	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at March 31, 2015
Assets
Other assets: Financial instruments owned:
Equity securities	$	247		$	94	$	—	$	341
Derivative contracts:
Foreign exchange derivative contracts	$	342		$	3,620	$	—	$	3,962
Commodities derivative contracts	1,650			—		—		1,650
Netting (1)	(651		)	—		—		(651		)
Total derivative contracts	$	1,341		$	3,620	$	—	$	4,961
Total financial instruments owned	$	1,588		$	3,714	$	—	$	5,302
Total	$	1,588		$	3,714	$	—	$	5,302
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:
Derivative contracts:
Foreign exchange derivative contracts	$	57		$	2,166	$	—	$	2,223
Commodities derivative contracts	594			—		—		594
Netting (1)	(651		)	$	—	$	—	$	(651	)
Total derivative contracts	$	—		$	2,166	$	—	$	2,166
Total financial instruments sold, not yet purchased	$	—		$	2,166	$	—	$	2,166
Total	$	—		$	2,166	$	—	$	2,166

(1)Represents the impact of netting on a net-by-counterparty basis.

Excluded from the table above is variation margin on long derivative contracts related to exchange traded futures in the amount of $335 included within Payables to brokers, dealers and clearing organizations.

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Financial Assets and Liabilities measured at fair value on a recurring basis as of December 31, 2014 are as follows:

	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2014
Assets
Other assets: Financial instruments owned:
Equity securities	$	—		$	232	$	—	$	232
Derivative contracts:
Foreign exchange derivative contracts	$	592		$	2,181	$	—	$	2,773
Commodities derivative contracts	1,198			—		—		1,198
Netting (1)	(338		)		—	—			(338	)
Total derivative contracts	$	1,452		$	2,181	$	—	$	3,633
Total financial instruments owned	$	1,452		$	2,413	$	—	$	3,865
Total	$	1,452		$	2,413	$	—	$	3,865
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:
Derivative contracts:
Foreign exchange derivative contracts	$	—		$	1,387	$	—	$	1,387
Commodities derivative contracts	$	338		$	—	$	—	$	338
Netting (1)	(338		)	—		—		(338		)
Total derivative contracts	$	—		1,387		—		1,387
Total financial instruments sold, not yet purchased	$	—		$	1,387	$	—	$	1,387
Other liabilities: Contingent consideration	$	—		$	—	$	348	$	348
Total	$	—		$	1,387	$	348	$	1,735

(1)Represents the impact of netting on a net-by-counterparty basis.

Excluded from the table above is variation margin on long derivative contracts related to exchange traded futures in the amount of $256 included within Payables to brokers, dealers and clearing organizations.

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Changes in Level 3 Financial Assets and Liabilities measured at fair value on a recurring basis for the three months ended March 31, 2015 are as follows:

	Opening Balance		Total realized and unrealized losses included in Net loss (1)		Unrealized gains (losses) included in Other comprehensive loss		Purchases		Issues		Sales		Settlements		Closing Balance at March 31, 2015		Unrealized gains (losses) for Level 3 Assets / Liabilities Outstanding at March 31, 2015
Liabilities
Other liabilities:
Contingent consideration:	$	348	$	115	$	—	$	—	$	—	$	—	$	(463)	$	—	$	—

(1)Realized and unrealized gains (losses) are reported in Other income, net in the Condensed Consolidated Statements of Operations.

Changes in Level 3 Financial Assets and Liabilities measured at fair value on a recurring basis for the three months ended March 31, 2014 are as follows:

	Opening Balance		Total realized and unrealized losses included in Net loss (1)			Unrealized losses included in Other comprehensive income		Purchases		Issuances		Sales		Settlements		Closing Balance at March 31, 2014		Unrealized gains (losses) for Level 3 Assets / Liabilities Outstanding at March 31, 2014
Assets
Other assets:
Financial instruments owned:
Equity derivative contracts	$	14	$	(14	)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Liabilities
Other liabilities:
Contingent consideration	$	4,317	$	28		$	27	$	—	$	—	$	—	$	—	$	4,372	$	28

(1)Realized and unrealized gains (losses) are reported in Other income, net in the Condensed Consolidated Statements of Operations.

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The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurement of Level 3 Assets and Liabilities measured at fair value on a recurring basis, as of December 31, 2014:

	Fair Value as of December 31, 2014		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average) (a)
Liabilities
Contingent consideration	$	348	Present value of expected payments	Discount rate		17	%
				Forecasted financial information		(b)

(a)As December 31, 2014, contingent consideration consisted of one liability.

(b)The Company’s estimate of contingent consideration as of December 31, 2014was principally based on the acquired business’ projected future financial performance, including revenues and operating margins from May 1, 2014 through April 30, 2015.

Valuation Processes—Level 3 Measurements—Depending on the instrument, the Company utilizes a valuation technique, including discounted cash flow methods, option pricing methods and present value methods, as indicated above. Valuations are generally conducted by the Company, with consultation of a third-party valuation expert to develop the valuation model when the asset or liability is initially recorded. Each reporting period, the Company updates unobservable inputs utilizing relevant published information, where applicable. The Company has a formal process to review changes in fair value for satisfactory explanation.

Sensitivity Analysis—Level 3 Measurements

Contingent consideration – The significant unobservable inputs used in the fair value in the Company’s contingent consideration are the discount rate and forecasted financial information.  Significant increases (decreases) in the discount rate would have resulted in a lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information would have resulted in a higher (lower) fair value measurement.

For all significant unobservable inputs used in the fair value measurement of all Level 3 assets and liabilities, a change in one of the inputs would not necessarily result in a directionally similar change in the other.

15. DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses foreign exchange derivative contracts, including forward contracts and foreign currency swaps, to reduce the effects of fluctuations in certain assets and liabilities denominated in foreign currencies. The Company also hedges a portion of its foreign currency exposures on anticipated foreign currency denominated revenues and expenses by entering into forward foreign exchange contracts. As of March 31, 2015 and December 31, 2014, none of these contracts were designated as foreign currency cash flow hedges under ASC 815-10, Derivatives and Hedging (“ASC 815-10”).

The Company provides brokerage services to its customers for exchange-traded and OTC derivative products, which include futures, forwards and options contracts. The Company may enter into principal transactions for exchange-traded and OTC derivative products to facilitate customer trading activities or to engage in principal trading for the Company’s own account.

The Company monitors market risk exposure from its matched principal business and principal trading business by regularly monitoring both (i) its concentration of market risk to financial instruments, countries or counterparties and (ii) trades that have not settled within prescribed settlement periods or volume thresholds. Additionally, market risks are monitored and mitigated by the use of the Company’s proprietary, electronic risk monitoring system, which provides daily credit reports in each of the Company’s geographic regions that analyze credit concentration and facilitates the regular monitoring of transactions against key risk indicators.

For certain derivative contracts, the Company has entered into agreements with counterparties that allow for the netting of positions. The Company reports these derivative contracts on a net-by-counterparty basis when management believes that a legal and enforceable right of offset exists under these agreements.

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Fair values of derivative contracts on a gross and net basis as of March 31, 2015 and December 31, 2014 are as follows:

	March 31, 2015						December 31, 2014
Derivatives not designated as hedginginstruments under ASC 815-10 (1)	Derivative     Assets(2)			Derivative    Liabilities(3)			Derivative    Assets(2)			DerivativeLiabilities(3)
Foreign exchange derivative contracts	$	3,962		$	2,223		$	2,773		$	1,387
Commodity derivative contracts	1,650			594			1,198			338
Total fair value of derivative contracts	$	5,612		$	2,817		$	3,971		$	1,725
Counterparty netting	(651		)	(651		)	(338		)	(338		)
Total fair value	$	4,961		$	2,166		$	3,633		$	1,387

(1)Excluded from the above table is variation margin on open long and short futures contracts which is included in Receivables from brokers, dealers and clearing organizations and Payables to brokers, dealers and clearing organizations,  on the Condensed Consolidated Statements of Financial Condition. See Note 14 for further details about variation margin balances on open long and short futures contracts as of March 31, 2015 and December 31, 2014.  Gross notional amounts on these futures contracts are included in the table below which details outstanding long and short notional amounts of derivative financial instruments.

(2)Reflects options and forwards contracts within Other assets.

(3)Reflects options and forwards contracts within Other liabilities.

As of March 31, 2015 and December 31, 2014, the Company had outstanding forward foreign exchange hedge contracts with a combined notional value of $56,022 and $69,692, respectively. Approximately $16,110 and $20,568 of these forward foreign exchange contracts represent a hedge of Euro and British pound-denominated balance sheet positions at March 31, 2015 and December 31, 2014, respectively. The remaining outstanding forward foreign exchange contracts are hedges of anticipated future cash flows.

In addition to the Company’s outstanding forward foreign exchange hedge contracts, the following table includes the outstanding long and short notional amounts on a gross basis of derivative financial instruments as of March 31, 2015 and December 31, 2014:

	March 31, 2015 (1)				December 31, 2014 (2)
	Long		Short		Long		Short
Foreign exchange derivative contracts	$	14,368	$	124,313	$	3,185	$	415,756
Commodity derivative contracts	582,250		580,670		675,686		692,855
Fixed income derivative contracts	5,101,596		5,564,179		7,124,375		7,911,965
Equity derivative contracts	2,411		2,408		2,758		2,871
Total derivative notional amounts	$	5,700,625	$	6,271,570	$	7,806,004	$	9,023,447

(1)Notional amounts include gross notionals on open long and short futures contracts of $5,699,521 and $6,270,828 respectively, as of March 31, 2015. These gross notional amounts primarily relate to positions held by a consolidated VIE for which the Company’s exposure to economic loss is approximately $5,633 as of March 31, 2015. See Note 16 for further information.

(2)Notional amounts include gross notionals on open long and short futures contracts of $7,804,981 and $9,023,087, respectively, as of December 31, 2014.  These gross notional amounts primarily relate to positions held by a consolidated VIE for which the Company’s exposure to economic loss is approximately $5,298 as of December 31, 2014. See Note 16 for further information.

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The following is a summary of the effect of derivative contracts on the Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014:

	Location of Gain (Loss)	Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments under ASC 815-10	Recognized in Income on Derivatives	For the Three Months Ended March 31, 2015		For the Three Months Ended March 31, 2014
Foreign exchange derivative contracts	(1)	$	4,675	$	295
Commodity derivative contracts	Principal transactions	2,881		1,753
Fixed income derivative contracts	Principal transactions	1,587		3,130
Equity derivative contracts	(2)	164		7

(1)For the three months ended March 31, 2015, approximately $3,601 of gains on foreign exchange derivative contracts were included within Other income, net and approximately $1,074 of gains on foreign currency options were included within Principal transactions.  For the three months ended March 31, 2014, approximately $202 of gains on foreign exchange derivative contracts were included within Other income, net and approximately $93 of gains on foreign currency options were included within Principal transactions.

(2)For the three months ended March 31, 2015, approximately $164 of gains on equity derivative contracts were included within Principal transactions. For the three months ended March 31, 2014, approximately $14 of losses on equity derivative contracts were included within, Other income, net and approximately $21 of gains on equity derivative contracts were included within Principal transactions.

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The following is a summary of derivative contracts, by counterparty, including the gross amounts offset in the Condensed Consolidated Statements of Financial Position as of March 31, 2015:

			Gross Amount Offset in the			Net Amounts of Assets Offset in the		Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition
Counterparties (1)	Gross Amounts of Recognized Assets		Condensed Consolidated Statements of Financial Position			Condensed Consolidated Statements of Financial Position (2)		Derivatives (3)		Cash Collateral Received/ (Pledged)		Net Amount
Derivative Assets:
Counterparty A	$	2,599	$	—		$	2,599	$	—	$	—	$	2,599
Counterparty B	1,756		(414		)	1,342		—		—		1,342
Counterparty C	1,021		—			1,021		—		—		1,021
Counterparty D	237		(237		)	—		—		—		—
Total	$	5,613	$	(651	)	$	4,962	$	—	$	—	$	4,962
Derivative Liabilities:
Counterparty A	$	747	$	—		$	747	$	—	$	—	$	747
Counterparty B	414		(414		)	—		—		—		—
Counterparty C	1,420		—			1,420		—		—		1,420
Counterparty D	237		(237		)	—		—		—		—
Total	$	2,818	$	(651	)	$	2,167	$	—	$	—	$	2,167

(1)Excluded from the above table is variation margin on open long and short futures contracts which is included in Receivables from brokers, dealers and clearing organizations  and Payables to brokers, dealers and clearing organizations,  on the Condensed Consolidated Statements of Financial Condition. See Note 14 for further details about variation margin balances on open long and short futures contracts as of March 31, 2015.

(2)Derivative assets and derivative liabilities are reflected within Other assets and Other Liabilities, respectively.

(3)As of March 31, 2015, the Company does not have any derivative positions under a master netting agreement that are not netted.

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The following is a summary of derivative contracts, by counterparty, including the gross amounts offset in the Consolidated Statements of Financial Position as of December 31, 2014:

			Gross Amounts Offset in the			Net Amounts of Assets Offset in the		Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition
Counterparties (1)	Gross Amounts of Recognized Assets		Condensed Consolidated Statements of Financial Position			Condensed Consolidated Statements of Financial Position (2)		Derivatives (3)		Cash Collateral Received/ (Pledged)		Net Amount
Derivative Assets:
Counterparty A	$	1,630	$	—		$	1,630	$	—	$	—	$	1,630
Counterparty B	1,789		(338		)	1,451		—		—		1,451
Counterparty C	552		—			552		—		—		552
Total	$	3,971	$	(338	)	$	3,633	$	—	$	—	$	3,633
Derivative Liabilities:
Counterparty A	$	394	$	—		$	394	$	—	$	—	$	394
Counterparty B	$	338	$	(338	)	$	—	$	—	$	—	$	—
Counterparty C	993		—			993		—		—		993
Total	$	1,725	$	(338	)	$	1,387	$	—	$	—	$	1,387

(1)Excluded from the above table is variation margin on open long and short futures contracts which is included in Receivables from brokers, dealers and clearing organizations and Payables to brokers, dealers and clearing organizations,  on the Condensed Consolidated Statements of Financial Condition. See Note 14 for further details about variation margin balances on open long and short futures contracts as of December 31, 2014.

(2)Derivative assets and derivative liabilities are reflected within Other assets and Other Liabilities, respectively.

(3)As of December 31, 2014, the Company does not have any derivative positions under a master netting agreement that are not netted.

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16. VARIABLE INTEREST ENTITIES

Non-consolidated VIEs

The Company holds interests in certain VIEs that it does not consolidate. The Company has determined that it is not the primary beneficiary, mostly due to a lack of significant economic interest, voting power and/or power to direct the activities that would most significantly impact the economic performance of the VIE.

As of March 31, 2015 and December 31, 2014, the Company had certain variable interests in non-consolidated VIEs in the form of direct equity interests, a convertible note and a non-recourse loan. The carrying amount of these VIEs was $2,802 as of March 31, 2015 and $3,144 as of December 31, 2014, and was recorded within Other assets. These VIEs include a technology provider with a proprietary financial application, trading entities in which the Company has provided initial capital to fund trading activities, investment fund managers and a commodity pool operator. The Company also provides clearing and other administrative services to certain of these non-consolidated VIEs. The maximum exposure to loss on these VIEs was $2,850 as of March 31, 2015 and $3,144 as of December 31, 2014, respectively.

The Company previously had certain variable interests in non-consolidated VIEs in the form of trading margin accounts in which the Company had an economic interest in profits and losses and has provided initial capital to fund trading activities. All such interests had been terminated as of March 31, 2015.

The Company has not recorded any liabilities with respect to non-consolidated VIEs.

Consolidated VIEs

In December 2010, Kyte invested in a limited company that is focused on developing a proprietary trading business. The limited company is a VIE and it was determined that the Company is the primary beneficiary of this VIE because the Company, through Kyte, was the provider of the majority of this VIE’s start-up capital and has the power to direct the activities of this VIE that most significantly impact its economic performance, primarily through its voting percentage and consent rights on the activities that would most significantly influence the entity. The consolidated VIE had total assets of $10,804 at March 31, 2015 and $9,956 as of December 31, 2014, which primarily consisted of clearing margin. There were no material restrictions on the consolidated VIE’s assets. The consolidated VIE had total liabilities of $2,955 at March 31, 2015 and $2,761 at December 31, 2014. The Company’s exposure to economic loss on this VIE is approximately $5,633 and $5,298 as of March 31, 2015 and December 31, 2014, respectively.

17.    REGULATORY REQUIREMENTS

Many of the Company’s material operating subsidiaries are subject to regulatory restrictions and minimum capital requirements, which may restrict the Company’s ability to withdraw capital from its subsidiaries.

Certain domestic subsidiaries of the Company are registered as a broker-dealer, swap execution facility (“SEF”) or introducing broker and therefore are subject to the applicable rules and regulations of the SEC and the Commodity Futures Trading Commission (“CFTC”). Certain foreign subsidiaries are also registered as introducing brokers with the CFTC. These rules contain uniform minimum net capital requirements, as defined, and also require a significant part of the registrants’ assets be kept in relatively liquid form. As of March 31, 2015, each of the Company’s subsidiaries that are subject to these regulations had net capital in excess of their minimum capital requirements.

Certain of the Company’s European subsidiaries are regulated by the Financial Conduct Authority (“FCA”) and must maintain financial resources (as defined by the FCA) in excess of FCA’s total financial resources requirement. As of March 31, 2015, each of these European subsidiaries had financial resources in excess of their requirements.

Certain other subsidiaries of the Company are subject to similar regulatory and other requirements in the jurisdictions in which they operate and, as of March 31, 2015, each of these subsidiaries was in compliance with its regulatory capital requirements.

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The regulatory requirements referred to above may restrict the Company’s ability to withdraw capital from its regulated subsidiaries. As of March 31, 2015, the Company had the following aggregate regulatory capital, in individually regulated entities, in each of its operating regions:

	Americas		EMEA		Asia
Regulatory capital	$	24,422	$	122,996	$	31,824
Minimum regulatory capital required	7,150		98,895		8,608
Excess regulatory capital	$	17,272	$	24,101	$	23,216

The regulatory requirements set forth in the table above include aggregated amounts held in individually regulated entities in each of the Company’s operating regions, calculated by entity, to comply with the requirements of various regulators for capital requirements in each of those entities. In situations where the Company is subject to the requirements of multiple regulators, the Company has included the more onerous capital requirement in the table above.

18.    SEGMENT AND GEOGRAPHIC INFORMATION

In accordance with ASC 280-10, Segment Reporting (“ASC 280-10”) and based on the nature of the Company’s operations, products and services in each geographic region, the Company determined that it has four reportable segments: (i) Americas Brokerage, (ii)  EMEA Brokerage, (iii) Asia Brokerage and (iv) Clearing and Backed Trading. The Company’s brokerage operations provide brokerage services in four broad product categories: fixed income, financial, equity and commodity. The Clearing and Backed Trading segment encompasses the Company’s clearing, risk management, settlement and other back-office services, as well as the capital we provide to start-up trading groups, small hedge funds, market-makers and individual traders. Information about other business activities is disclosed in an “All Other” category. All Other includes the results of the Company’s software, analytics and market data operations. All Other also includes revenues and expenses that are not directly assignable to one of the Company’s reportable segments, primarily consisting of indirect costs related to the Company’s brokerage segments as well as all of the Company’s corporate business activities.

The accounting policies of the segments are the same as those described above in Note 3—Summary of Significant Accounting Policies. The Company evaluates performance of the operating segments based on income (loss) before income taxes, which it defines as revenues less direct expenses.

Revenues within each brokerage segment include revenues that are directly related to providing brokerage services along with interest and other income (loss) directly attributable to the operating segment. Revenues within the Clearing and Backed Trading segment primarily include revenues that are directly related to providing clearing services along with the Company’s share of profit (loss) on trading activity from capital investments. The Company’s Clearing and Backed Trading segment incurs exchange fees on behalf of its clients, which are reflected within Interest and transaction-based expenses. The reimbursement of these fees from the Company’s clients is reflected within Total Revenues. Therefore, the Company evaluates the top-line performance of its Clearing and Backed Trading segment using Revenues, net of interest and transaction-based expenses.

Direct expenses of the operating segments are those expenses that are directly related to providing the brokerage or clearing services and trading activities of the operating segments and include compensation expense related to the segment management and staff, communication and market data, travel and promotion, and certain professional fees and other expenses that are directly incurred by the operating segments. However, the Company does not allocate to its brokerage operating segments certain expenses that it manages separately at the corporate level. The unallocated costs include rent and occupancy, depreciation and amortization, professional fees, interest on borrowings and other expenses and are included in the All Other operating segment. Management generally does not consider the unallocated costs in its performance measurement of its reportable segments.

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Selected financial information for the Company’s reportable segments is presented below for periods indicated:

	Three Months Ended March 31, 2015
	Americas Brokerage		EMEA Brokerage		Asia Brokerage		Clearing and Backed Trading		All Other			Total
Total revenues	$	57,552	$	84,500	$	20,757	$	28,253	$	40,460		$	231,522
Revenues, net of interest and transaction-based expenses	54,926		81,654		20,663		7,217		41,156			205,616
Income (loss) before income taxes	16,480		27,622		7,659		1,301		(84,601		)	(31,539		)

	Three Months Ended March 31, 2014
	Americas Brokerage		EMEA Brokerage		Asia Brokerage		Clearing and Backed Trading		All Other			Total
Total revenues	$	61,698	$	89,300	$	19,223	$	44,293	$	26,225		$	240,739
Revenues, net of interest and transaction-based expenses	58,752		86,427		19,103		11,140		27,005			202,427
Income (loss) before income taxes	14,342		28,704		5,632		931		(44,106		)	5,503

In addition, with the exception for goodwill, the Company does not identify or allocate assets by operating segment, nor does its chief operating decision maker evaluate operating segments using discrete asset information. See Note 6 for goodwill by reportable segment.

For the three months ended March 31, 2015 and 2014, the U.K. is the only individual foreign country that accounts for 10% or more of the Company’s total revenues and total long-lived assets. Information regarding revenue for the three ended March 31, 2015 and 2014, and information regarding long-lived assets (defined as property, equipment, leasehold improvements and software inventory) in geographic areas as of March 31, 2015 and December 31, 2014, are as follows:

	Three Months Ended March 31,
	2015		2014
Revenues:
United States	$	68,766	$	63,213
United Kingdom	107,351		124,305
Other	55,405		53,221
Total	$	231,522	$	240,739
	Three Months Ended March 31,
	2015		2014
Revenues, net of interest and transaction-based expenses:
United States	$	67,937	$	62,096
United Kingdom	83,942		89,819
Other	53,737		50,512
Total	$	205,616	$	202,427

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	March 31,2015		December 31, 2014
Long-lived Assets, as defined:
United States	$	47,262	$	48,506
United Kingdom	6,935		6,976
Other	2,960		3,850
Total (1)	$	57,157	$	59,332

(1)Excluded from the March 31, 2015 balance is $157 of Property, equipment, leasehold improvements, net related to KBL. Excluded from the December 31, 2014 balance is $2,122 of Property, equipment, leasehold improvements, net related to KGL and KBL.  As discussed in Note 4, such amounts are included in Assets held for sale.

Revenues are attributed to geographic areas based on the location of the particular subsidiary of the Company which generated the revenues.

19.    RELATED PARTIES

As of March 31, 2015, entities affiliated with BGC were the beneficial owners of approximately 56 % of the Company’s common stock.  Therefore, GFI is a controlled company of BGC and operates as a division of BGC.  See Note 2 for further information on BGC’s acquisition of the Company.

As of March 31, 2015, the Company had $60,256 of receivables from BGC, which primarily consisted of $60,000 of receivables for loans which were issued by the Company on March 27, 2015, comprised of a $40,000 loan, bearing interest at 3.75% per annum and due June 30, 2015 and a $20,000 loan, bearing interest at 3.75% per annum and payable on demand.  In addition, certain of the Company’s subsidiaries transact with BGC and its affiliated entities. The Company had approximately $12,898 included in payables to brokers, dealers and clearing organizations related to matched principal transactions in which BGC and its affiliates were the counterparty. For the three months ended March 31, 2015 and 2014, the Company earned both software and brokerage revenues related to transactions with BGC and its affiliated entities. The revenues earned from BGC and its affiliated entities did not have a material impact on any of the periods presented in the Company’s Condensed Consolidated Financial Statements.

20.    SUBSEQUENT EVENTS

Delisting and Deregistration of GFI common stock

The Company’s common stock was delisted on the NYSE on April 10, 2015 and the Company expects to file a Form 15 with the SEC to effect the deregistration of the common stock. The Company expects the deregistration of the common stock to become effective 90 days after filing the Form 15 with the SEC.

Related party transactions

In April 2015, the Company provided a loan to BGC in the amount of $9,250, which bears interest of 3.75% per annum and is payable on demand.

Under rules adopted by the U.S. CFTC, all foreign introducing brokers engaging in transactions with U.S. persons are required to register with the National Futures Association and either meet financial reporting and net capital requirements on an individual basis or obtain a guarantee agreement from a registered Futures Commission Merchant. The Company’s European-based brokers engage from time to time in interest rate swap transactions with U.S.-based counterparties, and therefore the Company is subject to these CFTC requirements. In April 2015, Cantor Fitzgerald & Co. (“CF&Co”), an affiliate of BGC, the Company’s controlling stockholder, has entered into guarantees on the Company’s and the Company is required to indemnify CF&Co for the amounts, if any, paid by CF&Co pursuant to this arrangement.

On April 28 2015, the Company issued 43,029,260 shares (the “New Shares”) of its common stock to BGC at that dates closing price of $5.81 per share, for an aggregate purchase price of $250,000.  The purchase price was paid to the Company in the form of a Note due on June 19, 2018 which bears an interest rate of LIBOR plus 200 basis points. The Company expects that any funds received in payment of the principal of the note would be earmarked for repayment of the Company’s 8.375% Senior Notes or potentially be the basis of collateral with respect to the 8.375% Senior Notes. Following the issuance of the New Shares, BGC owns approximately 67% of the Company’s outstanding common stock.

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Other subsequent events

The Company and BGC announced that they have retained CF&Co to assist in the potential sale of our Trayport subsidiary.

In April 2015, GFI entered into a fourth amendment to the Credit Agreement, whereby the minimum consolidated capital the Company is required to maintain was adjusted to $215,000.  See Note 8 for further information.

In April 2015, the Company’s Board of Directors authorized the Company to repurchase up to $50,000 of the Company’s common stock and 8.375% Senior Notes.

On April 29, 2015, S&P raised its credit rating on the Company’s 8.375% Senior Notes four notches to BB+, following the announcement that BGC gained the two-thirds ownership necessary to effect the full merger of GFI. See Note 20 under “Related party transactions” for further information on GFI’s issuance of shares to BGC. S&P indicated its rating on the Company’s 8.375% Senior Notes remained on CreditWatch with positive implications. On May 6, 2015, Fitch increased its credit rating on the Company’s 8.375% Senior Notes four notches to BB+ and has also removed the Company’s 8.375% Senior Notes rating  the from Rating Watch Positive and assigned a Positive Rating Outlook, following the purchase of additional GFI shares by BGC. The recent upgrades from S&P and Fitch will lower the Company’s interest rate by 100 basis points. Any upgrade from Moody’s could also lower the Company’s rate on the Senior Notes up to a maximum of 50 basis points.

Subsequent events have been evaluated for recording and disclosure in the notes to the Consolidated Financial Statements through the filing date of this Form 10-Q.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “will be,” “will likely continue,” “will likely result,” or words or phrases of similar meaning. These forward-looking statements are based largely on the expectations of management and are subject to a number of risks and uncertainties including, but not limited to, the following:

·the risks and other factors described under the heading “Risk Factors” and elsewhere in this Form 10-Q and in our 2014 Form 10-K;

·economic, political and market factors affecting trading volumes, securities prices, or demand for our brokerage services, including recent conditions in the world economy and financial markets in which we provide our services;

·the extensive regulation of the Company’s business, changes in laws and regulations governing our business and operations or permissible activities and our ability to comply with such laws and regulations;

·our ability to obtain and maintain regulatory approval to conduct our business in light of certain proposed and recently adopted changes in laws and regulations in the U.S. and Europe and increased operational costs related to compliance with such changes in laws and regulations, including the laws and regulations governing the operation of swap execution facilities (“SEF”);

·the risks associated with the transition of cleared swaps to future contracts and our ability to continue to provide value-added brokerage and execution services to our customers pursuant to rules and regulations applicable to futures markets;

·our ability to attract and retain key personnel, including highly qualified brokerage personnel;

·our ability to keep up with rapid technological change and to continue to develop and support software, analytics and market data products, including hybrid brokerage and matching systems, that are desired and utilized by our customers;

·our entrance into new brokerage markets, including investments in establishing new brokerage desks;

·competition from current and new competitors;

·risks associated with our matched principal and principal trading businesses, including risks arising from specific brokerage transactions, or series of brokerage transactions, such as credit risk, market risk or the risk of fraud or unauthorized trading;

·financial difficulties experienced by our customers or key participants in the markets in which we focus our brokerage services;

·our ability to assess and integrate acquisitions of businesses or technologies;

·the maturing of key markets and any resulting contraction in commissions;

·risks associated with the expansion and growth of our operations generally or of specific products or services, including, in particular, our ability to manage our international operations;

·uncertainties associated with currency fluctuations;

·our failure to protect or enforce our intellectual property rights;

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·uncertainties relating to litigation;

·liquidity and clearing capital requirements and the impact of the conditions in the world economy and the financial markets in which we provide our services on the availability and terms of additional or future capital;

·our ability to identify and remediate any material weakness in our internal controls that could affect our ability to prepare financial statements and reports in a timely manner;

·the effectiveness of our risk management policies and procedures and the impact of unexpected market moves and similar events; future results of operations and financial condition; and

·the success of our business strategies.

The foregoing risks and uncertainties, as well as those risks discussed under the headings “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Item 3—Quantitative and Qualitative Disclosures About Market Risk” and “Part II, Item 1A Risk Factors” and elsewhere in this Form 10-Q, may cause actual results to differ materially from the forward-looking statements. The information included herein is given as of the filing date of this Form 10-Q with the Securities Exchange Commission (the “SEC”) and future events or circumstances could differ significantly from these forward-looking statements. The Company does not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Acquisition by BGC Partners, Inc. and Termination of the CME Merger

        On February 26, 2015, BGC Partners Inc. (together with its affiliates, “BGC”) successfully completed its tender offer to acquire shares of our common stock for $6.10 per share in cash. On March 4, 2015, BGC Partners, L.P. paid for the 54.3 million shares of common stock of the Company tendered pursuant to the tender offer. The tendered shares, together with the 17.1 million shares already owned by BGC, represent approximately 56% of the outstanding shares of our common stock.  As a result of the transaction, we are a controlled company of BGC and will operate as a division of BGC, reporting to Shaun Lynn, BGC’s President. Going forward, BGC and GFI are expected to remain separately branded divisions.

On February 19, 2015, we entered into a Tender Offer Agreement with BGC and BGC Partners, L.P. (the “Tender Offer Agreement”). Pursuant to the Tender Offer Agreement, our board of directors unanimously agreed to support the tender offer and to expand our board and to appoint BGC’s designees. The Tender Offer Agreement also contained an offer extension and a reduction to the minimum tender condition of the tender offer. On February 26, 2015, our board of directors was increased from five to eight members and, following the appointment of three of the individuals designated by BGC, Marisa Cassoni, Frank Fanzilli, Jr. and Richard Magee resigned as members of the board of directors and any and all committees thereof. BGC designated six directors to the expanded eight-member board of directors, including Howard Lutnick, BGC’s Chairman and Chief Executive Officer, Shaun Lynn, BGC’s President, Stephen Merkel, BGC’s Executive Vice President, General Counsel and Secretary, William J. Moran, a former Executive Vice President of JPMorgan Chase & Co. and a current director of BGC, Peter J. Powers, President and Chief Executive Officer of Powers Global Strategies LLC and a current director of BGC, and Michael Snow, Managing Member and Chief Investment Officer of Snow Fund One, LLC. Messrs. Moran, Powers and Snow are independent directors. The other conditions of the Tender Offer Agreement were met.

        Our Executive Chairman, Michael Gooch, and Chief Executive Officer, Colin Heffron, have remained as executives and directors of GFI and have continued as Chairman and Chief Executive Officer, respectively, of the GFI division. Mr. Gooch also holds the title of Vice Chairman of BGC Partners, L.P. Mr. Heffron has entered into an amended and restated employment agreement which continues to provide him with certain annual cash and equity compensation and severance arrangements. Mr. Gooch has entered into a fixed term employment agreement which provides him with certain cash and equity compensation. Pursuant to the Tender Offer Agreement, BGC has agreed to promptly establish a Distributable Earnings Bonus Pool program (the “Pool”) in an amount equal to one times the average annual distributable earnings, as defined, of our inter-dealer brokerage business for the three successive 12-month periods beginning on July 1, 2015. The Pool will be in the form of an award of restricted equity units and preferred restricted equity units of BGC Holdings, L.P and will be allocated 35% to Mr. Gooch, 35% to Mr. Heffron and 30% to other GFI employees as mutually agreed by Messrs. Gooch and Heffron and BGC. As a condition to participation in the Pool, each participant (including Messrs. Gooch and Heffron) is required to enter into a non-competition and award agreement containing the terms and conditions of his or her participation, which terms include the participant’s continued employment through July 1, 2018 and certain conditions, obligations and covenants (including non-competition, non-solicitation, non-hire non-disclosure provisions).

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        Prior to the entry into the Tender Offer Agreement, we were a party to a series of agreements, including an Agreement and Plan of Merger (the “CME Merger Agreement”) and a Purchase Agreement (the “IDB Purchase Agreement”), each dated as of July 30, 2014, as amended, with CME Group Inc. (“CME”) and certain of its affiliates, whereby we had agreed to merge with and into a wholly owned subsidiary of CME (the “CME Merger”) and, immediately following such merger, a private consortium of current GFI management would acquire our wholesale brokerage and clearing businesses from CME (such transactions collectively, the “CME Transaction”). In addition, CME, Jersey Partners, Inc. (“JPI”) and certain other stockholders of GFI, who collectively control approximately 38% of the outstanding shares of our common stock, entered into an agreement, dated as of July 30, 2014 (the “Support Agreement”), that provided for such stockholders to vote for the CME Transaction and vote against any alternative transaction and that prevented such stockholders from transferring their shares, including by tendering into the tender offer. The CME Merger Agreement and the CME Transaction were terminated on January 30, 2015. The restrictions in the Support Agreement continue until on or about January 30, 2016.

        Under the Tender Offer Agreement, JPI has the right to require, within the period of 21 days following the earlier of (x) the expiration or termination of the Support Agreement or (y) February 19, 2016, that BGC complete back-end mergers in which each remaining share of our common stock would be converted into $6.10, with holders of shares (other than JPI) receiving cash, and holders of JPI common stock receiving a mix of cash and shares of BGC’s Class A common stock (“BGC Stock”) valued at the closing price of BGC Stock on the date prior to the date of the Tender Offer Agreement in respect of each share indirectly owned by such holder through JPI. The amount of consideration to be received by Messrs. Gooch and Heffron, as holders of JPI common stock, in the back-end mergers is subject to reduction in certain circumstances, and our obligation to pay consideration to such holders in the back-end mergers is also subject to certain conditions, each as described in the Tender Offer Agreement.

        Pursuant to the Tender Offer Agreement, we will execute certain ancillary agreements, including amendments to BGC’s existing administrative services agreements. Our employees holding restricted stock units will receive $6.10 per unit in cash based on their pre-existing vesting schedules. We and BGC have also agreed that we will establish a retention bonus pool for our employees, which may be payable in the forms of forgivable loans and equity or partnership awards of us or our affiliates.

Delisting and Deregistration of GFI common stock

On March 30, 2015, we filed a Form 25 with the SEC to voluntarily delist our common stock and notes on the New York Stock Exchange and to terminate the registration of the common stock under the Exchange Act. The common stock was delisted on April 10, 2015 and we expect to file a Form 15 with the SEC to effect the deregistration of the common stock.  Upon the filing of the Form 15, the Company’s obligations to file certain reports with the SEC, including reports on Forms 10-K, 10-Q and 8-K, will immediately be suspended. However, the Company intends to make voluntary SEC filings with respect to its 8.375% Senior Notes due July 2018 in compliance with its obligations under the related indenture. The Company expects the deregistration of the common stock to become effective ninety (90) days after filing the Form 15 with the SEC.

Disposition of interests in Kyte

       During the first quarter of 2015, the Company entered into a number of share purchase agreements to divest certain interests in Kyte (the “Kyte SPAs”). In March 2015, we completed a transaction to sell The Kyte Group Limited (“KGL”), which primarily included our clearing business. Following the closing of that transaction, the Company no longer offers clearing and settlement services. The Company expects the transaction to sell Kyte Broking Limited (“KBL”) in the next few months.

 Business Environment

As a leading provider of wholesale brokerage services, clearing services and electronic execution and trading support products for global financial markets, our results of operations are impacted by a number of external market factors, including market volatility, transactional volumes and the organic growth or contraction of the derivative and cash markets in which we provide our brokerage services, the particular mix of transactional activity in our various products, the competitive and regulatory environment in the various jurisdictions and markets in which we operate and the commercial activity levels of the dealers, hedge funds, traders and other market participants to whom we provide our services. Outlined below are management’s observations of these external market factors during the most recent fiscal period.

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The factors outlined below are not the only factors that impacted our results of operations for the most recent fiscal period, and additional or other factors may impact, or have different degrees of impact, on our results of operations in future periods.

Market Volumes and Volatility

Recent Activity in Underlying Markets. We believe that overall market volatility was generally higher in the first quarter of 2015 than that of the same period in 2014, particularly in currencies and interest rate markets, which contributed to increased activity in those product categories.  Many dealer banks reported increases in their fixed income, currencies and commodities revenues for the first quarter of 2015, as compared to the same prior year quarter.

The level of organic growth or contraction in the over-the-counter (“OTC”) derivatives markets we serve, as well as our market share within any particular market, has historically been difficult to measure on a timely basis, as there are only a few independent, objective measures of the outstanding notional amount of OTC derivatives, all of which are published retrospectively and do not measure transactional volumes. Therefore, to help gauge growth or contraction in any particular quarter or year, management has looked to the published results of large OTC derivatives dealers and certain futures and derivative exchanges as potential indicators of transactional activity in the related OTC derivative markets. In future periods, as SEFs and swap data repositories report their daily trading volumes on a more consistent basis pursuant to applicable Commodity Futures Trading Commission (“CFTC”) regulations, management expects such data to provide a better indication of overall market size and our relative market share within such derivative markets.

OTC market volumes were generally mixed across most asset classes during the first quarter of 2015, as compared to the same period in 2014. OTC markets continued to confront higher capital requirements and a low global short-term interest rate environment. However, the level of the Chicago Board Options Exchange Volatility Index (“VIX”), on average, was approximately 12% higher during the first quarter of 2015 compared with the same period in the prior year. The Bank of America Merrill Lynch (“BAML”) Global Financial Stress Index was also higher during the first quarter of 2015 when compared to the same prior year period. We believe that these indexes provide valuable proxies for the overall volatility across our four brokerage product categories. However, it should be noted that volatility events can affect each of our product categories to varying degrees.

Fixed Income Volumes. Our fixed income product category is comprised of revenues related to the brokerage of cash and derivative fixed income products. Fixed income volumes typically correlate with fluctuations in interest rates, market volatility and the level of bond issuances. Interest rates remained low during the first quarter of 2015, however, market volatility in this product category generally increased compared to the same period in 2014. Corporate bond issuances increased for the three months ended March 31, 2015 as compared to the same prior year period, with the Securities Industry and Financial Markets Association (“SIFMA”) reporting a 15% increase in corporate bond issuances, year over year.  In addition, SIFMA reported a 15% increase in average daily volumes (“ADV”) for U.S. corporate debt, but also reported that the average gross notional outstanding for credit default swaps declined, year over year.  Similarly, IntercontinentalExchange Inc. (“ICE”) reported an approximately 18% decline in credit default swap trade execution revenues compared with the same period in 2014. Furthermore, BrokerTec, an electronic trading platform in the fixed income market, reported decreased ADV of 7%, year over year.  In comparison, our fixed income volumes decreased on the majority of our desks in the first quarter of 2015 from the same period in 2014, largely as a result of decreased volumes for many fixed income derivative products. Overall, our margins in this product category generally declined.  Our brokerage revenues from fixed income products declined 19% in the three months ended March 31, 2015, as compared to the same period in the prior year.

Interest Rate and Foreign Exchange Volumes. Our financial product category primarily consists of revenues related to the brokerage of foreign exchange and interest rate derivative products. Foreign exchange volumes generally increased in the first quarter of 2015, compared with the same quarter in 2014, predominately driven by increased volatility during the period.  Global foreign exchange volatility, as measured by the Deutsche Bank FX Volatility Index, or CVIX, increased approximately 41% from the year-ago quarter. CME’s foreign exchange derivatives ADVs increased 17% in the first quarter of 2015, while EBS, an electronic trading platform for spot currencies, reported a 31% increase in volumes, year over year.  In addition, reported volumes for interest rate products generally increased in the three months ended March 31, 2015, as compared to the same period in 2014, with CME reporting a 12% increase in interest rate derivatives ADVs for the first quarter of 2015. Similarly, our volumes generally increased in the financial products category in the first quarter of 2015 from the same prior year period, while changes in our margins were relatively evenly mixed amongst desks in this product category.  Overall, our brokerage revenues from financial products increased 7% in the three months ended March 31, 2015, as compared to the same period in the prior year.

Equity Volumes. Our equity product category consists of revenues related to the brokerage of cash equity and equity derivative products.

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Cash equity and equity derivative volume indicators in Europe and the U.S. were generally mixed in the first quarter of 2015 compared with the same prior year period.  International Securities Exchange’s equity derivative volumes declined 22% in the first quarter of 2015 as compared to the same period in 2014, while Options Clearing Corporation reported a 9% decrease in cleared equity option contract volumes, year over year.  However, Eurex European equity derivative volumes increased 10% over that same period.  In addition, ADVs for NYSE’s U.S. cash products increased 10% during the first quarter of 2015, while ADVs for Euronext’s European cash products (the vast majority of which are cash equity products) increased 20%, year over year.  In comparison, our volumes and margins declined on a majority of our equity desks in the first quarter of 2015 as compared to the same prior year period. Our brokerage revenues from all equity products declined 13% in the first quarter of 2015, as compared to the same period in the prior year.

Commodity Volumes. Our commodity product category consists of a wide range of energy products, and to a lesser extent, other commodity products. Energy derivatives volumes generally increased in the first quarter of 2015 as compared to the same period in 2014. CME’s Energy derivatives ADVs increased 26% in the three months ended March 31, 2015 compared with the same prior year period, while ICE’s Energy derivatives ADVs increased 13%, year over year. In addition, ICE reported an increase of approximately 5% in the quarterly rate per contract (“RPC”), while CME’s reported RPC declined approximately 8%. In comparison, the fluctuations in volumes and margins amongst our various energy product desks varied when comparing the first quarter of 2015 with the same prior year period. Our brokerage revenues from commodity products increased 5% in the first quarter of 2015, as compared to the same period in the prior year.

Competitive and Regulatory Environment

        Another major external market factor affecting our business and results of operations is competition, which may take the form of competitive pressure on the commissions we charge for our services or competition for qualified personnel with extensive experience in the specialized markets we serve. We currently compete for the services of skilled brokerage personnel with other wholesale market participants and, more broadly, we compete for the services of highly qualified technology development personnel. We believe that the demand for productive brokers has lessened in recent periods, as the wholesale brokerage industry has been impacted by lower trading volumes and sluggish trading conditions in certain markets we serve and due to the increased importance of technology. However, we believe that there continues to be increased competition to provide brokerage services to a smaller number of market participants in the near term as dealers have exited or reduced their proprietary trading operations.

        In addition, we believe that the continued regulatory uncertainty in certain markets has resulted in lower trading volumes and fewer participants in these markets. GFI Swaps Exchange LLC, our SEF platform, was temporarily registered as a SEF by the CFTC in September 2013 and many of the rules governing the operation of a SEF for swaps in the U.S. became effective on October 2, 2013. The requirements for SEF trading are still developing and regulations are still being interpreted and analyzed, including their cross-border application. This continues to create uncertainty and depressed volumes, as market participants work to understand how to structure their global business and trading. Additionally, the SEC has not yet finalized its rules for security-based SEFs, nor has it published a timetable for the finalization and implementation of such rules. However, in the long run, we remain optimistic that the regulatory reform of recent years, including requirements for enhanced regulatory transparency, central clearing and efficient execution, will benefit and enable growth in the global derivatives markets.

Technology Development

        Over the past few years, we have continued the expansion of our proprietary electronic trade execution capabilities for our SEF and non-SEF businesses, as well as the number of users of our hybrid electronic trading platforms. We continue to believe that our capabilities have provided us with a market leading position to address customer needs and service our markets in light of new regulatory requirements.

        The provision of electronic trade execution requires increasingly complex systems and infrastructures and new regulations may require new business models. Our continued success will depend on our ability to enhance and improve our existing platforms and services, develop and/or license new products and technologies that address the increasingly sophisticated needs of the markets and respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis.

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Financial Overview

Our results of operations are significantly impacted by the amount of our revenues and the amount of compensation and benefits we provide to our employees. The following factors had a significant impact on our revenues and employee costs during the three-month period ended March 31, 2015:

Our total revenues decreased 3.8% to $231.5 million for the three months ended March 31, 2015 from $240.7 million for the three months ended March 31, 2014. The main factors contributing to this decrease in our revenues were:

·Decreased clearing services revenues primarily due to the disposal of our Kyte clearing business during March 2015;

·The adverse impact the strengthening of the U.S. Dollar against the Euro and British Pound had on several of our revenue streams;

·Lower trading volumes in certain fixed income derivatives markets in which we provide our services; and

·The reduction in broker personnel headcount.

Partially offsetting the above factors were the following positive factors that affected our brokerage and other revenues, including:

·Higher volatility levels in foreign exchange markets, which contributed to increased brokerage revenues in our financial products category;

·An increase in Other revenues as a result of a legal settlement gain during the first quarter of 2015; and

·Increased brokerage revenues from certain European commodity markets in which we provide our services.

The most significant component of our cost structure is employee compensation and benefits, which includes salaries, amortization of sign-on and retention bonuses, incentive compensation and related employee benefits and taxes.  Our compensation and employee benefits expense increased 6.9% to $147.2 million for the three months ended March 31, 2015 from $137.7 million for the three months ended March 31, 2014.  The increase was predominantly due to (i) $11.5 million of incremental compensation costs related to the modification of outstanding RSUs (as discussed in Note 11 of the Condensed Consolidated Financial Statements) and (ii) a $9.2 million increase in severance costs mostly as a result of the BGC acquisition.

Our compensation and employee benefits for all employees have both a fixed and a variable component. Base salaries and benefit costs are primarily fixed for all employees, while performance bonuses constitute the variable portion of our compensation and employee benefits. Within overall compensation and employee benefits, the employment cost of our brokerage personnel is the key component. Bonuses for brokerage personnel are primarily based on individual performance and/or the operating results of their related brokerage desk. For many of our brokerage employees, bonuses constitute a significant component of their overall compensation. Broker performance bonuses increased to $46.7 million for the three months ended March 31, 2015 from $45.8 million for the three months ended March 31, 2014.

Further, we may pay sign-on bonuses to certain newly-hired brokers and retention bonuses to certain of our existing brokers who agree to long-term employment agreements. These bonuses may be paid in the form of cash, deferred cash, long term equity or forgivable loans, or a combination of the foregoing, and are typically expensed over the term of the related employment agreement for cash bonuses and forgivable loans and the related service period for deferred cash and long term equity, which is generally two to four years. These employment agreements typically contain provisions requiring the repayment of all or a portion of the cash payment or forgivable loan and forfeiture provisions for unvested deferred cash or equity should the employee voluntarily terminate his or her employment or if the employee’s employment is terminated for cause during the initial term of the agreement. Sign-on and retention bonuses, when granted, also increase the fixed component of our compensation and employee benefits expense for the remainder of the term over which such bonus is earned by the employee. Compensation expense resulting from the amortization of broker sign-on and retention bonuses was $6.2 million for the three months ended March 31, 2015, as compared to $8.3 million for the three months ended March 31, 2014.

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Results of Consolidated Operations

The following table sets forth our condensed consolidated results of operations for the periods indicated:

	Three Months Ended March 31,
	2015			2014
	(dollars in thousands)
Revenues
Agency commissions	$	117,991		$		121,415
Principal transactions	47,010			51,689
Total brokerage revenues	165,001			173,104
Clearing services revenues	21,338			34,164
Interest income from clearing services	297			528
Equity in net earnings of unconsolidated businesses	1,564			2,554
Software, analytics and market data	25,756			25,765
Other income, net	17,566			4,624
Total revenues	231,522			240,739
Interest and transaction-based expenses
Transaction fees on clearing services	20,495			32,640
Transaction fees on brokerage services	5,283			5,503
Interest expense from clearing services	128			169
Total interest and transaction-based expenses	25,906			38,312
Revenues, net of interest and transaction-based expenses	205,616			202,427
Expenses
Compensation and employee benefits	147,217			137,697
Communications and market data	12,042			13,347
Travel and promotion	6,383			7,779
Rent and occupancy	6,927			8,086
Depreciation and amortization	7,321			8,596
Professional fees	18,436			6,171
Interest on borrowings	7,868			7,784
Merger termination fees	24,728			—
Other expenses	6,233			7,464
Total other expenses	237,155			196,924
(Loss) income before (benefit from) provision for income taxes	(31,539		)	5,503
(Benefit from) provision for income taxes	(12,392		)	1,094
Net (loss) income before attribution to non-controlling stockholders	(19,147		)	4,409
Less: Net income attributable to non-controlling interests	776			406
GFI’s net (loss) income	$	(19,923	)	$	4,003

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The following table sets forth our condensed consolidated results of operations as a percentage of our revenues, net of interest and transaction-based expenses, for the periods indicated:

	Three Months Ended March 31,
	2015		2014
Revenues
Agency commissions	57.4	%	60.0	%
Principal transactions	22.9		25.5
Total brokerage revenues	80.3		85.5
Clearing services revenues	10.4		16.9
Interest income from clearing services	0.1		0.2
Equity in net earnings of unconsolidated businesses	0.8		1.3
Software, analytics and market data	12.5		12.7
Other income, net	8.5		2.3
Total revenues	112.6		118.9
Interest and transaction-based expenses
Transaction fees on clearing services	9.9		16.1
Transaction fees on brokerage services	2.6		2.7
Interest expense from clearing services	0.1		0.1
Total interest and transaction-based expenses	12.6		18.9
Revenues, net of interest and transaction-based expenses	100.0	%	100.0	%
Expenses
Compensation and employee benefits	71.6		68.0
Communications and market data	5.8		6.6
Travel and promotion	3.1		3.8
Rent and occupancy	3.4		4.0
Depreciation and amortization	3.6		4.3
Professional fees	9.0		3.1
Interest on borrowings	3.8		3.8
Merger termination fees	12.0		0.0
Other expenses	3.0		3.7
Total other expenses	115.3	%	97.3	%
(Loss) income before (benefit from) provision for income taxes	(15.3	)	2.7
(Benefit from) provision for income taxes	(6.0	)	0.5
Net (loss) income before attribution to non-controlling stockholders	(9.3	)	2.2
Less: Net income attributable to non-controlling interests	0.4		0.2
GFI’s net (loss) income	(9.7	)%	2.0	%

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Three Months Ended March 31, 2015 Compared to the Three Months Ended March 31, 2014

Net Loss

GFI’s net loss was $19.9 million for the three months ended March 31, 2015 compared to net income of $4.0 million for the same period in 2014. We generated total revenues of $231.5 million for the first quarter of 2015 compared with $240.7 million for the same period in the prior year. The net decrease in total revenues reflected lower clearing services revenues and lower brokerage revenues, partially offset by an increase in other revenues, primarily due to the factors set forth above under heading “Financial Overview.”

Total interest and transaction-based expenses decreased by $12.4 million for the three months ended March 31, 2015 from the same quarter in 2014. The decrease was primarily due to a decline in transaction fees on clearing services largely as a result of the disposal of the Kyte clearing business during March 2015.

Total expenses, excluding interest and transaction-based expenses, were $237.2 million for the three months ended March 31, 2015 compared with $196.9 million in the same prior year period.  The increase was primarily attributable to the CME Merger termination fee, an increase in compensation and employee benefits expense and merger and acquisition related professional fees.

We recorded a benefit from income taxes of $12.4 million for the three months ended March 31, 2015 as compared to a provision of $1.1 million for the three months ended March 31, 2014. The change was primarily due to the factors set forth below under the section “Income Taxes.”

Revenues

The following table sets forth the changes in revenues for the three months ended March 31, 2015 as compared to the same period in 2014 (dollars in thousands, except percentage data):

		For the Three Months Ended March 31,
		2015	%*			2014	%*			Increase (Decrease)		%**
Revenues
Brokerage revenues:
Fixed income	$	41,850	20.4	%	$	51,735	25.6	%	$	(9,885	)	(19.1	)%
Equity		26,211	12.7			30,043	14.8			(3,832	)	(12.8	)
Financial		55,035	26.8			51,539	25.5			3,496		6.8
Commodity		41,905	20.4			39,787	19.6			2,118		5.3
Total brokerage revenues		165,001	80.2			173,104	85.5			(8,103	)	(4.7	)
Clearing services revenues		21,338	10.4			34,164	16.9			(12,826	)	(37.5	)
Other revenues		45,183	22.0			33,471	16.5			11,712		35.0
Total revenues		231,522	112.6			240,739	118.9			(9,217	)	(3.8	)
Total interest and transaction-based expenses		25,906	12.6			38,312	18.9			(12,406	)	(32.4	)
Revenues, net of interest and transaction-based expenses	$	205,616	100.0	%	$	202,427	100.0	%	$	3,189		1.6	%

*Denotes % of revenues, net of interest and transaction-based expenses

**Denotes % change of dollar amount of revenue for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014

Brokerage Revenues—We offer our brokerage services in four broad product categories: fixed income, equity, financial, and commodity. Below is a discussion of our brokerage revenues by product category for the three months ended March 31, 2015 as compared to the same period in 2014.

·Broker productivity (defined as total brokerage revenues during the period divided by average monthly brokerage personnel headcount for the period) across all product categories for the three months ended March 31, 2015 increased approximately 2%, as compared to the same prior year period.

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·Fixed income product brokerage revenues decreased $9.9 million, or 19.1%, for the three months ended March 31, 2015 compared to the same period in 2014.  Revenues from fixed income derivative and cash products decreased approximately 24.1% and 16.1%, respectively, year over year.  Our fixed income revenues decreased due, in part, to lower fixed income derivative trading volumes amid the continued low global interest rate environment, as well as reduced brokerage personnel headcount in this product category. Our average monthly brokerage personnel headcount for fixed income products decreased by 26 to 262 employees for the three months ended March 31, 2015.

·Equity product brokerage revenues decreased $3.8 million, or 12.8%, for the three months ended March 31, 2015 compared with the same prior year period.  The decrease in revenues was largely attributable to reduced trading volumes for certain equity derivative products and reduced brokerage personnel headcount in this product category.  Our average monthly brokerage personnel headcount for equity products decreased by 22 to 148 employees for the three months ended March 31, 2015.

·The increase in financial product brokerage revenues of $3.5 million, or 6.8%, for the three months ended March 31, 2015 compared with the same prior year period, was largely due to higher currency market volatility during 2015.  Our average monthly brokerage personnel headcount for financial products decreased by 23 to 340 employees for the three months ended March 31, 2015.

·Commodity product brokerage revenues increased $2.1 million, or 5.3%, for the three months ended March 31, 2015 compared to the same prior year quarter.  The increase was primarily attributable to an increase in our commodities brokerage revenues in Europe, including an increase in revenues derived from certain energy derivative products.  Our average monthly brokerage personnel headcount for commodity products increased by 1 to 264 employees for the three months ended March 31, 2015.

Clearing Services Revenue

·Clearing services revenues decreased by $12.8 million, or 37.5%, in the first quarter of 2015 compared to the same prior year period, primarily due to the disposal of the Kyte clearing business during March 2015.

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Other Revenues

·Other revenues were comprised of the following (dollars in thousands):

	For the Three Months Ended March 31,
	2015			2014			Increase (Decrease)			%*
Software, analytics and market data	$	25,756		$	25,765		$	(9	)	(0.0	)%
Equity in net earnings of unconsolidated businesses		1,564			2,554			(990	)	(38.8	)
Remeasurement of foreign currency transactions and balances		(1,038	)		(92	)		(946	)	1,028.3
Net realized and unrealized gains from foreign currency hedges		3,601			202			3,399		1,682.7
Interest income on short-term investments		78			124			(46	)	(37.1	)
Interest income from clearing services		297			528			(231	)	(43.8	)
Other		14,925			4,390			10,535		240.0
Total other revenues	$	45,183		$	33,471		$	11,712		35.0	%

*Denotes % change of dollar amount of revenue for the three months ended March 31, 2015 as compared to the three months ended March 31, 2015

Other revenues increased by $11.7 million for the three months ended March 31, 2015 as compared to the same quarter in 2014. The increase was primarily due to an increase in Other, as a result of a legal settlement gain during the first quarter of 2015. The increase in Other revenues was also due, in part, to an increase in net realized and unrealized gains largely associated with foreign currency forward contracts used to hedge revenues and certain foreign currency assets, and was primarily driven by the strengthening of the U.S. Dollar against the British Pound.  In addition, the organic growth of our Trayport subsidiary, whose software revenues are included in Software, analytics and market data, was more than offset by the adverse impact the strengthening of the U.S. Dollar against the British Pound had on its reported revenues.

Interest and Transaction-Based Expenses

·The decrease in total interest and transaction-based expenses of $12.4 million in the three months ended March 31, 2015 as compared to the same period in 2014 was primarily due to the disposal of the Kyte clearing business during March 2015.

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Expenses

The following table sets forth the changes in expenses for the three months ended March 31, 2015 as compared to the same period in 2014 (dollars in thousands, except percentage data):

	For the Three Months Ended March 31,
	2015		%*		2014		%*			Increase (Decrease)		%**
Expenses
Compensation and employee benefits	$	147,217	71.6	%	$	137,697	68.0	%	$	9,520		6.9	%
Communications and market data		12,042	5.8			13,347	6.6			(1,305	)	(9.8	)
Travel and promotion		6,383	3.1			7,779	3.8			(1,396	)	(17.9	)
Rent and occupancy		6,927	3.4			8,086	4.0			(1,159	)	(14.3	)
Depreciation and amortization		7,321	3.6			8,596	4.3			(1,275	)	(14.8	)
Professional fees		18,436	9.0			6,171	3.1			12,265		198.8
Interest on borrowings		7,868	3.8			7,784	3.8			84		1.1
Merger termination fees		24,728	12.0			—	0.0			24,728		100.0
Other expenses		6,233	3.0			7,464	3.7			(1,231	)	(16.5	)
Total other expenses	$	237,155	115.3	%	$	196,924	97.3	%	$	40,231		20.4	%

*Denotes % of revenues, net of interest and transaction-based expenses

**Denotes % change of dollar amount of expense for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014

Compensation and Employee Benefits

·Compensation and employee benefits expense increased $9.5 million for the three months ended March 31, 2015 as compared with the same prior year period. The increase was predominantly due to (i) $11.5 million of incremental compensation costs related to the modification of outstanding RSUs (as discussed in Note 11 of the Condensed Consolidated Financial Statements) and (ii) a $9.2 million increase in severance costs mostly as a result of the BGC acquisition. Partially offsetting these increases was (i) lower broker performance bonus expense resulting from lower brokerage revenues, (ii) lower broker salary expense on reduced brokerage personnel headcount and (iii) a decrease in amortization expense on previously paid sign-on and retention bonuses.

·Total compensation and employee benefits as a percentage of revenues, net of interest and transaction-based expenses, increased to 71.6% for the three months ended March 31, 2015 compared to 68.0% for the same period in 2014, though the increase was largely due to non-recurring charges, including incremental compensation costs related to the modification of outstanding RSUs and severance costs related to the BGC acquisition.

·Performance bonus expense represented 42.2% and 39.1% of total compensation and employee benefits expense for the three months ended March 31, 2015 and 2014, respectively.  This increase was primarily driven by the incremental compensation costs associated with the modification of our RSUs. Additionally, sign-on and retention bonus expense, which includes the amortization of cash sign-on and retention bonuses initially paid in prior periods, represented 4.3% and 6.3% of total compensation and employee benefits expense for the three months ended March 31, 2015 and 2014, respectively.

All Other Expenses

·As discussed in Note 2 to the Condensed Consolidated Financial Statements, pursuant to the terms of the CME Merger Agreement, we were required to pay CME a termination fee of $24.7 million (including reimbursement to CME of $7.1 million of its merger related expenses) during the three months ended March 31, 2015.

·The increase in professional fees of $12.3 million was primarily attributable to merger and acquisition related services provided to the Company during the first quarter of 2015.

·The decrease in travel and promotion expense of $1.4 million was due, in large part, to the effect of cost savings initiatives.

52

·The decrease in communications and market data expense of $1.3 million was primarily attributable to lower expenditures on price quotation systems, due, in part, to lower broker headcount.

·The decrease in depreciation and amortization expense of $1.3 million in the first quarter of 2015 was largely due lower intangible amortization expense as a result of the disposal of the Kyte clearing business.

·The decrease in rent and occupancy expense of $1.2 million was due to a combination of individually small items, including a decrease in rental obligations due to the disposal of the Kyte clearing business.

Income Taxes

·We recorded a benefit from income taxes of $12.4 million for the three months ended March 31, 2015, as compared to a provision for income taxes of $1.1 million for the three months ended March 31, 2014.  The change from a provision for income taxes to a benefit from income taxes was primarily due to an allowable U.S. income tax deduction as a result of the merger termination fee paid to CME following the termination of the CME Merger Agreement in January 2015. The effective tax rates for both periods were impacted by a geographical mix of pre-tax profits and losses.

53

Results of Segment Operations

Based on the nature of our operations, products and services in each geographic region, we determined that we have four reportable segments: (i) Americas Brokerage, (ii) Europe, Middle East and Africa (“EMEA”) Brokerage, (iii) Asia Brokerage and (iv) Clearing and Backed Trading. Our brokerage operations provide brokerage services in four broad product categories: fixed income, financial, equity and commodity. Our Clearing and Backed Trading segment encompasses our clearing, risk management, settlement and other back-office services, as well as the capital we provide to start-up trading groups, small hedge funds, market-makers and individual traders. All Other includes the results of our software, analytics and market data operations. All Other also includes revenues and expenses that are not directly assignable to one of our reportable segments, primarily consisting of indirect costs related to our brokerage segments as well as all our corporate business activities.

Segment Results for the Three Months Ended March 31, 2015 Compared to the Three Months Ended March 31, 2014

The following tables summarize our Total revenues, Revenues, net of interest and transaction-based expenses, Other expenses and Income (loss) before income taxes by segment (dollars in thousands):

	Three Months Ended March 31, 2015
	Americas Brokerage		EMEA Brokerage		Asia Brokerage			Clearing and Backed Trading		All Other				Total
Total revenues	$	57,552	$	84,500	$	20,757		$	28,253	$	40,460			$	231,522
Revenues, net of interest and transaction-based expenses	54,926		81,654		20,663			7,217		41,156				205,616
Other expenses	38,446		54,032		13,004			5,916		125,757				237,155
Income (loss) before income taxes	16,480		27,622		7,659			1,301		(84,601			)	(31,539		)
	Three Months Ended March 31, 2014
	Americas Brokerage		EMEA Brokerage		Asia Brokerage			Clearing and Backed Trading		All Other				Total
Total revenues	$	61,698	$	89,300	$		19,223	$	44,293	$		26,225		$	240,739
Revenues, net of interest and transaction-based expenses	58,752		86,427		19,103			11,140		27,005				202,427
Other expenses	44,410		57,723		13,471			10,209		71,111				196,924
Income (loss) before income taxes	14,342		28,704		5,632			931		(44,106			)	5,503

Total Revenues

·Total revenues for Americas Brokerage and EMEA Brokerage decreased $4.1 million, or 6.7%, and $4.8 million, or 5.4%, respectively, for the first quarter of 2015. Total revenues for Asia Brokerage increased $1.5 million, or 8.0%, for the three months ended March 31, 2015. Total revenues for our three brokerage segments in total decreased by $7.4 million, or 4.4%, to $162.8 million for the three months ended March 31, 2015. The decrease in total revenues for our brokerage segments was primarily due to the factors described above under “Three Months Ended March 31, 2015 Compared to the Three Months Ended March 31, 2014”.

·Total revenues for Clearing and Backed Trading decreased $16.0 million, or 36.2%, for the three months ended March 31, 2015. The decrease was primarily due to the disposal of the Kyte clearing business in March 2015.

·Total revenues for All Other increased by $14.2 million, or 54.3%, for the three months ended March 31, 2015. This increase was primarily due to (i) a legal settlement gain during the first quarter of 2015 and (ii) net realized and unrealized gains largely associated with foreign currency forward contracts used to hedge revenues and certain foreign currency assets.

Total interest and transaction-based expenses

·Total interest and transaction-based fees for our three brokerage segments decreased to $5.6 million for the three months ended March 31, 2015, as compared to $5.9 million for the same period in 2014.

54

·Total interest and transaction-based fees for Clearing and Backed Trading decreased by $12.2 million to $21.0 million for the three months ended March 31, 2015 from $33.2 million for the prior year first quarter, primarily due to the disposal of the Kyte clearing business in March 2015.

Other Expenses

·Other expenses for Americas, EMEA and Asia Brokerages decreased $6.0 million, or 13.4%, $3.7 million, or 6.4%, and $0.5 million, or 3.5%, respectively, for the first quarter of 2015. The decrease for the Americas and EMEA brokerage segments was largely due to a decrease in compensation and employee benefits expense resulting from (i) lower cash performance bonus expense on lower brokerage revenues and (ii) lower broker salary expense on reduced brokerage headcount.  The decrease for the Asia brokerage segment was primarily due to a decrease in compensation and employee benefits expense resulting from lower broker salary expense on reduced brokerage headcount. Total Other expenses for our three brokerage segments decreased by $10.1 million, or 8.8%, to $105.5 million for the three months ended March 31, 2015.

·For our brokerage segments, we record certain direct expenses, including compensation and employee benefits; however, we do not allocate certain expenses that are managed separately at the corporate level to these operating segments. The unallocated costs including rent and occupancy, depreciation and amortization, professional fees, interest and other expenses are included in the expenses for All Other described below. Management does not believe that allocating these costs to our brokerage segments is optimal for evaluating the performance of its brokerage segments.

·Other expenses for Clearing and Backed Trading decreased $4.3 million, or 42.1% for the three months ended March 31, 2015. The decrease was primarily due to the disposal of the Kyte clearing business during March 2015.

·Other expenses for All Other increased by $54.6 million, or 76.8% for the three months ended March 31, 2015. The increase was primarily attributable to (i) the $24.7 million merger termination fee which we were required to pay to CME upon the termination of the merger in January 2015, (ii) $11.5 million of incremental compensation costs related to the modification of outstanding RSUs during the first quarter of 2015 and (iii) an increase in merger and acquisition related professional fees.

55

Quarterly Results of Operations

The following table sets forth, by quarter, our unaudited statement of operations data for the period from April 1, 2013 to March 31, 2015. Results of any period are not necessarily indicative of results for a full year and may, in certain periods, be affected by seasonal fluctuations in our business.

	Quarter Ended
	March 31, 2015			December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014		December 31, 2013			September 30, 2013			June 30,2013
	(dollars in thousands)
Revenues
Agency commissions	$	117,991		$	111,194		$	112,303		$	109,692		$	121,415	$	103,278		$	109,365		$	122,476
Principal transactions	47,010			41,240			41,453			45,948			51,689		40,246			41,841			51,562
Total brokerage revenues	165,001			152,434			153,756			155,640			173,104		143,524			151,206			174,038
Clearing services revenues	21,338			26,359			26,373			28,602			34,164		28,911			32,722			39,439
Interest income from clearing services	297			550			579			572			528		570			455			431
Equity in net earnings of unconsolidated businesses	1,564			2,925			639			1,493			2,554		1,241			1,566			2,300
Software, analytics and market data	25,756			25,543			26,095			25,595			25,765		24,100			22,472			21,808
Other income, net	17,566			4,079			2,859			6,203			4,624		4,001			4,012			4,262
Total revenues	231,522			211,890			210,301			218,105			240,739		202,347			212,433			242,278
Interest and transaction-based expenses
Transaction fees on clearing services	20,495			24,102			24,786			26,936			32,640		27,213			31,620			38,424
Transaction fees on brokerage services	5,283			4,832			4,330			4,655			5,503		4,183			4,430			5,335
Interest expense from clearing services	128			261			206			185			169		180			143			87
Total interest and transaction-based expenses	25,906			29,186			29,322			31,776			38,312		31,576			36,193			43,846
Revenues, net of interest and transaction-based expenses	205,616			182,704			180,979			186,329			202,427		170,771			176,240			198,432
Expenses
Compensation and employee benefits	147,217			121,112			122,720			130,003			137,697		123,485			121,109			134,613
Communications and market data	12,042			12,620			13,335			13,520			13,347		12,798			13,747			13,743
Travel and promotion	6,383			8,341			7,184			7,961			7,779		7,555			7,380			7,857
Rent and occupancy	6,927			7,488			7,835			7,890			8,086		6,228			7,901			7,039
Depreciation and amortization	7,321			8,461			8,480			8,797			8,596		8,333			8,320			8,334
Professional fees	18,436			11,976			13,650			10,107			6,171		5,703			5,712			6,385
Interest on borrowings	7,868			7,905			8,466			8,143			7,784		7,822			7,612			7,175
Merger termination fees	24,728			—			—			—			—		—			—			—
Impairment of goodwill and long-lived assets	—			4,061			—			121,619			—		19,602			—			—
Other expenses	6,233			6,595			6,825			7,237			7,464		7,116			5,615			5,699
Total other expenses	237,155			188,559			188,495			315,277			196,924		198,642			177,396			190,845
(Loss) income before (benefit from) provision for income taxes	(31,539		)	(5,855		)	(7,516		)	(128,948		)	5,503		(27,871		)	(1,156		)	7,587
(Benefit from) provision for income taxes	(12,392		)	276			(56		)	(31,277		)	1,094		2,994			(1,127		)	719
Net (loss) income before attribution to non-controlling stockholders	(19,147		)	(6,131		)	(7,460		)	(97,671		)	4,409		(30,865		)	(29		)	6,868
Less: Net income attributable to non-controlling interests	776			428			231			125			406		37			432			177
GFI’s net (loss) income	$	(19,923	)	$	(6,559	)	$	(7,691	)	$	(97,796	)	$	4,003	$	(30,902	)	$	(461	)	$	6,691

56

The following table sets forth our quarterly results of operations as a percentage of our Revenues, net of interest and transaction-based expenses, for the indicated periods:

	Quarter Ended
	March 31, 2015		December 31, 2014		September 30,2014		June 30,2014		March 31,2014		December 31, 2013		September 30, 2013		June 30, 2013
Revenues
Agency commissions	57.4	%	60.9	%	62.1	%	58.9	%	60.0	%	60.5	%	62.1	%	61.7	%
Principal transactions	22.9		22.6		22.9		24.7		25.5		23.6		23.7		26.0
Total brokerage revenues	80.3		83.5		85.0		83.6		85.5		84.1		85.8		87.7
Clearing services revenues	10.4		14.4		14.6		15.4		16.9		16.9		18.5		19.9
Interest income from clearing services	0.1		0.3		0.3		0.3		0.2		0.3		0.3		0.2
Equity in net earnings of unconsolidated businesses	0.8		1.6		0.3		0.8		1.3		0.7		0.9		1.2
Software, analytics and market data	12.5		14.0		14.4		13.7		12.7		14.1		12.7		11.0
Other income, net	8.5		2.2		1.6		3.3		2.3		2.4		2.3		2.1
Total revenues	112.6		116.0		116.2		117.1		118.9		118.5		120.5		122.1
Interest and transaction-based expenses
Transaction fees on clearing services	9.9		13.2		13.7		14.5		16.1		15.9		17.9		19.4
Transaction fees on brokerage services	2.6		2.6		2.4		2.5		2.7		2.5		2.5		2.7
Interest expense from clearing services	0.1		0.2		0.1		0.1		0.1		0.1		0.1		0.0
Total interest and transaction-based expenses	12.6		16.0		16.2		17.1		18.9		18.5		20.5		22.1
Revenues, net of interest and transaction based expenses	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Expenses
Compensation and employee benefits	71.6		66.3		67.8		69.8		68.0		72.3		68.7		67.8
Communications and market data	5.8		6.9		7.3		7.2		6.6		7.5		7.8		6.9
Travel and promotion	3.1		4.6		4.0		4.3		3.8		4.4		4.2		4.0
Rent and occupancy	3.4		4.1		4.3		4.2		4.0		3.6		4.5		3.5
Depreciation and amortization	3.6		4.6		4.7		4.7		4.3		4.9		4.7		4.2
Professional fees	9.0		6.6		7.5		5.4		3.1		3.3		3.3		3.2
Interest on borrowings	3.8		4.3		4.7		4.4		3.8		4.6		4.3		3.6
Merger termination fees	12.0		0.0		0.0		0.0		0.0		0.0		0.0		0.0
Impairment of goodwill and long-lived assets	0.0		2.2		0.0		65.3		0.0		11.5		0.0		0.0
Other expenses	3.0		3.6		3.8		3.9		3.7		4.2		3.2		2.9
Total other expenses	115.3	%	103.2	%	104.1	%	169.2	%	97.3	%	116.3	%	100.7	%	96.1	%
(Loss) income before (benefit from) provision for income taxes	(15.3	)	(3.2	)	(4.1	)	(69.2	)	2.7		(16.3	)	(0.7	)	3.9
(Benefit from) provision for income taxes	(6.0	)	0.2		0.0		(16.8	)	0.5		1.8		(0.6	)	0.4
Net (loss) income before attribution to non-controlling stockholders	(9.3	)	(3.4	)	(4.1	)	(52.4	)	2.2		(18.1	)	(0.1	)	3.5
Less: Net income attributable to non-controlling interests	0.4		0.2		0.1		0.1		0.2		0.0		0.2		0.1
GFI’s net (loss) income	(9.7	)%	(3.6	)%	(4.2	)%	(52.5	)%	2.0	%	(18.1	)%	(0.3	)%	3.4	%

57

Liquidity and Capital Resources

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less. At March 31, 2015, we had $131.9 million of cash and cash equivalents compared to $183.4 million at December 31, 2014. Included in this amount are $70.0 million and $110.8 million of cash and cash equivalents held by subsidiaries outside of the United States at March 31, 2015 and December 31, 2014, respectively. Excluded from the preceding balances as of March 31, 2015 and December 31, 2014  is $12.2 million and $38.1 million, respectively, of cash and cash equivalents classified within Assets held for sale on the Condensed Consolidated Statements of Financial Condition (See Note 4 to the Condensed Consolidated Financial Statements for further information). We have historically asserted the intent to indefinitely reinvest, with very limited exceptions, the unremitted profits of our foreign subsidiaries.  We continue to assert that our historic profits earned in foreign subsidiaries are indefinitely reinvested, however, management has concluded that profits earned in certain overseas subsidiaries commencing from January 1, 2013 will ultimately be repatriated to the United States. For profits earned during the three months ended March 31, 2015 that are not permanently reinvested, the deferred tax liability for those earnings is zero due to the excess foreign tax credits that will be generated as a result of repatriation.

Included within Receivables from brokers, dealers and clearing organizations are cash, including deposits, held at clearing organizations and exchanges to facilitate settlement and clearance of matched principal transactions, and spreads on matched principal transactions that have not yet been remitted from clearing organizations and exchanges. We estimate that cash held at clearing organizations, net of amounts owed to our clearing customers and net of clearing customer cash included within Cash and cash equivalents, was $59.6 million and $44.4 million as of March 31, 2015 and December 31, 2014, respectively.

The following table summarizes our cash position as of March 31, 2015 and December 31, 2014, respectively.

	March 31,		December 31,
	2015		2014
	(dollars in thousands)
Cash and cash equivalents	$	131,870	$	183,432
Cash held at clearing organizations, net of customer cash (1)	59,595		44,358
Cash included in Assets held for sale	14,279		40,065
Total balance sheet cash	$	205,744	$	267,855

(1)As the transaction to sell KGL was completed in March 2015 there was no balance due to our clearing customers or any clearing customer cash as of March 31, 2015.

We believe that, based on current levels of operations, our cash from operations, together with our current cash holdings and available borrowings under our credit agreement with Bank of America N.A. and certain other lenders (the “Credit Agreement”), will be sufficient to fund our operations for at least the next twelve months. Poor financial results, unanticipated expenses or unanticipated acquisitions or strategic investments could give rise to additional financing requirements sooner than we expect. There can be no assurance that equity or debt financing will be available when needed or, if available, that the financing will be on terms satisfactory to us and not dilutive to our then-current stockholders.

Sources and Uses of Cash

Net cash used in operating activities was $65.5 million for the three months ended March 31, 2015 compared with $21.0 million for the three months ended March 31, 2014, a net increase in cash used of $44.5 million. This increase was primarily due to (i) a change of $23.6 million in net (loss) income before attribution to non-controlling stockholders and (ii) a $11.4 million decrease in non-cash items that reconcile net (loss) income to net cash used in operating activities for the three months ended March 31, 2015, compared with the same prior year period.  The decrease in non-cash items was largely related to an increase in benefit from deferred taxes and gains on foreign exchange derivative contracts, net, partially offset by an increase in deferred compensation, which was primarily a result of the incremental compensation costs associated with the modification of RSUs. In addition, the increase was also due to a $9.6 million increase in working capital employed in the business in the three months ended March 31, 2015. Such working capital changes include (i) receivables from/payables to brokers, dealers, and clearing organizations, (ii) payables to clearing service customers, (iii) accrued compensation, (iv) accounts receivable, and (v) other assets and liabilities.

58

Net cash used in investing activities for the three months ended March 31, 2015 was $58.0 million compared with $7.1 million of net cash provided by investing activities for the three months ended March 31, 2014, a net increase in cash used of $65.1 million. This increase in net cash used in investing activities was primarily due to (i) $60.0 million of loans provided to BGC during the first quarter of 2015 and (ii) a decrease in proceeds from the disposition of interests in unconsolidated businesses and available-for-sale securities, year over year.

Net cash provided by financing activities for the three months ended March 31, 2015 was $49.3 million compared to $11.7 million of cash used during the three months ended March 31, 2014, an increase in cash provided of $61.0 million. This increase in net cash used was primarily due an increase in net proceeds in short-term borrowings, and to a lesser extent, a decrease in cash dividends paid to shareholders during the first quarter of 2015.

Regulatory Requirements

Our liquidity and available cash resources are, in part, restricted by the regulatory capital requirements of certain of our material operating subsidiaries, including GFI Securities LLC, Amerex Brokers LLC, GFI Swaps Exchange LLC, GFI Securities Limited, GFI Brokers Limited, Kyte Broking Limited, GFI (HK) Securities LLC, GFI (HK) Brokers Ltd, GFI Group PTE Ltd and GFI Korea Money Brokerage Limited. These operating subsidiaries are subject to minimum capital requirements and/or licensing and financial requirements imposed by their respective market regulators. In addition, these subsidiaries may be prohibited from repaying the borrowings of their parents or affiliates, paying cash dividends, making loans to their parent or affiliates or otherwise entering into transactions, in each case, that result in a significant reduction in their regulatory capital position without prior notification or approval from their principal regulator. See Note 17 to the Condensed Consolidated Financial Statements for further details on our regulatory requirements.

Short and Long Term Debt

Our outstanding debt at March 31, 2015 consisted of $240.0 million of our 8.375% Senior Notes and $60.0 million of borrowings under our Credit Agreement. The unused borrowing capacity under our Credit Agreement at March 31, 2015 and December 31, 2014 was $15.0 million and $65.0 million, respectively. The 8.375% Senior Notes mature in July 2018 and the Credit Agreement matures in December 2015. See Note 8 to the Condensed Consolidated Financial Statements for further details on our debt.

The Credit Agreement contains certain financial and other covenants. The financial covenants contained in our Credit Agreement require that we maintain minimum consolidated capital, as defined, of no less than $375.0 million at any time.  The amendment to the Credit Agreement executed in July 2014 reduced the required minimum amount of consolidated capital by any goodwill or asset impairment charge in an aggregate amount not to exceed $160.0 million contained in our financial statements in any of the fiscal quarters ending June 30, 2014, September 30, 2014 or December 31, 2014.  In April 2015, GFI entered into a fourth amendment to the Credit Agreement, whereby the minimum consolidated capital the Company is required to maintain was adjusted to $215.0 million.

Failure to comply with this financial covenant would result in an event of default under our Credit Agreement unless waived by our lenders. An event of default under our Credit Agreement can result in the acceleration of our indebtedness under the facilities, which in turn would result in an event of default and possible acceleration of indebtedness under the agreements governing our debt securities as well. As of March 31, 2015, we were in full compliance with the financial covenant described above.

In February 2015, in connection with the transactions contemplated by the tender offer agreement, the Company entered into a third amendment to the Credit Agreement to permit the transactions contemplated by the tender offer agreement, including by amending the definition of “Change of Control” to permit BGC to acquire shares of the equity of the Company in excess of 35% without triggering a “Change of Control” under the Credit Agreement.

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Credit Ratings

As of March 31, 2015, we maintained the following public long-term credit ratings:

	Rating
Moody’s Investor Services	B1
Standard & Poor’s	B
Fitch Ratings Inc.	B

Credit ratings and outlooks can be revised at any time if such rating agency decides the circumstances warrant a revision.  In addition, a reduction in our rating may affect the availability of future debt financing and the terms that are available to us.

On January 18, 2013, Moody’s Investor Services (“Moody’s”) lowered its credit rating on our 8.375% Senior Notes two notches to B1, which increased our applicable per annum interest, effective January 19, 2013, by an additional 50 basis points. On April 19, 2013, Fitch lowered its credit rating on our 8.375% Senior Notes two notches to BB and revised its outlook from Stable to Negative. This credit rating downgrade by Fitch increased our applicable per annum interest, effective July 19, 2013, by an additional 50 basis points. On June 26, 2013, Standard & Poor’s (“S&P”) further lowered its credit rating on our 8.375% Senior Notes one notch to B+ and revised its outlook from Negative to Stable. This credit rating downgrade by S&P increased our applicable per annum interest by an additional 25 basis points, effective July 19, 2013.

Pursuant to the terms of the 8.375% Senior Notes, the cumulative effect of downgrades to our credit rating by the various rating agencies during 2012 and 2013 increased the per annum interest rate on the 8.375% Senior Notes by 200 basis points over the original interest rate, which is the maximum increase permitted under the indenture.  The increased interest rate equates to $4.8 million in additional interest expense per annum, based on the aggregate amount of outstanding principal as of December 31, 2014.

On June 19, 2014, S&P further lowered its credit rating on our 8.375% Senior Notes one notch to B.  On June 24, 2014, Fitch further lowered its credit rating on our 8.375% Senior Notes one notch to BB-. The June 2014 downgrades did not have an impact on the per annum interest rate on our 8.375% Senior Notes, as the maximum interest rate increase permitted under the indenture has already been reached.

On July 30, 2014, Moody’s placed our 8.375% Senior Notes rating on review for upgrade following the announcement of the CME Merger. On October 23, 2014, Moody’s continued its review for upgrade following the announcement of BGC’s unsolicited conditional tender offer to purchase all outstanding shares of our common stock. On July 30, 2014, S&P placed our 8.375% Senior Notes rating on CreditWatch with positive implications following the announcement of the CME Merger. On October 29, 2014, S&P indicated its rating on our 8.375% Senior Notes remained on CreditWatch with positive implications following BGC’s unsolicited conditional tender offer to purchase all outstanding shares of our common stock.  On July 31, 2014, Fitch placed our 8.375% Senior Notes rating on Rating Watch Positive following the announcement of the CME Merger.  On September 11, 2014, Fitch indicated its rating on our 8.375% Senior Notes remains on Rating Watch Positive.

On February 3, 2015, Fitch further lowered its credit rating on our 8.375% Senior Notes two notches to B and placed the 8.375% Senior Notes rating on Rating Watch Evolving, following the termination of the CME Merger. On February 4, 2015, Moody’s placed our 8.375% Senior Notes rating on review for downgrade following the termination of the CME Merger. On February 5, 2015, S&P placed our 8.375% Senior Notes rating on CreditWatch Developing following the termination of the CME Merger.

On February 24, 2015, Moody’s continued its review for downgrade on our 8.375% Senior Notes after our Board of Directors unanimously agreed to support BGC’s tender offer for all of the outstanding shares of GFI common stock. On March 3, 2015, Fitch placed our 8.375% Senior Notes rating on Rating Watch Positive following the successful completion of BGC’s tender offer for GFI shares.  On March 9, 2015, S&P placed our 8.375% Senior Notes rating on CreditWatch Positive following the successful completion of BGC’s tender offer for GFI shares.

On April 29, 2015, S&P raised its credit rating on our 8.375% Senior Notes four notches to BB+, following the announcement that BGC gained the two-thirds ownership necessary to effect the full merger of GFI. See Note 20 of the Condensed Consolidated Financial Statements under “Related party transactions” for further information on GFI’s issuance of shares to BGC. S&P indicated its rating on our 8.375% Senior Notes remained on CreditWatch with positive implications. On May 6, 2015, Fitch increased its credit rating on our 8.375% Senior Notes four notches to BB+ and has also removed our 8.375% Senior Notes rating  the from Rating Watch Positive and assigned a Positive Rating Outlook, following the purchase of additional GFI shares by BGC. The recent upgrades from S&P and Fitch will lower our interest rate by 100 basis points. Any upgrade from Moody’s could also lower our rate on the Senior Notes up to a maximum of 50 basis points.

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Dividends Paid

Prior to 2008, we retained all earnings for investment in our business. In February 2008, our Board of Directors approved a policy of paying quarterly dividends, subject to available cash flow from operations, other considerations and the determination of the amount by our Board of Directors. The payment of quarterly dividends was suspended by the Company’s Board during the third quarter of 2014, in conjunction with the then-pending Amended CME Merger Agreement.  Following the Company’s acquisition by BGC the payment of quarterly dividends continues to be suspended. Therefore, the Company did not pay a cash dividend during the first quarter of 2015. Cash dividends paid for the three months ended March 31, 2014 were approximately $6.2 million.

Common Stock

We may purchase additional shares of our common stock on the open market from time to time in accordance with a stock repurchase program authorized by our Board of Directors. See Note 9 to our Condensed Consolidated Financial Statements for further discussion of stock repurchases.

Contractual Obligations and Commitments

The following table summarizes certain of our contractual obligations as of March 31, 2015:

	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(in thousands)
Contractual Obligations
Operating leases	$	133,077	$	13,711	$	23,825	$	23,262	$	72,279
Short-term borrowings	60,000		60,000		—		—		—
Interest on Long-term debt (1)	87,150		24,900		49,800		12,450		—
Long-term debt	240,000		—		—		240,000		—
Purchase obligations (2)	23,472		18,711		4,470		291		—
Total	$	543,699	$	117,322	$	78,095	$	276,003	$	72,279

(1)The amounts listed under Interest on Long-term debt includes increases to our applicable per annum interest on our 8.375% Senior Notes that were effective as a result of downgrades to our credit rating by the various credit agencies in 2012 and 2013. In the event that our credit ratings are subsequently increased or decreased, the applicable per annum interest could change and the amounts disclosed in this table would change; provided, however, the applicable per annum interest rate cannot increase by more than 200 basis points over the original interest rate, which is the maximum increase permitted under the indenture. See Note 8 and Note 20 to the Condensed Consolidated Financial Statements for further details.

(2)The amounts listed under Purchase Obligations include agreements for quotes with various information service providers. Additionally, such amounts include purchase commitments for capital expenditures. See Note 12 to our Condensed Consolidated Financial Statements for further discussion.

We have unrecognized tax benefits (net of the federal benefit on state positions) of approximately $8.0 million, excluding interest of $1.2 million. Due to the uncertainty of the amounts to be ultimately paid as well as the timing of such payments, all liabilities for uncertain tax positions that have not been paid are excluded from the Contractual Obligations and Commitments table.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements at March 31, 2015 as defined in Item 303(A)(4)(ii) of SEC Regulation S-K.

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Critical Accounting Policies and Estimates

We have disclosed in Note 3 to our Condensed Consolidated Financial Statements and in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2014 Form 10-K those accounting policies that we consider to be significant in determining our results of operations and financial condition. There have been no material changes to those policies that we consider to be significant since our 2014 Form 10-K. The accounting principles utilized by us in preparing our Condensed Consolidated Financial Statements conform in all material respects to generally accepted accounting principles in the United States of America.

Recent Accounting Pronouncements

Refer to Note 3 to our Condensed Consolidated Financial Statements for a discussion of new accounting pronouncements.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our quantitative and qualitative disclosures about market risk are described in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 7A—Quantitative and Qualitative Disclosures about Market Risk” contained in the 2014 Form 10-K. Except as described below in this Form 10-Q, there have been no material changes to those market risks during the three months ended March 31, 2015.

Foreign Currency Exposure Risk

We are exposed to risks associated with changes in foreign exchange rates related to our international operations. As foreign currency exchange rates change, the U.S. Dollar equivalent of revenues and expenses denominated in foreign currencies change. Our U.K. operations generate a large majority of their revenues in U.S. Dollars and Euros but pay a significant amount of their expenses in British Pounds. We enter into foreign exchange forward contracts (“Foreign Exchange Derivative Contracts”) to mitigate our exposure to foreign currency exchange rate fluctuations. At March 31, 2015 and December 31, 2014, we had no Foreign Exchange Derivative Contracts that were designated as foreign currency cash flow hedges. We do not use derivative contracts for speculative purposes.

We are also exposed to counterparty credit risk for nonperformance of Foreign Exchange Derivative Contracts and in the event of nonperformance, to market risk for changes in currency rates. The counterparties with whom we execute foreign exchange derivative contracts are major international financial institutions. We monitor our positions with, and the credit quality of, these financial institutions and we do not anticipate nonperformance by the counterparties.

While our international results of operations, as measured in U.S. Dollars, are subject to foreign exchange rate fluctuations, we do not consider the related risk to be material to our results of operations. If the Euro strengthened against the U.S. Dollar by 10% and the British Pound Sterling weakened by 10% against the U.S. Dollar, the net impact to our net income would be a reduction of approximately $3.2 million as of March 31, 2015.

ITEM 4.CONTROLS AND PROCEDURES

As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), were effective as of the end of the period covered by this report.

In addition, our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated our internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) and determined that there have been no changes in our internal controls over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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Other Financial Information

PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 (the “Securities Act”) for their report on the unaudited consolidated financial information because that report is not a “report” or a “part” of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Securities Act.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

GFI Group Inc.:

We have reviewed the accompanying condensed consolidated statement of financial condition of GFI Group Inc. and its subsidiaries as of March 31, 2015, and the related condensed consolidated statements of operations and comprehensive (loss) income for the three-month periods ended March 31, 2015 and March 31, 2014 and the condensed consolidated statement of cash flows for the three month periods ended March 31, 2015 and March 31, 2014.  These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial condition as of December 31, 2014, and the related consolidated statement of operations and comprehensive loss, and of cash flows for the year then ended (not presented herein), and in our report dated March 13, 2015, we expressed an unqualified opinion on those consolidated financial statements.  In our opinion, the information set forth in the accompanying condensed consolidated statement of financial condition as of December 31, 2014, is fairly stated in all material respects in relation to the consolidated statement of financial condition from which it has been derived.

/s/ PricewaterhouseCoopers LLP

New York, New York

May 11, 2015

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PART II—OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

See Note 12—“Commitments and Contingencies” to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated by reference herein.

ITEM 1A.RISK FACTORS

Except as set forth below, there have been no material changes in our risk factors from those disclosed in the 2014 Form 10-K. For a discussion of those risk factors affecting the Company, see “Risk Factors” in Part I, Item 1A of our 2014 Form 10-K.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The table below sets forth the information with respect to purchases made by the Company of its common stock during the quarterly period ended March 31, 2015.

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased	Average Price Paid Per Share
January
Employee Transactions(a)	101,898	$	5.61
February
Employee Transactions(a)	—	$		—
March
Employee Transactions(a)	—	$			—

(a)Under our 2008 Equity Incentive Plan, we withhold shares of common stock to satisfy minimum statutory tax withholding obligations arising on the vesting and settlement of restricted stock units. When we withhold these shares, we are required to remit to the appropriate taxing authorities the market price of the shares withheld, which could be deemed a purchase of the shares of our common stock by us on the date of withholding.

ITEM 5. Other Information

Subsequent Event:

On May 7, 2015, the Company’s Board appointed Sean A. Windeatt as the Company’s Chief Operating Officer.  Mr. Windeatt, 41, has been the Chief Operating Officer of BGC Partners Inc. since January 2009. Prior to that, Mr. Windeatt was an Executive Managing Director and Vice President of BGC Partners since 2007 and served as a Director of Cantor Fitzgerald International from 2004 to 2007. Mr. Windeatt has also served as a Business Manager and member of the finance department of Cantor Fitzgerald International from 1997 to 2003.

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ITEM 6.EXHIBITS

Exhibits:

Exhibit No.	Description
10.1	Fourth Amendment to Credit Agreement, dated as of April 30, 2015, among GFI Group Inc. and GFI Holdings Limited, as Borrowers, certain subsidiaries of the Company as Guarantors, various Lenders and Bank of America, N.A., as Administrative Agent
10.2	Employment Agreement, dated as of April 15, 2015, between BGC Partners, L.P., GFI Group Inc., and Michael A. Gooch
10.3	Amended and Restated Employment Agreement, dated as of April 30, 2015, between BGC Partners, L.P., GFI Group Inc., and Colin Heffron
10.4	Separation from Employment Agreement, dated as of April 30, 2015, between GFI Group Inc. and Ronald Levi
31.1	Certification of Principal Executive Officer.
31.2	Certification of Principal Financial Officer.
32.1	Written Statement of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
32.2	Written Statement of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

(*) Filed with this Quarterly Report on Form 10-Q and included in Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Financial Condition as of March 31, 2015 and December 31, 2014, (ii) the Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, (iii) the Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2015 and 2014,  (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014 (v) the Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three months ended March 31, 2015 and (vi) Notes to Condensed Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 to be signed on its behalf by the undersigned, thereunto duly authorized, on the 11th day of May, 2015.

GFI GROUP INC.
	By:		/s/ JAMES A. PEERS
		Name:	James A. Peers
		Title:	Chief Financial Officer
			(principal financial and accounting officer)

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EX-10.1

Exhibit 10.1

EXECUTION VERSION

FOURTH AMENDMENT TO CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT dated as of April 30, 2015 (the “Agreement”) is entered into among GFI GROUP INC., a Delaware corporation (“GFI”), GFI HOLDINGS LIMITED, a company incorporated under the laws of England and Wales (the “Foreign Borrower”; together with GFI, the “Borrowers”), the Guarantors, the Lenders party hereto and BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”). All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (as defined below).

RECITALS

WHEREAS, the Borrowers, the Guarantors, the Lenders and the Administrative Agent entered into that certain Second Amended and Restated Credit Agreement dated as of December 20, 2010 (as amended by that certain First Amendment to Credit Agreement and Consent dated as of March 6, 2013, that certain Second Amendment to Credit Agreement dated as of July 28, 2014, that certain Third Amendment to Credit Agreement dated as of February 27, 2015 and as further amended or modified from time to time prior to the date hereof, the “Credit Agreement”); and

WHEREAS, the Borrowers have requested and the Required Lenders have agreed to amend certain terms of the Credit Agreement as set forth below.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Amendment to the Credit Agreement.  Section 8.11(a) of the Credit Agreement is hereby amended to read in its entirety as follows:

(a)Consolidated Capital.  Permit Consolidated Capital at any time to be less than $215,000,000; provided that such minimum amount shall be increased at the end of each fiscal quarter of GFI, commencing with the fiscal quarter ending June 30, 2015, on a cumulative basis by an amount equal to 35% of Consolidated Net Income (to the extent positive) for such period; provided, further, that, notwithstanding the foregoing, in no event shall Consolidated Capital be required to be greater than $450,000,000 under this Section 8.11(a).

2.Conditions Precedent.  This Agreement shall be effective upon receipt by the Administrative Agent of counterparts of this Agreement duly executed by the Borrowers, the Guarantors and the Required Lenders.

3.Miscellaneous.

(a)The Credit Agreement, and the obligations of the Loan Parties thereunder and under the other Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms.

(b)Each Guarantor (i) acknowledges and consents to all of the terms and conditions of this Agreement, (ii) affirms all of its obligations under the Loan Documents and (iii) agrees that this Agreement and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Credit Agreement or the other Loan Documents.

(c)The Borrowers and the Guarantors hereby represent and warrant as follows:

(i)Each Loan Party has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

(ii)This Agreement has been duly executed and delivered by the Loan Parties and constitutes each of the Loan Parties’ legal, valid and binding obligations, enforceable against it in accordance with its terms, except as such enforceability may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (B) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(iii)No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by any Loan Party of this Agreement other than those which have been obtained and are in full force and effect.

(iv)The representations and warranties of the Loan Parties set forth in Article VI of the Credit Agreement and in each other Loan Document are true and correct in all material respects as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent such representations and warranties expressly relate solely to an earlier date.

(v)No event has occurred and is continuing which constitutes a Default or an Event of Default.

(d)This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by telecopy or other electronic means shall be effective as an original and shall constitute a representation that an executed original shall be delivered.

(e)THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[remainder of page intentionally left blank]

2

Each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

GFI:	GFI GROUP INC.,
	a Delaware corporation, as a Borrower and, with respect to the Foreign Obligations, as a Guarantor
	By:	/s/ James A. Peers
	Name:			James A. Peers
	Title:			Chief Financial Officer
FOREIGN BORROWER:	GFI HOLDINGS LIMITED,
	a company incorporated under the laws of England and Wales
	By:		/s/ James A. Peers
	Name:			James A. Peers
	Title:			Chief Financial Officer
DOMESTIC GUARANTORS:	GFI GROUP LLC,
	a New York limited liability company
	By:	/s/ James A. Peers
	Name:			James A. Peers
	Title:			Chief Financial Officer
	GFINET INC.,
	a Delaware corporation
	By:	/s/ James A. Peers
	Name:			James A. Peers
	Title:			Chief Financial Officer
	GFI MARKETS LLC,
	a Delaware limited liability company
	By:	/s/ James A. Peers
	Name:			James A. Peers
	Title:			Chief Financial Officer
	FENICS SOFTWARE INC.,
	a Delaware corporation
	By:	/s/ James A. Peers
	Name:			James A. Peers
	Title:			Chief Financial Officer

GFI GROUP INC.

FOURTH AMENDMENT TO CREDIT AGREEMENT

FOREIGN GUARANTORS:	FENICS LIMITED,
	a company incorporated under the
	laws of England and Wales
	By:	/s/ James A. Peers
	Name:		James A. Peers
	Title:		Chief Financial Officer
	FENICS SOFTWARE LIMITED,
	a company incorporated under the
	laws of England and Wales
	By:	/s/ James A. Peers
	Name:		James A. Peers
	Title:		Chief Financial Officer
	GFINET EUROPE LIMITED,
	a company incorporated under the laws of England and Wales
	By:	/s/ James A. Peers
	Name:		James A. Peers
	Title:		Chief Financial Officer
	GFI TP LTD.,
	a company incorporated under the laws of England and Wales
	By:	/s/ James A. Peers
	Name:		James A. Peers
	Title:		Chief Financial Officer
	GFI MARKETS LTD.,
	a company incorporated under the laws of England and Wales
	By:	/s/ James A. Peers
	Name:		James A. Peers
	Title:		Chief Financial Officer
	GFI NEWGATE LIMITED,
	a company incorporated under the
	laws of England and Wales
	By:	/s/ James A. Peers
	Name:		James A. Peers
	Title:		Chief Financial Officer

GFI GROUP INC.

FOURTH AMENDMENT TO CREDIT AGREEMENT

TRAYPORT, LTD.,
a company incorporated under the
laws of England and Wales
By:	/s/ James A. Peers
Name:		James A. Peers
Title:		Chief Financial Officer

GFI GROUP INC.

FOURTH AMENDMENT TO CREDIT AGREEMENT

ADMINISTRATIVE
AGENT:	BANK OF AMERICA, N.A.,
	as Administrative Agent
	By:		/s/ Shubhashis De
	Name:			Shubhashis De
	Title:			Vice President
LENDERS:	BANK OF AMERICA, N.A.,
	as a Lender and an L/C Issuer
	By:	/s/ Shubhashis De
	Name:			Shubhashis De
	Title:			Vice President
	BANK OF MONTREAL, as a Lender
	By:			Bank of Montreal – Chicago Branch
	By:			/s/ Nicholas Buckingham
	Name:			Nicholas Buckingham
	Title:			Vice President
	By:			Bank of Montreal – London Branch
	By:			/s/ Lisa Rodriguez
	Name:			Lisa Rodriguez
	Title:			Managing Director
	THE ROYAL BANK OF SCOTLAND PLC, as a Lender
	By:			/s/ Nick Armstrong
	Name:			Nick Armstrong
	Title:			Vice President
	JPMORGAN CHASE BANK, N.A., as a Lender
	By:
	Name:
	Title:

GFI GROUP INC.

FOURTH AMENDMENT TO CREDIT AGREEMENT

EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of April 15, 2015 (such date, the “Effective Date”), by and between BGC Partners, L.P., a Delaware limited partnership (“BGC”), GFI Group Inc., a Delaware corporation (together with its successors and assigns, the “Company”), and Michael Gooch, an individual (“Executive”) (BGC, the Company and Executive collectively referred to herein as the “Parties”).

WHEREAS, Executive is currently employed by the Company; and

WHEREAS, BGC and the Company have entered into a Tender Offer Agreement, dated as of February 19, 2015 (the “Tender Offer Agreement”), pursuant to which the parties have agreed to make certain representations, warranties, covenants and agreements in connection with BGC’s cash tender offer to purchase all of the outstanding shares of common stock of the Company (the “Offer”); and

WHEREAS, the Parties desire to enter into an employment agreement (this “Agreement”), on the terms and conditions set forth below, to provide for the continuing employment of Executive after the acceptance for payment of shares of the Company’s common stock pursuant to and subject to the terms of the Offer upon expiration of the Offer (the “Offer Closing”).

NOW, THEREFORE, in consideration of the mutual agreements set forth below, the Parties therefore agree as follows:

Section 1.  Employment and Term.

The Company will continue to employ Executive on the terms and conditions set forth in this Agreement as Executive Chairman of the GFI Division (as defined below) and Vice Chairman of BGC, with the duties set forth in Section 2 of this Agreement, for a term beginning on the Effective Date and ending on October 31, 2018 (such period, the “Term of Employment”).  Upon the end of the Term of Employment, Executive will resign from any officer and/or director positions he may hold.

Section 2.  Duties.

During the Term of Employment, Executive (i) shall have such duties as Executive and the then-Chairman or then-President of BGC reasonably agree from time to time and shall dedicate as much time as is, in Executive’s reasonable judgment, necessary or advisable for the performance of such duties, (ii) shall have such authority as designated by the then-Chairman or then-President of BGC from time to time, (iii) upon request by the then-Chairman or then-President of BGC (or his designee), shall use his reasonable best efforts to assist the then-Chairman or then-President of BGC (or his designee) to advance the interests of the Company and its Affiliates within a reasonable amount of time of such request, and (v) shall not engage in any activity inimical to the best interests of the Company, the GFI Brand (as defined below), BGC or any of their respective Affiliates (including, but not limited to, acting in violation of BGC’s written policies and procedures as in effect from time to time to be provided to Executive that are not in direct conflict with this Agreement) and shall not otherwise take any action to harm, that harms, or that could reasonably be expected to harm, the Company, BGC or any of their respective Affiliates. 

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The Parties expressly agree that Executive’s position hereunder is not a full-time position and that Executive’s duties shall not involve any fixed time commitment on the part of Executive. From the Effective Date through the closing of the Back-End Mergers pursuant to Section 5.16 of the Tender Offer Agreement, Executive agrees to serve as a director of the Company, provided that if the Election (as defined in the Tender Offer Agreement) is not made by the expiration of the Election Period (as defined in the Tender Offer Agreement), Executive shall immediately resign his position as director of the Company. For purposes of this Agreement, the terms “GFI Division” and “GFI Brand” shall be used interchangeably and shall mean, as applicable, (i) the inter-dealer brokerage business, as conducted by the Company and its subsidiaries (the “IDB Business”), or (ii) the IDB Business, as conducted by the Company and its subsidiaries, operating as a GFI-branded division of either BGC of an Affiliate of BGC.

Section 3.  Compensation and Fringe Benefits During the Term of Employment.

(a)        Base Salary.  During the Term of Employment, the Company shall pay Executive a base salary at the annualized rate of Thirty-Six Thousand Dollars ($36,000) (“Salary”), prorated for any partial year, payable in accordance with the applicable payroll practices in effect at the time.

(b)        Equity Compensation.  With respect to each fiscal year (or partial fiscal year) of BGC Partners, Inc. (“BGCP”) during the Term of Employment, Executive shall receive, subject to the terms and conditions set out in this Agreement, one or more awards (each, an “Award”) of REUs and PREUs in BGC Holdings, L.P. (“BGCHLP”) having a combined aggregate Post-Termination Amount (as defined in the Agreement of Limited Partnership of BGC Holdings, L.P. amended and restated as of March 31, 2008, as amended from time to time (the “BGC Partnership Agreement”)) of One Million Dollars ($1,000,000) on an annualized basis (prorated for any partial fiscal year of BGCP during the Term of Employment) as determined and administered in accordance with the then-current practices of BGCHLP (the “Annual Award”), provided that the Annual Award will be granted in quarterly installments, such that Executive will receive Awards with an aggregate Post-Termination Amount of Two Hundred Fifty Thousand Dollars ($250,000) as soon as practicable following the end of each fiscal quarter (prorated for any partial fiscal quarter of BGCP during the Term of Employment), and further provided that a portion of the above-referenced REUs and PREUs having a Post-Termination Amount of Thirty-Six Thousand Dollars ($36,000) on an annualized basis shall be subject to the satisfactory achievement of such performance goals as may be established by the Compensation Committee or such other applicable committee or group of independent directors of the Company, the GFI Brand, or BGCP, as appropriate and applicable, in its absolute discretion from time to time.  The ratio of REUs and PREUs in each Award shall be consistent with the then-current ratio in which REUs and PREUs are distributed to BGC’s senior executives based in the United States.  All REUs and PREUs issued in satisfaction of the obligation under this Section 3(b) shall be fully vested on issuance. Each Award shall only be forfeitable if Executive violates any restrictive covenants, including, without limitation, any of the Covenants (as defined below) and any restrictive covenants set forth in the Non-Competition and DE Bonus Award Agreement to be entered into between Executive and BGC Partners, Inc. (the “DE Bonus Award Agreement”) or the agreement containing certain obligations, conditions and covenants set forth in Annex B to the Tender Offer Agreement to be entered into by Executive in connection with the Back-End Mergers pursuant to Section 5.16 of the Tender Offer Agreement.

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Receipt by Executive of each Award shall be subject to the terms of the BGC Partnership Agreement and the BGCHLP Participation Plan, as amended from time to time, and any applicable award agreement thereunder, which shall be generally consistent with the terms of regular compensatory awards of the same partnership unit types.

(c)        Discretionary Bonus.  Executive may also be eligible to receive discretionary bonuses during the Term of Employment.  Any such discretionary bonus may be in the form of cash, a contingent non-cash grant or a combination thereof, subject to the terms of the grant document(s) under which such non-cash grant was awarded, including any vesting and cancellation provisions and restrictive covenants contained therein. Employee understands that such non-cash grant (if any) may consist of REUs, RPUs, PSEs, PSIs or PSUs as those terms are defined in the BGC Partnership Agreement, or may consist of any other form of non-cash grant.  With respect to each such discretionary bonus (if any), as of the bonus payment date, Employee must still be employed by and performing substantial services for BGC, not given notice of resignation, and not breached this Agreement in order to receive any bonus.

(d)       Deferred Cash Award.  As additional consideration for Executive entering into this Agreement and in recognition of the contributions Executive is expected to make to the Company, the Company shall accelerate and vest the 94,487 unvested restricted stock units granted to Executive pursuant to the Restricted Stock Unit Award Agreement pursuant to the GFI Group Inc. 2008 Equity Incentive Plan between the Company and Executive dated as of March 31, 2013 and the Restricted Stock Unit Award Agreement pursuant to the GFI Group Inc. 2008 Equity Incentive Plan between the Company and Executive dated as of March 31, 2014 (collectively, the “2013 and 2014 Award Agreements”), which have been converted to Deferred Cash Awards pursuant to the Tender Offer Agreement, and shall accelerate and vest the Deferred Cash Award in the amount of One Hundred Twenty-Five Thousand Dollars ($125,000) that was awarded to Executive on or around March 31, 2015 (together with the 94,487 unvested restricted stock units granted pursuant to the 2013 and 2014 Award Agreements, the “Outstanding Deferred Cash Awards”). Executive agrees and acknowledges that the Outstanding Deferred Cash Awards have a total aggregate value of Seven Hundred and One Thousand Three Hundred Seventy-One Dollars ($701,371). The Outstanding Deferred Cash Awards shall be accelerated and payable to Executive within ten (10) days of this Agreement being fully executed. Employee agrees and acknowledges that payment of the Outstanding Deferred Cash Awards pursuant to this Section 3(d) shall be in full satisfaction of any rights or interest he had, has, or might have in respect of the 2013 and 2014 Award Agreements and the Deferred Cash Award made to him on or about March 31, 2015, and Executive releases all claims, known or unknown, with respect to such awards.

(e)        Fringe Benefits.  During the Term of Employment, the Company shall make available to Executive the following benefits and perquisites: (i) access to use of the Company’s then-current corporate apartment in New York, New York, which may be available to other Company executives from time to time, (ii) continued use of Executive’s office as of the Effective Date, or another suitable office located in New York, New York, and (iii) a full-time personal secretary, consistent with Executive’s arrangements in effect as of the Effective Date.

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(f)        Expenses.  During the Term of Employment, the Company shall reimburse Executive for normal, reasonable, and approved out-of-pocket business expenses incurred by Executive in connection with the performance of his duties and responsibilities hereunder (including, without limitation, reasonable travel expenses) in accordance with the Company’s travel and entertainment expense policy applicable to Executive (which may be modified or amended as determined by the Company from time to time); provided that if Executive is authorized to travel via air in connection with the performance of his duties and responsibilities under this Agreement, Executive may travel by business class notwithstanding anything to the contrary in the applicable travel and entertainment expense policy.

(g)        Withholding.  All compensation payable under this Agreement shall be subject to applicable withholding and other applicable taxes and deductions and shall become earned and payable only if Executive is employed by the Company or any of its Affiliates at the time payment is made.  For the avoidance of doubt, in no event shall any amounts received by Executive (i) with respect to any dividends payable for his shares of the Company, (ii) pursuant to the tendering of any shares in connection with the Offer, or (iii) in connection with the closing of the Back-End Mergers (as defined in the Tender Offer Agreement), in each case excepting payments with respect to unvested shares, if any, owned by Executive for which an election under Section 83(b) of the Internal Revenue Code has not been properly made, be characterized by the Company as compensation for services provided by Executive for the Company for tax purposes. Notwithstanding the foregoing, if the Internal Revenue Service or any other applicable taxing authority asserts a claim against Executive characterizing any such payments as compensation, the Company may file a protective claim to characterize such payments as compensation and shall resolve any such claim in the same manner as the assertion by such applicable taxing authority is finally resolved against Executive.

Section 4.        Assignment of Inventions and Intellectual Property.

(a)        The term “Proprietary Rights” means all trade secrets, trademarks, service marks, patents, copyrights, mask works and other intellectual property rights throughout the world.  The term “Inventions” means all Proprietary Rights, inventions, ideas, processes, formulas, source and object codes, data, programs, technology, writings, software programs, other works of authorship, know-how, discoveries, developments, designs, schematics, manuals, drawings, techniques, employee suggestions, development tools, computer printouts, or any claim of rights (or any related improvements or modifications to the foregoing).

(b)        Subject to Sections 4(c) and 4(d), Executive hereby assigns and agrees to assign in the future (when any such Invention or Proprietary Right is first reduced to practice or first fixed in a tangible medium, as applicable) to the Company, BGC or any of their respective Affiliates, as applicable, all right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto), whether or not patentable or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by Executive, either alone or jointly with others, during or at any time after the period of employment with the Company, which (i) relate to methods, designs, brokerage or other products, trading systems and screens or any other processes which relate to or pertain to the actual or anticipated business, functions, operations, research or development of the Company, BGC or any of their respective Affiliates, (ii) arise (wholly or partly) from Executive’s efforts during any time that Executive is employed by the Company or utilizing any physical or intellectual property owned by the Company, BGC or any of their respective Affiliates, or (iii) is based on any information or knowledge gained by Executive through his employment with the Company. 

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Inventions assigned to the Company, or to a third party as directed by the Company pursuant to this Section, are hereinafter referred to as “Company Inventions.”

(c)        During Executive’s period of employment, and for twelve (12) months thereafter, Executive will promptly disclose to the Company, fully and in writing, all Inventions authored, conceived or reduced to practice by Executive, either alone or jointly with others.  In addition, Executive will promptly disclose to the Company all patent applications filed by Executive or on his behalf within twelve (12) months after termination of employment.

(d)       Executive also agrees to assign all right, title and interest in and to any particular Company Invention to a third party as directed by the Company.

(e)        Executive acknowledges that all original works of authorship which are made by Executive (solely or jointly with others) within the scope of his employment with the Company and which may be protected by copyright are “works made for hire”, pursuant to United States Copyright Act (17 U.S.C. Section 101) and are the property of the Company, BGC or any of their respective Affiliates, as applicable, without limitation which shall own all rights of copyright therein including the sole and exclusive right to reproduce such works in multiple copies of distribution or sale to the public and to create and exploit derivative works based thereon.

(f)        Executive will execute, verify and deliver assignments of such Proprietary Rights to the Company or its designee.  Executive’s obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries will continue beyond the termination of employment.

Section 5.  Restrictive Covenants.

(a)        General.  Executive covenants and agrees that he shall not, at all times while employed by the Company, BGC, BGCP or any of their Affiliates (collectively, the “BGCP Group”) and for a period of twelve (12) years after termination of Executive’s employment for any reason (collectively, the “Restricted Period”), directly or indirectly, alone or by action in concert with others (including with or through any Representative):

(i)         solicit, induce, or influence, or attempt to solicit, induce or influence, any partner, employee or consultant of BGCP or any of its Affiliates (which, for avoidance of doubt, include, without limitation, the Company and any Affiliates thereof), or any member of the Cantor Group (as defined herein) to terminate their employment or other business arrangements with BGCP or any of its Affiliates or any member of the Cantor Group, or to engage in any Competing Business or hire, employ, engage (including as a consultant or partner) or otherwise enter into a Competing Business with any such Person;

(ii)        solicit any of the customers of BGCP or any of its Affiliates, or any member of the Cantor Group (or any of their employees), induce such customers or their employees to reduce their volume of business with, terminate their relationship with or otherwise adversely affect their relationship with, BGCP or any of its Affiliates or any member of the Cantor Group;

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(iii)       do business (if such business would constitute a Competing Business) with any person who was a customer of BGCP or any of its Affiliates or any member of the Cantor Group during the twelve (12) month period prior to the applicable date during the Restricted Period on which a determination of whether any such activity constitutes a Competing Business is being made for purposes of this Agreement;

(iv)       directly or indirectly engage in, represent in any way, or be connected with, any Competing Business, competing with the business of BGCP or any of its Affiliates or any member of the Cantor Group, whether such engagement shall be as an officer, director, owner, employee, partner, consultant, Affiliate, investor, creditor or other participant in any Competing Business;

(v)        assist others in engaging in any Competing Business in the manner described in the foregoing clause (iv);

(vi)       take any action that results directly or indirectly in revenues or other benefit for Executive or any third party that is or could be considered to be engaged in any activity of the nature set forth in clauses (ii) through (v) above;

(vii)      make or participate in the making of (including through any of Executive’s Representatives) any comments to the media (print, broadcast, electronic or otherwise) that are disparaging regarding (A) BGCP, any member of the Cantor Group or any of their Affiliates, or (B) the senior executive officers of  BGCP, any member of the Cantor Group or any of their Affiliates, or are otherwise contrary to the interests of BGCP, any member of the Cantor Group or any of their Affiliates, as determined by the General Partner in its sole and absolute discretion;

(viii)     breach Executive’s duty of loyalty to the Partnership (as defined below);

(ix)       take advantage of, or provide another person with the opportunity to take advantage of, a “corporate opportunity” (as such term would apply to the Partnership if it were a corporation) including opportunities related to intellectual property, which for this purpose shall require granting BGC Partners, LLC (the “General Partner”) a right of first refusal for the General Partner to acquire any assets, stock or other ownership interest in a business being sold by Executive or any Affiliate of Executive, if an investment in such business would constitute a “corporate opportunity” (as such term would apply to the Partnership if it were a corporation), that has not been presented to and rejected by the General Partner or that the General Partner rejects but reserves for possible further action by the General Partner in writing, unless otherwise consented to by the General Partner  in writing in its sole and absolute discretion; or

(x)        otherwise take any action to harm, that harms, or that reasonably could be expected to harm BGCP or any of its Affiliates, or any member of the Cantor Group, including, without limitation, any breach of the provisions of Section 5(c) below.

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(b)        Notwithstanding the foregoing, nothing in this Section 5 shall prohibit Executive from acquiring or owning, in accordance with BGCP’s policies and procedures regarding personal securities transactions (for so long as Executive is an employee of BGCP or one of its Affiliates), less than one percent (1%) of the outstanding securities of any class of any corporation that are listed on a national securities exchange or traded in the over-the-counter market.  The determination of whether Executive breaches any of the conditions, obligations and covenants (the “Covenants”) set forth in Section 5(a) or Section 5(c) shall be made in good faith by the then-Chairman of BGCP (or his designee).

(c)        Confidentiality.

(i)         In addition to any other obligations set forth in this Agreement, Executive recognizes that confidential information has been and will be disclosed to such Executive by the Partnership (as defined herein) and members of the BGCP Group (including but not limited to the Company and the GFI Brand). Executive expressly agrees, at all times on and after the date of this Agreement, whether or not at the time a member of the Partnership (a “Partner”) or providing services to the Partnership, any member of the BGCP Group (including, without limitation, as an employee of the Company and the GFI Brand), to (A) maintain the confidentiality of, and not disclose to any Person without the prior written consent of BGCP, any financial, legal or other advisor to BGCP, any information relating to the business, clients, affairs or financial structure, position or results of the Partnership or its Affiliates (including the Company and the GFI Brand) or any dispute that shall not be generally known to the public or the securities industry and (B) not to use such confidential information other than for the purpose of evaluating such Executive’s investment in the Partnership, if applicable, or in connection with the discharge of any duties to the Partnership or any member of the BGCP Group (including the Company and the GFI Brand) Executive may have in such Executive’s capacity as an officer, director, employee or agent of any member of the BGCP Group (including the Company and the GFI Brand).

(ii)        In the event that any third party requests information from Executive (whether during the period in which Executive is a Partner or otherwise during the Restricted Period), regarding any matter related to Executive’s employment by any member of the BGCP Group (including the Company and the GFI Brand) or Executive’s role as a Partner, as the case may be, Executive will promptly contact and notify the General Counsel of BGCP before responding to such requests for information, so that BGCP may take appropriate action to protect the Partnership’s and the BGCP Group’s interests. However, Executive shall not have any obligation to contact and notify the General Counsel of BGCP prior to any such timely discussions between Executive and his or her legal counsel or his or her certified public accountant.

(iii)       In the event that Executive is subpoenaed, or asked, to testify as a witness or to produce documents in any legal or administrative or other proceeding related to the Partnership or any member of the BGCP Group (whether during the period in which Executive is a Partner or otherwise during the Restricted Period), or otherwise required by law to disclose confidential information, Executive will promptly notify the Partnership and BGCP of such subpoena or request and meet with Partnership Representatives for a reasonable period of time prior to any such appearance or production.

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(iv)       So long as Executive shall have complied with his or her obligations under clauses (ii) and (iii) of Section 5(c), if, after a reasonable period after Executive notifies the Partnership and BGCP of any request or subpoena, the Partnership and BGCP are not able to obtain a protective order or other appropriate protection of such information, then Executive may make such disclosures, notwithstanding any other restrictions contained in this Agreement.

(d)       Definitions.  Defined terms used but not otherwise defined in this Section 5 or otherwise in this Agreement shall have the meanings given to them in the Tender Offer Agreement.  For purposes of this Agreement, the following terms shall have the following meanings:

“Affiliate” means, with respect to any Person, at the time of determination, another Person, whether now existing or hereafter arising, that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether though the ownership of voting securities, by contact, as trustee or executor or otherwise.

“Cantor Group” means, collectively, Cantor Fitzgerald, L.P., a Delaware limited partnership, its subsidiaries, and the limited and general partnerships, corporations or other entities owned, controlled by or under common control with BGCP or BGC Holdings, L.P., a Delaware limited partnership (the “Partnership”).

“Competing Business” means an activity that (w) involves the development and operations of voice, hybrid or electronic trading systems, (x) involves the conduct of the wholesale or institutional brokerage business, (y) consists of marketing, manipulating or distributing financial price or other information of a type supplied by BGCP or any of its Affiliates or any member of the Cantor Group to information distribution services or (z) competes with any other business conducted by BGCP or any of its Affiliates, or any member of the Cantor Group if such business was first engaged in by BGCP or any of its Affiliates or any member of the Cantor Group or BGCP or any of its Affiliates or any member of the Cantor Group took substantial steps in anticipation of commencing such business and prior to the applicable date during the Restricted Period that a determination of whether any such activity constitutes a Competing Business is being made for purposes of this Agreement; including, for the avoidance of doubt, on and after the Offer Closing Date, any business activity, wholly or partly, in the same or similar business operated by (including providing services or products similar to or that compete with the products and/or services offered or contemplated by) the Company and its Affiliates (including the GFI Brand), or any such business which is contemplated by the Company or its Affiliates for which the Company or any Affiliate has taken preparatory steps at the later of the Determination Date or the date Executive ceases to provide services to the BGCP Group (including without limitation the GFI Brand).

“Person” means an individual, corporation, limited liability company, company, body corporate, partnership (whether or not having separate legal personality), association, trust, unincorporated organization, other entity or group (as defined in the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

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“Representatives” means, with respect to any Person, the Affiliates, directors, officers, employees, general partners, agents, accountants, managing member, employees, counsel and other advisors and representatives of such Person, including immediate family members.

Section 6.Severability of Covenants.

The Covenants contained in Section 5 shall be construed as a series of separate covenants. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then the Parties agree that such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of Section 5 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then the Parties agree that such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable law.

Section 7.Executive Acknowledgements and Further Agreements.

(a)Executive acknowledges that (i) Executive has a substantial interest in the Company and is a key employee of the Company; (ii) the goodwill associated with the existing business, customers and assets of the Company prior to the Offer Closing is an integral component of the value of the Company to BGCP and is reflected in the consideration payable in connection with the Offer Closing; and (iii) Executive’s agreement as set forth herein is necessary to preserve the value of the Company for BGCP following the Offer Closing. Executive also acknowledges and agrees that the provisions of this Agreement, specifically including of Section 5, are reasonable in scope and duration and are necessary to protect the interests of BGCP and the Company, including, without limitation, because, among other things: (A) the Company and BGC are engaged in a highly competitive industry; (B) Executive has had unique access to the trade secrets and know-how of the Company, including, without limitation, the plans and strategy (and, in particular, the competitive strategy) of the GFI Brand; and (C) Executive believes that this Agreement provides no more protection than is reasonably necessary to protect BGCP’s legitimate interest in the goodwill, trade secrets and confidential information of the Company.

(b)Executive further acknowledges and agrees that BGCP may condition the receipt of any award of Partnership units hereunder upon: (i) the execution of a release of claims against the BGCP Group, substantially in the form that Partners are required to execute pursuant to Section 12.02(k) of the BGC Partnership Agreement; and (ii) the receipt of a certification, in form and substance reasonably acceptable to BGCP and consistent with any such certification required of any other Partner pursuant to Section 12.02(c)(vii) of the BGC Partnership Agreement, that such Person has not engaged in any of the activities described in Section 5, and that Executive shall be liable for all damages (including any payments received in respect of any BGC Partnership Award under the BGC Partnership Agreement made as a result of a false certification) resulting from the inaccuracy of any such certification, consistent with the provisions of Section 12.02(c)(vii) of the BGC Partnership Agreement. Executive further agrees that execution of this Agreement shall be deemed to constitute execution of the BGC Partnership Agreement as a Partner, effective as of the Determination Date.

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Section 8.Remedies.

Notwithstanding Section 10 below, the Parties agree that any remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by Executive of any of the Covenants (to be determined in the good faith determination of the then-Chairman of BGCP (or his designee)), at any time during the Restricted Period, BGCP and its Affiliates shall be entitled to an injunction restraining Executive from breaching or otherwise violating any provision of this Agreement without proof of special damages or the posting of any bond or other security, as well as all other legal and equitable remedies. Executive agrees not to oppose the granting of injunctive or other equitable relief as a remedy and agrees to waive any requirement for the securing or posting of any bond in connection with such remedy. Nothing herein contained shall be construed as prohibiting BGCP or any of its Affiliates from pursuing any other remedies available to it for such breach or threatened breach during the Restricted Period, including, without limitation, the immediate termination of all of Executive’s rights under this Agreement (including the forfeiture by Executive of any REUs and PREUs delivered to Executive under this Agreement or the BGC Partnership Agreement and immediate cessation of Executive as a Partner without consideration in respect thereof), the immediate return by Executive to BGCP of any REUs and PREUs (or the value thereof) or any other BGC Partnership Award or cash or BGCP Shares transferred to Executive under this Agreement or any BGCP equity incentive plan, and the recovery of damages from Executive generally. In addition, if Executive is determined to have breached any of the Covenants at any time during the Restricted Period, Executive shall indemnify BGCP and its Affiliates for and pay any resulting attorney’s fees and expenses of BGGP and its Affiliates incurred to enforce any of the terms of this Agreement.

Executive’s eligibility to receive any applicable merger consideration in connection with the Back-End Mergers described in Section 5.16 of the Tender Offer Agreement (the “Back-End Merger Consideration”) shall be governed by the Tender Offer Agreement and any related agreements and provisions referenced therein but not this Agreement per se, provided that, for avoidance of doubt, (i) if Executive breaches any of the Covenants prior to his receipt of the Back-End Merger Consideration to be paid to him pursuant to Section 5.16 of the Tender Offer Agreement, then neither BGCP nor any of its Affiliates shall have any obligation to pay the Back-End Merger Consideration to Executive, and (ii) if Executive was in full compliance with all of the Covenants, and otherwise eligible to receive the Back-End Merger Consideration, at the time the Back-End Merger Consideration was paid to him, but later breaches any of the Covenants, then BGCP and its Affiliates shall be entitled to such equitable and/or legal relief available to it/them for such breach, but shall not have the right to rescind the Back-End Merger Consideration.

Section 9.Non-Exclusivity.

The rights and remedies of BGCP and its Affiliates hereunder are not exclusive of or limited by any other rights or remedies that BGCP and its Affiliates may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative (and not alternative). Without limiting the generality of the foregoing, the rights and remedies of BGCP and its Affiliates hereunder, and the obligations and liabilities of Executive hereunder, are in addition to their respective rights, remedies, obligations and liabilities under the law of unfair competition, misappropriation of trade secrets and the like.

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This Agreement does not limit Executive’s obligations or the rights of BGCP or any of its Affiliates under the terms of any other agreement between Executive and BGCP or any of its Affiliates.

Section 10.Dispute Resolution.

This Agreement will be governed by and construed in accordance with the laws of the State of New York without giving effect to the principles of conflicts of laws thereof.  Except as otherwise required by the rules and regulations of FINRA, and subject to the provisions of Section 8 hereof, any disputes, differences or controversies arising under this Agreement shall be heard solely in, and resolved by, a judge either in a court sitting in a New York County, City, or State, or in the county in which Executive’s assigned Company office is located, if such office location is outside New York State. Wherever the dispute is resolved, Executive, the Company and BGC agree and understand that any trial will not be before a jury, and Executive, the Company and BGC waive any jury trial right.  Executive hereby irrevocably consents to the service of process in any such action or proceeding by mailing copies thereof by registered U.S. mail, postage prepaid, to the address set forth above.  To the maximum extent permitted by law, Executive, the Company and BGC waive any right to seek any damages that are not solely compensatory in nature. This waiver includes waiver of damages that are not solely compensatory, whether special, exemplary, multiple (e.g., treble), or punitive damages or penalties, or amounts in the nature of special, exemplary, multiple, or punitive damages or penalties or by any other name. Executive, the Company and BGC make this waiver regardless of the nature or form of the claim or grievance. If the law does not permit this waiver for a particular claim, then the law overrides this waiver, but only for a claim or damage where the law requires overriding this waiver.  If an applicable statute or another agreement discusses awards of attorneys’ fees, such statute or agreement will apply.  In addition, whether or not there is any such applicable statute, at any point either party may in writing offer to pay the other a stated amount of money, or partnership interests or stock in a Company or BGC entity (the “Offeror”) to resolve the matter in return for a general release of the Offeror. The other party (“Offeree”) will have fourteen (14) calendar days from the day after the offer is sent to accept.  If the Offeree does not unconditionally accept in writing within the fourteen (14) calendar days and, thereafter, is awarded less than the amount offered, the Offeror shall be awarded its attorneys’ fees and costs and disbursements from the date of the offer.  Such amount shall be offset against any damages awarded to the Offeree, and, if greater than the damages awarded, the net deficit shall be entered as an award in favor of the Offeree.

Section 11.Entire Agreement; Enforceability; Partial Invalidity.

(a)This Agreement contains the entire agreement of the Parties with respect to the terms and conditions of Executive’s employment and supersedes any and all prior agreements and understandings between or among any of the Parties with respect to the terms and conditions of Executive’s employment, including without limitation the Disability Agreement between Executive and the Company, dated as of December 30, 2004, as amended (but excluding, for the avoidance of doubt, the DE Bonus Award Agreement and the agreement containing certain obligations, conditions and covenants set forth in Annex B to the Tender Offer Agreement to be entered into by Executive in connection with the Back-End Mergers pursuant to Section 5.16 of the Tender Offer Agreement).

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(b)The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.  In the event that a court of competent jurisdiction shall determine that any covenant set forth in this Agreement is impermissibly broad in scope, duration or geographical area, or is in the nature of a penalty, then the Parties intend that such court should limit the scope, duration or geographical area of such covenant to the extent, and only to the extent, necessary to render such covenant reasonable and enforceable, and enforce the covenant as so limited, provided that Section 6 above shall govern the Covenants contained in Section 5.

Section 12.Miscellaneous.

(a)No waiver or modification of this Agreement shall (i) be binding upon any Party unless in writing and signed by the Parties and (ii) be deemed to be a subsequent waiver or modification of the same or any other term, covenant or condition in this Agreement.

(b)This Agreement is personal to Executive and may not be assigned, in whole or in part, by Executive without the prior written consent of the Company and BGC, and any purported assignment hereof in violation of this provision shall be null and void.  This Agreement may be assigned without recourse, in whole or in part, by the Company or BGC to any of their Affiliates or to any successor in interest of the Company or BGC by merger, consolidation, reorganization or otherwise.

(c)Except as specifically provided in Section 8 above and in this Section 12(c), nothing in this Agreement, express or implied, is intended to or shall confer upon any person or entity, other than the Parties, any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement; provided, however, that the Parties acknowledge and agree that each of the Company’s and BGC’s Affiliates, any successor in interest to the Company, BGC or any of their Affiliates by merger, consolidation, reorganization, or otherwise, and each of their respective successors and permitted assigns are intended third party beneficiaries of this Agreement entitled to enforce the terms and conditions of this Agreement and entitled to all legal and equitable remedies in the event Executive breaches or threatens to breach, or otherwise violates, any of the Covenants or other provisions of this Agreement. For avoidance of doubt, for purposes of this Section 12(c), successors and permitted assigns shall be limited to those successors and permitted assigns provided for in Section 12(b) of this Agreement.

(d)This Agreement may be executed in various counterparts, including by facsimile or .pdf, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(e)The provisions of Sections 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 of this Agreement will survive the termination of Executive’s employment in accordance with their terms.

(f)This Agreement is intended to comply with Code Section 409A and the interpretative guidance thereunder, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions, and will be administered, construed, and interpreted in accordance with such intent. 

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If any provision of this Agreement needs to be revised to satisfy the requirements of Code Section 409A, then such provision shall be modified or restricted to the extent and in the manner necessary to be in compliance with such requirements of the Code and any such modification will attempt to maintain the same economic results as were intended under this Agreement.  Each payment under this Agreement is intended to be treated as one of a series of separate payment for purposes of Code Section 409A and Treas. Reg. §1.409A-2(b)(2)(iii) (or any similar or successor provisions).  Notwithstanding anything in this Agreement to the contrary, to the extent Executive is considered a “specified employee” (as defined in Code Section 409A and Treas. Reg. §1.409A-1(c)(i) or any similar or successor provision) and would be entitled to a payment during the six (6)-month period beginning on Executive’s date of termination that is not otherwise excluded under Code Section 409A under the exception for short-term deferrals, separation pay arrangements, reimbursements, in-kind distributions, or any otherwise applicable exception, the payment will not be made to Executive until the earlier of the six (6)-month anniversary of Executive’s date of termination or Executive’s death and will be accumulated and paid on the first day of the seventh month following the date of termination.  The Company and BGC do not guarantee that any payments made in connection with the Agreement will satisfy all applicable provisions of Code Section 409A.

Section 13.Notices.

All notices pursuant to this Agreement shall be in writing and delivered by (a) hand, (b) overnight delivery, or (c) certified or registered mail, return receipt requested, postage prepaid to the address set forth below. All notices shall be effective (i) upon receipt when delivered by hand, (ii) on the next business day when delivered by overnight delivery, or (iii) on the third business day after the day on which mailed by certified or registered mail.

Any notice to the Company or BGC hereunder will be sent to:

Stephen M. Merkel, Esq.

Executive Managing Director

and Chief Legal Officer

BGC Partners, L.P.

499 Park Avenue

New York, New York 10022

Tel: (212) 829-4829

Fax: (212) 829-4708

Email:  smerkel@bgcpartners.com

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Any notice to Executive hereunder will be sent to the address then on file for Executive with the Company and:

Jeffrey R. Poss, Esq.

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Tel: (212) 728-8536

Fax: (212) 728-9536

Email: jposs@willkie.com

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.

GFI GROUP INC.
By:
	Name:
	Title:
BGC PARTNERS, L.P.
By:
	Name:
	Title:
MICHAEL GOOCH

[Signature page to Employment Agreement, dated as of April 15, 2015, by and between
 GFI Group Inc., BGC Partners, L.P. and Michael Gooch]

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EX-10.3

Exhibit 10.3

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”), dated as of April 30, 2015 (the “Effective Date”), is entered into by and between BGC Partners, L.P., a Delaware limited partnership (“BGC”), GFI Group Inc., a Delaware corporation (together with its successors and assigns, “GFI” or the “Company”), and Colin Heffron, an individual (“Executive”) (BGC, GFI and Executive collectively referred to herein as the “Parties”).

WHEREAS, Executive is currently employed by the Company pursuant to an Employment Agreement dated as of April 30, 2007, as amended by that certain Amendment No. 1 to Employment Agreement dated December 31, 2008 (as amended, the “Prior Agreement”); and

WHEREAS, BGC and the Company have entered into a Tender Offer Agreement, dated as of February 19, 2015 (the “Tender Offer Agreement”) pursuant to which the parties thereto have agreed to make certain representations, warranties, covenants and agreements in connection with BGC’s cash tender offer to purchase all of the outstanding shares of common stock of the Company (the “Offer”); and

WHEREAS, the Parties desire to enter into this Agreement to set out the terms and conditions for the continued employment relationship of Executive with the Company after the acceptance for payment of shares of the Company’s common stock pursuant to and subject to the terms of the Offer upon expiration of the Offer (the “Offer Closing”); and

WHEREAS, the Parties agree that, as of the Effective Date (as defined below), this Agreement shall supersede and replace the Prior Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Parties hereto agree as follows:

1.Nature of Employment.

(a)The Company hereby agrees to continue to employ Executive as a full-time employee in the position of CEO of the GFI Brand (as defined below) and Executive accepts such continued employment, on the terms and conditions set forth in this Agreement, for the Term (as defined in Section 2 below) of this Agreement.  Throughout the Term, Executive will be responsible for globally managing the GFI Brand and such senior executives globally as directed or designated, respectively, by Shaun Lynn (or his successor or designee) with a focus on the business of the GFI Brand, will ultimately report to Shaun Lynn (or his successor or designee), and will perform and discharge well and faithfully such duties and functions as may be assigned to him from time to time by Shaun Lynn (or his successor or designee) in his discretion in connection with the conduct of the Company’s and BGC’s business, including with respect to any Affiliate (as defined below).  Executive shall have such authority as granted to him by the then-Chairman of BGC (or his designee). If Executive is elected or appointed an officer or director of the Company or any of its Affiliates during the period of Executive’s employment with the Company, Executive will serve in such capacity without additional compensation.  For purposes of this Agreement, “GFI Brand” means, as applicable, (i) the inter-dealer brokerage business, as conducted by the Company and its subsidiaries (the “IDB Business”), or (ii) the IDB Business, operating as a GFI-branded division of either BGC or an Affiliate of BGC.

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(b)From the Effective Date through the closing of the Back-End Mergers pursuant to Section 5.16 of the Tender Offer Agreement, Executive agrees to serve as a director of the Company, provided that if the Election (as defined in the Tender Offer Agreement) is not made by the expiration of the Election Period (as defined in the Tender Offer Agreement), Executive shall immediately resign his position as director of the Company.

(c)During the period of Executive’s employment with the Company, Executive:  (i) will devote 100% of his employment energies, interests, abilities and time to the performance of his duties and shall not, without the written consent of Shaun Lynn (or his successor or designee), render to others any service of any kind for compensation; (ii) will not render services to any business activity that is directly or indirectly competitive with any business conducted by the Company, BGC or any of their respective Affiliates; (iii) will observe and carry out such rules, regulations, policies, directions and restrictions as may be established from time to time by the Company, including but not limited to the policies, practices and procedures of the Company as in effect from time to time; (iv) will promote the best interests of the Company, BGC and their respective Affiliates, and will not, either during or outside of normal business hours, directly or indirectly, engage in any activity inimical to such best interests; and (v) will do such traveling as may be reasonably required in connection with the performance of such duties and responsibilities consistent with such traveling requirements prior to the execution of this Agreement and/or as appropriate as CEO of the GFI Brand.

(d)Executive may serve on corporate, civic and/or charitable boards with the consent of Shaun Lynn (or his successor or designee), provided that Shaun Lynn (or his successor or designee) may require Executive to resign any or all such board seats if he reasonably believes such board participation conflicts with Executive’s role with the Company, BGC or any of their respective Affiliates or is otherwise too time-consuming or distracting to Executive.

(e)Executive acknowledges that this Agreement contains restrictive covenants, and Executive agrees to comply with these provisions.  Executive understands that entering into and complying with these provisions is a condition to Executive’s continued employment and that failure to comply with the restrictive covenants may result in termination for Cause under this Agreement pursuant to Section 10 and in other harm and damages to the Company, BGC and any of their respective Affiliates.

2.Term of Employment.

The term of this Agreement shall commence on the Effective Date and shall continue through October 1, 2018 (or such later date as may be mutually agreed by the Parties in writing, which writing must be signed by an authorized officer of the Company and BGC), subject to reduction to the extent earlier terminated as specified in Section 10 below (such period referred to herein as the “Term”).

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3.Compensation and Benefits.

For the full and faithful performance of the services to be rendered by Executive and in consideration of Executive’s obligations under this Agreement, provided Executive is not in breach of this Agreement, the Company shall pay to Executive and Executive shall be entitled to receive:

(a)Base Compensation.  As compensation for his services to be rendered hereunder, during the Term and retroactive to April 1, 2015, the Company shall pay to Executive a base salary at the rate of $1,000,000 per annum (the “Base Salary”), prorated for any partial year of service, which shall be payable in periodic installments in accordance with the standard payroll practices of the Company in effect from time to time, provided, however, that if, by reason of disability, Executive is incapable of performing his normal duties and responsibilities hereunder, with or without a reasonable accommodation, for a period in excess of any ninety (90) calendar days during any twelve (12) month period, then the Company shall have no obligation to pay Executive the Base Salary for the period, in excess of such ninety (90) calendar days, during which Executive is incapable of performing his normal duties and responsibilities hereunder. The Company will provide Executive with a catch-up payment in an amount equal to the difference between (i) the Base Salary payments Executive would have received had he been paid at the rate set forth in this Section 3(a) during the period commencing on April 1, 2015 and ending on the Effective Date and (ii) the actual salary payments made to Executive during such period, payable in a lump sum on a regular payroll date as soon as practicable following the Effective Date.

(b)Bonus.  From the Effective Date through October 1, 2018, the Company shall pay Executive a bonus of $1,500,000 (the “Bonus”) per fiscal year of BGC Partners, Inc. (“BGCP”), prorated for any partial fiscal year of service, which Bonus shall (to the extent that, at the time of payment of such Bonus, Executive could reasonably be expected to be a “covered employee” as defined under Section 162(m) of the Code) be determined and payable under any then applicable incentive plan in a manner intended to cause such Bonus to constitute “performance-based compensation” within the meaning of Section 162(m) of the Code. Any Bonus payment as provided in the preceding sentence shall be paid (i) entirely in cash if Distributable Earnings (as defined in the Tender Offer Agreement) for the corresponding Earnings Period (as defined in the Tender Offer Agreement) is less than $45,000,000, or (ii) two-thirds in cash and one-third in the form of partnership equity (such one-third, the “Annual Equity Award”) if Distributable Earnings  for the corresponding Earnings Period is equal to or greater than $45,000,000.  Each Annual Equity Award, if any, will be made in the form of a combination of REUs and PREUs having a combined aggregate Post-Termination Amount (as defined in the Agreement of Limited Partnership of BGC Holdings, L.P. (“BGCHLP”) amended and restated as of March 31, 2008, as amended from time to time (the “BGC Partnership Agreement”)) equal to $500,000 on an annualized basis (which will be prorated in the event of any partial fiscal year), as determined and administered in accordance with the then-current practices of BGCP. The ratio of REUs to PREUs in each award shall be consistent with the then-current ratio in which equity units are distributed to BGC’s senior executives based in the U.S.  Each Annual Equity Award, if any, shall be fully vested on issuance.  Such Annual Equity Awards, if any, shall only be forfeitable if Executive violates the Covenants (as defined below). Receipt by Executive of each Annual Equity Award (if any) shall be subject to the terms of the BGC Partnership Agreement and the BGCHLP Participation Plan, as amended from time to time, and any applicable award agreement thereunder, which shall be generally consistent with the terms of regular compensatory awards of the same partnership unit types, except as specifically provided in this Section 3(b).

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Notwithstanding anything to the contrary above, if, by reason of disability, Executive is incapable of performing his normal duties and responsibilities hereunder, with or without a reasonable accommodation, for a period in excess of any ninety (90) calendar days during any twelve (12) month period, then the Company may reduce the Bonus pro-rata based on the period, in excess of such ninety (90) calendar days, during which Executive is incapable of performing his normal duties and responsibilities hereunder.

(c)Discretionary Bonus.  The Company may pay Executive a discretionary bonus, in such an amount, on such terms and at such time as may be determined by the Company in its sole and absolute discretion (the “Discretionary Bonus”), it being specifically understood that the Discretionary Bonus, if any, shall be paid in non-cash and/or such other form of equity as determined by the Company in its sole and absolute discretion, provided that if Executive’s total aggregate compensation for any given year (including his Base Salary, Bonus and Discretionary Bonus) is greater than $2,500,000 in the aggregate, Executive will receive 25% of his total annual compensation in the form of equity awards in BGC or any of its Affiliates (except in such cases where such percentage needs to be less than 25% so that the total annual compensation is the same but Executive still receives at least $2,000,000 of Executive’s total annual compensation in cash). For avoidance of doubt, any DE Bonus paid to Executive pursuant to the Non-Competition and DE Bonus Award Agreement to be entered into between Executive and BGC Partners, Inc. (the “DE Bonus Award Agreement”) and any consideration paid to Executive in connection with the Back-End Mergers pursuant to Section 5.16 of the Tender Offer Agreement shall not be considered for purposes of determining whether Executive’s total aggregate annual compensation is greater than $2,500,000 for purposes of this Section 3(c).

(d)Fringe Benefits.  During the Term, the Company shall also make available to Executive the following benefits and perquisites: (i) payment for the costs of Executive’s dedicated car and driver on terms substantially similar to those in place on the date hereof, (ii) access to use of the Company’s then-current corporate apartment in New York, New York that may be made available to other GFI executives from time to time, (iii) continued use of his current or another suitable office located in New York, New York, and (iv) a full-time personal secretary, in each case consistent with his current arrangements, provided, however, that the Company shall not have to pay costs of Executive’s dedicated car and driver in excess of $135,000 in any calendar year of the Term, and further provided that if, by reason of disability, Executive is incapable of performing his normal duties and responsibilities hereunder, with or without a reasonable accommodation, for a period in excess of any ninety (90) calendar days during any twelve (12) month period, then the Company shall have no obligation to provide the benefits and perquisites set forth in clauses (i) through (iv) for the period, in excess of such ninety (90) calendar days, during which Executive is incapable of performing his normal duties and responsibilities hereunder.  Executive shall further be entitled to paid vacation, holidays, personal days and sick days in accordance with the Company’s standard policies and procedures in effect from time to time; provided, however, Executive shall be entitled to four weeks of vacation per year; and further provided that nothing herein contained shall be deemed to require the Company to adopt, maintain or continue in effect any particular plan, policy or procedure.

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(e)Expenses.  During the Term, the Company shall reimburse Executive in accordance with applicable Company policy in effect from time to time, for normal, reasonable and approved out-of-pocket business expenses incurred by Executive in connection with the performance of his duties and responsibilities hereunder; provided that Executive submits documentation reasonably required by Company expense reimbursement policies and procedures in effect and as amended from time to time.

(f)Withholding.  All amounts of compensation payable to Executive under this Agreement shall be subject to, and paid after reduction for, any and all required deductions or withholdings for federal, state, local and foreign income tax withholding, Social Security, Medicare, unemployment or other similar government benefit or insurance contributions, and any other deductions or withholdings required by law or authorized by Executive.

4.Assignment of Inventions and Intellectual Property.

(a)The term “Proprietary Rights” means all trade secrets, trademarks, service marks, patents, copyrights, mask works and other intellectual property rights throughout the world.  The term “Inventions” means all Proprietary Rights, inventions, ideas, processes, formulas, source and object codes, data, programs, technology, writings, software programs, other works of authorship, know-how, discoveries, developments, designs, schematics, manuals, drawings, techniques, employee suggestions, development tools, computer printouts, or any claim of rights (or any related improvements or modifications to the foregoing).

(b)Subject to Sections 4(c) and 4(d), Executive hereby assigns and agrees to assign in the future (when any such Invention or Proprietary Right is first reduced to practice or first fixed in a tangible medium, as applicable) to the Company, BGC or any of their respective Affiliates, as applicable, all right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by Executive, either alone or jointly with others, during or at any time after the period of employment with the Company, which (i) relate to methods, designs, brokerage or other products, trading systems and screens or any other processes which relate to or pertain to the actual or anticipated business, functions, operations, research or development of the Company, BGC or any of their respective Affiliates, (ii) arise (wholly or partly) from Executive’s efforts during any time that Executive is employed by the Company or utilizing any physical or intellectual property owned by the Company, BGC or any of their respective Affiliates, or (iii) is based on any information or knowledge gained by Executive through his employment with the Company.  Inventions assigned to the Company, or to a third party as directed by the Company pursuant to this Section, are hereinafter referred to as “Company Inventions.”

(c)During Executive’s period of employment, and for twelve (12) months thereafter, Executive will promptly disclose to the Company, fully and in writing, all Inventions authored, conceived or reduced to practice by Executive, either alone or jointly with others.  In addition, Executive will promptly disclose to the Company all patent applications filed by Executive or on his behalf within twelve (12) months after termination of employment.

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(d)Executive also agrees to assign all right, title and interest in and to any particular Company Invention to a third party as directed by the Company.

(e)Executive acknowledges that all original works of authorship which are made by Executive (solely or jointly with others) within the scope of his employment with the Company and which may be protected by copyright are “works made for hire”, pursuant to United States Copyright Act (17 U.S.C. Section 101) and are the property of the Company, BGC or any of their respective Affiliates, as applicable, without limitation which shall own all rights of copyright therein including the sole and exclusive right to reproduce such works in multiple copies of distribution or sale to the public and to create and exploit derivative works based thereon.

(f)Executive will execute, verify and deliver assignments of such Proprietary Rights to the Company or its designee.  Executive’s obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries will continue beyond the termination of employment. To the extent the Company requests Executive’s assistance after the termination of his employment, the Company shall, to the extent possible, reasonably consider Executive’s material pre-exiting scheduling commitments in connection with such request.

5.Restrictive Covenants.

(a)General. Executive covenants and agrees that he shall not, at all times while employed by the Company, BGC, BGCP or any of their Affiliates (collectively, the “BGCP Group”) and for a period immediately following the termination of Executive’s employment for any reason lasting for the longer of seven (7) years after the termination of Executive’s employment or through October 1, 2025 (collectively, the “Restricted Period”), directly or indirectly, alone or by action in concert with others (including with or through any Representative):

(i)solicit, induce, or influence, or attempt to solicit, induce or influence, any partner, employee or consultant of BGCP or any of its Affiliates (which, for avoidance of doubt, include, without limitation, the Company and any Affiliates thereof), or any member of the Cantor Group (as defined herein) to terminate their employment or other business arrangements with BGCP or any of its Affiliates or any member of the Cantor Group, or to engage in any Competing Business or hire, employ, engage (including as a consultant or partner) or otherwise enter into a Competing Business with any such Person;

(ii)solicit any of the customers of BGCP or any of its Affiliates, or any member of the Cantor Group (or any of their employees), induce such customers or their employees to reduce their volume of business with, terminate their relationship with or otherwise adversely affect their relationship with, BGCP or any of its Affiliates or any member of the Cantor Group;

(iii)do business (if such business would constitute a Competing Business) with any person who was a customer of BGCP or any of its Affiliates or any member of the Cantor Group during the twelve (12) month period prior to the applicable date during the Restricted Period on which a determination of whether any such activity constitutes a Competing Business is being made for purposes of this Agreement;

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(iv)directly or indirectly engage in, represent in any way, or be connected with, any Competing Business, competing with the business of BGCP or any of its Affiliates or any member of the Cantor Group, whether such engagement shall be as an officer, director, owner, employee, partner, consultant, Affiliate, investor, creditor or other participant in any Competing Business;

(v)assist others in engaging in any Competing Business in the manner described in the foregoing clause (iv);

(vi)take any action that results directly or indirectly in revenues or other benefit for Executive or any third party that is or could be considered to be engaged in any activity of the nature set forth in clauses (ii) through (v) above;

(vii)make  or  participate  in  the  making  of  (including  through  any  of Executive’s Representatives) any comments to the media (print, broadcast, electronic or otherwise) that are disparaging regarding (A) BGCP, any member of the Cantor Group or any of their Affiliates, or (B) the senior executive officers of  BGCP, any member of the Cantor Group or any of their Affiliates, or are otherwise contrary to the interests of BGCP, any member of the Cantor Group or any of their Affiliates, as determined by the General Partner in its sole and absolute discretion;

(viii)breach Executive’s duty of loyalty to the Partnership (as defined below);

(ix)take advantage of, or provide another person with the opportunity to take advantage of, a “corporate opportunity” (as such term would apply to the Partnership if it were a corporation) including opportunities related to intellectual property, which for this purpose shall require granting BGC Partners, LLC (the “General Partner”) a right of first refusal for the General Partner to acquire any assets, stock or other ownership interest in a business being sold by Executive or any Affiliate of Executive, if an investment in such business would constitute a “corporate opportunity” (as such term would apply to the Partnership if it were a corporation), that has not been presented to and rejected by the General Partner or that the General Partner rejects but reserves for possible further action by the General Partner in writing, unless otherwise consented to by the General Partner in writing in its sole and absolute discretion; or

(x)otherwise take any action to harm, that harms, or that reasonably could be expected to harm BGCP or any of its Affiliates, or any member of the Cantor Group, including, without limitation, any breach of the provisions of Section 5(c) below.

(b)Notwithstanding the foregoing, nothing in this Section 5 shall prohibit Executive from acquiring or owning, in accordance with BGCP’s policies and procedures regarding personal securities transactions (for so long as Executive is an employee of BGCP or one of its Affiliates), less than one percent (1%) of the outstanding securities of any class of any corporation that are listed on a national securities exchange or traded in the over-the-counter market. 

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The determination of whether Executive breaches any of the conditions, obligations and covenants (the “Covenants”) set forth in Section 5(a) or Section 5(c) shall be made in good faith by the then-Chairman of BGCP (or his designee).

(c)Confidentiality.

(i)In addition to any other obligations set forth in this Agreement, Executive recognizes that confidential information has been and will be disclosed to such Executive by the Partnership (as defined herein) and members of the BGCP Group (including but not limited to the Company and the GFI Brand). Executive expressly agrees, at all times on and after the date of this Agreement, whether or not at the time a member of the Partnership (a “Partner”) or providing services to the Partnership, any member of the BGCP Group (including, without limitation, as an employee of the Company and the GFI Brand), to (A) maintain the confidentiality of, and not disclose to any Person without the prior written consent of BGCP, any financial, legal or other advisor to BGCP, any information relating to the business, clients, affairs or financial structure, position or results of the Partnership or its Affiliates (including the Company and the GFI Brand) or any dispute that shall not be generally known to the public or the securities industry and (B) not to use such confidential information other than for the purpose of evaluating such Executive’s investment in the Partnership, if applicable, or in connection with the discharge of any duties to the Partnership or any member of the BGCP Group (including the Company and the GFI Brand) Executive may have in such Executive’s capacity as an officer, director, employee or agent of any member of the BGCP Group (including the Company and the GFI Brand).

(ii)In the event that any third party requests information from Executive (whether during the period in which Executive is a Partner or otherwise during the Restricted Period), regarding any matter related to Executive’s employment by any member of the BGCP Group (including the Company and the GFI Brand) or Executive’s role as a Partner, as the case may be, Executive will promptly contact and notify the General Counsel of BGCP before responding to such requests for information, so that BGCP may take appropriate action to protect the Partnership’s and the BGCP Group’s interests. However, Executive shall not have any obligation to contact and notify the General Counsel of BGCP prior to any such timely discussions between Executive and his or her legal counsel or his or her certified public accountant.

(iii)In the event that Executive is subpoenaed, or asked, to testify as a witness or to produce documents in any legal or administrative or other proceeding related to the Partnership or any member of the BGCP Group (whether during the period in which Executive is a Partner or otherwise during the Restricted Period), or otherwise required by law to disclose confidential information, Executive will promptly notify the Partnership and BGCP of such subpoena or request and meet with Partnership Representatives for a reasonable period of time prior to any such appearance or production.

(iv)So long as Executive shall have complied with his or her obligations under clauses (ii) and (iii) of Section 5(c), if, after a reasonable period after Executive notifies the Partnership and BGCP of any request or subpoena, the Partnership and BGCP are not able to obtain a protective order or other appropriate protection of such information, then Executive may make such disclosures, notwithstanding any other restrictions contained in this Agreement.

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(d)Definitions.  Defined terms used but not otherwise defined in this Section 5 or otherwise in this Agreement shall have the meanings given to them in the Tender Offer Agreement.  For purposes of this Agreement, the following terms shall have the following meanings:

“Affiliate” means, with respect to any Person, at the time of determination, another Person, whether now existing or hereafter arising, that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether though the ownership of voting securities, by contact, as trustee or executor or otherwise.

“Cantor Group” means, collectively, Cantor Fitzgerald, L.P., a Delaware limited partnership, its subsidiaries, and the limited and general partnerships, corporations or other entities owned, controlled by or under common control with BGCP or BGC Holdings, L.P., a Delaware limited partnership (the “Partnership”).

“Competing Business” means an activity that (w) involves the development and operations of voice, hybrid or electronic trading systems, (x) involves the conduct of the wholesale or institutional brokerage business, (y) consists of marketing, manipulating or distributing financial price or other information of a type supplied by BGCP or any of its Affiliates or any member of the Cantor Group to information distribution services or (z) competes with any other business conducted by BGCP or any of its Affiliates, or any member of the Cantor Group if such business was first engaged in by BGCP or any of its Affiliates or any member of the Cantor Group or BGCP or any of its Affiliates or any member of the Cantor Group took substantial steps in anticipation of commencing such business and prior to the applicable date during the Restricted Period that a determination of whether any such activity constitutes a Competing Business is being made for purposes of this Agreement; including, for the avoidance of doubt, on and after the Offer Closing Date, any business activity, wholly or partly, in the same or similar business operated by (including providing services or products similar to or that compete with the products and/or services offered or contemplated by) the Company and its Affiliates (including the GFI Brand), or any such business which is contemplated by the Company or its Affiliates for which the Company or any Affiliate has taken preparatory steps at the later of the Determination Date or the date Executive ceases to provide services to the BGCP Group (including without limitation the GFI Brand).

“Person” means an individual, corporation, limited liability company, company, body corporate, partnership (whether or not having separate legal personality), association, trust, unincorporated organization, other entity or group (as defined in the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Representatives” means, with respect to any Person, the Affiliates, directors, officers, employees, general partners, agents, accountants, managing member, employees, counsel and other advisors and representatives of such Person, including immediate family members.

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6.Severability of Covenants.

The Covenants contained in Section 5 shall be construed as a series of separate covenants. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then the Parties agree that such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of Section 5 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then the Parties agree that such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable law.

7.Executive Acknowledgements and Further Agreements.

(a)Executive acknowledges that (i) Executive has a substantial interest in the Company and is a key employee of the Company; (ii) the goodwill associated with the existing business, customers and assets of the Company prior to the Offer Closing is an integral component of the value of the Company to BGCP and is reflected in the consideration payable in connection with the Offer Closing; and (iii) Executive’s agreement as set forth herein is necessary to preserve the value of the Company for BGCP following the Offer Closing. Executive also acknowledges and agrees that the provisions of this Agreement, specifically including of Section 5, are reasonable in scope and duration and are necessary to protect the interests of BGCP and the Company, including, without limitation, because, among other things: (A) the Company and BGC are engaged in a highly competitive industry; (B) Executive has had unique access to the trade secrets and know-how of the Company, including, without limitation, the plans and strategy (and, in particular, the competitive strategy) of the GFI Brand; and (C) Executive believes that this Agreement provides no more protection than is reasonably necessary to protect BGCP’s legitimate interest in the goodwill, trade secrets and confidential information of the Company.

(b)Executive further acknowledges and agrees that BGCP may condition the receipt of any award of Partnership units upon: (i) the execution of a release of claims against the BGCP Group, substantially in the form that Partners are required to execute pursuant to Section 12.02(k) of the BGC Partnership Agreement; and (ii) the receipt of a certification, in form and substance reasonably acceptable to BGCP and consistent with any such certification required of any other Partner pursuant to Section 12.02(c)(vii) of the BGC Partnership Agreement, that such Person has not engaged in any of the activities described in Section 5, and that Executive shall be liable for all damages (including any payments received in respect of any BGC Partnership Award under the BGC Partnership Agreement made as a result of a false certification) resulting from the inaccuracy of any such certification, consistent with the provisions of Section 12.02(c)(vii) of the BGC Partnership Agreement. Executive further agrees that execution of this Agreement shall be deemed to constitute execution of the BGC Partnership Agreement as a Partner, effective as of the Determination Date.

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8.Remedies.

Notwithstanding Section 17(d) below, the Parties agree that any remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by Executive of any of the Covenants (to be determined in the good faith determination of the then-Chairman of BGCP (or his designee)), at any time during the Restricted Period, BGCP and its Affiliates shall be entitled to an injunction restraining Executive from breaching or otherwise violating any provision of this Agreement without proof of special damages or the posting of any bond or other security, as well as all other legal and equitable remedies. Executive agrees not to oppose the granting of injunctive or other equitable relief as a remedy and agrees to waive any requirement for the securing or posting of any bond in connection with such remedy. Nothing herein contained shall be construed as prohibiting BGCP or any of its Affiliates from pursuing any other remedies available to it for such breach or threatened breach during the Restricted Period, including, without limitation, the immediate termination of all of Executive’s rights under this Agreement (including the forfeiture by Executive of any REUs and PREUs delivered to Executive under this Agreement or the BGC Partnership Agreement and immediate cessation of Executive as a Partner without consideration in respect thereof), the immediate return by Executive to BGCP of any REUs and PREUs (or the value thereof) or any other BGC Partnership Award or cash or BGCP Shares transferred to Executive under this Agreement or any BGCP equity incentive plan, and the recovery of damages from Executive generally. In addition, if Executive is determined to have breached any of the Covenants at any time during the Restricted Period, Executive shall indemnify BGCP and its Affiliates for and pay any resulting attorney’s fees and expenses of BGGP and its Affiliates incurred to enforce any of the terms of this Agreement.

Executive’s eligibility to receive any applicable merger consideration in connection with the Back-End Mergers described in Section 5.16 of the Tender Offer Agreement (the “Back-End Merger Consideration”) shall be governed by the Tender Offer Agreement and any related agreements and provisions referenced therein but not this Agreement per se, provided that, for avoidance of doubt, (i) if Executive breaches any of the Covenants prior to his receipt of the Back-End Merger Consideration to be paid to him pursuant to Section 5.16 of the Tender Offer Agreement, then neither BGCP nor any of its Affiliates shall have any obligation to pay the Back-End Merger Consideration to Executive, and (ii) if Executive was in full compliance with all of the Covenants, and otherwise eligible to receive the Back-End Merger Consideration, at the time the Back-End Merger Consideration was paid to him, but later breaches any of the Covenants, then BGCP and its Affiliates shall be entitled to such equitable and/or legal relief available to it/them for such breach, but shall not have the right to rescind the Back-End Merger Consideration.

9.Non-Exclusivity.

The rights and remedies of BGCP and its Affiliates hereunder are not exclusive of or limited by any other rights or remedies that BGCP and its Affiliates may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative (and not alternative). Without limiting the generality of the foregoing, the rights and remedies of BGCP and its Affiliates hereunder, and the obligations and liabilities of Executive hereunder, are in addition to their respective rights, remedies, obligations and liabilities under the law of unfair competition, misappropriation of trade secrets and the like.

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This Agreement does not limit Executive’s obligations or the rights of BGCP or any of its Affiliates under the terms of any other agreement between Executive and BGCP or any of its Affiliates.

10.Termination of Employment.

(a)The Term and Executive’s employment (i) may be terminated by the Company at any time with Cause in accordance with Section 10(d) or without Cause or due to Executive’s Disability (as defined herein), and (ii) shall automatically terminate upon Executive’s death.  Upon any termination of Executive’s employment, Executive agrees to automatically resign, and is deemed to have automatically resigned from, all positions with the Company, BGC and any of their respective Affiliates, including as a member of any applicable board of directors.

(b)In the event the Term and Executive’s employment is terminated prior to October 1, 2018 by the Company without Cause as determined by the then-Chairman of BGCP (or his designee), (i) the Company shall continue to pay Executive the Base Salary and Bonus, in each case through October 1, 2018, at the same time as the Base Salary and Bonus would have been paid had the Company not terminated Executive without Cause, provided that such payments shall not commence until the conditions in Section 10(f) have been satisfied and the first payment following such conditions having been satisfied shall include all unpaid amounts that would otherwise have been paid to Executive during the period beginning on the termination of Executive’s employment and ending on the date of the first payment, and (ii) Executive shall be entitled to receive a lump sum severance payment of $4,800,000 (the “Severance Payment”), payable within thirty (30) days following such termination of employment or, if later, such later date as set forth in Section 10(f), further provided that, in each case, if Executive violates the Covenants (y) prior to payment of any amounts (or any portion thereof) pursuant to this Section 10(b), then Executive will forfeit all right to receive any further amounts pursuant to this Section 10(b), and (z) after the payment of any amounts (or any portion thereof) pursuant to this Section 10(b), then Executive shall be obligated to repay an amount equal to the sum of (A) the net after-tax amount of all amounts paid to Executive pursuant to this Section 10(b) and (B) the amount of the potential tax benefit to Executive as a result of such repayment, if any (it being understood that Executive shall be obligated to claim a deduction in respect of such repayment to the extent he is permitted to do so under applicable tax laws). Executive acknowledges that the payments set forth in this Section 10(b) are additional consideration for his compliance with the Covenants.

(c)In the event the Term and Executive’s employment is terminated after October 1, 2018 either by Executive for any reason or by the Company or BGC without Cause, as determined by the then-Chairman of BGCP (or his designee), Executive shall be entitled to receive the Severance Payment, payable within thirty (30) days following such termination of employment or, if later, such later date as set forth in Section 10(f), provided, however, that if Executive violates the Covenants (i) prior to payment of the Severance Payment, then Executive will forfeit all right to receive the Severance Payment, or (ii) after the payment of the Severance Payment, then Executive shall be obligated to repay an amount equal to the sum of (x) the net after-tax amount of the Severance Payment and (y) the amount of the potential tax benefit to Executive as a result of such repayment, if any (it being understood that Executive shall be obligated to claim a deduction in respect of such repayment to the extent he is permitted to do so under applicable tax laws). Executive acknowledges that the Severance Payment above is additional consideration for his compliance with the Covenants.

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(d)In the event the Term and Executive’s employment is terminated by the Company for Cause, (i) the Company shall pay Executive the amount of Executive’s accrued but unpaid Base Salary and expenses with respect to the period prior to the date of termination of Executive’s employment, to the extent not previously paid, and (ii) all unvested restricted stock units of GFI, and, if Executive has breached any of the Covenants set forth in Section 5 above or any restrictive covenants set forth in any other agreement with the Company, BGC, or any of their Affiliates, REUs, PREUs and any other equity will terminate and be forfeited by Executive immediately upon termination, and (iii) the Company shall have no other or further obligation to Executive hereunder, including without limitation any obligation to make severance payments (including, without limitation, the Severance Payment) or payments in respect of any Bonus, Annual Equity Award (if any) or otherwise.

(e)In the event that Executive’s employment is terminated by reason of Executive’s death or Disability, the Company shall pay Executive (or his personal representative as the case may be): (i) the amount of Executive’s accrued but unpaid Base Salary and expenses with respect to the period prior to the date of termination of Executive’s employment, to the extent not previously paid; (ii) Bonus for the prior year, if any, that the Company has declared that Executive has earned but which has not yet paid; (iii) a lump sum cash payment equal to Executive’s pro-rated Bonus based on the number of days of the current fiscal year Executive has been employed by the Company divided by 365; (iv) continued medical coverage at active-employee rates for two years or, if earlier, until Executive receives subsequent employer-provided coverage; (v) the amount of any benefits as are payable to Executive (or his personal representative) by reason of such death or Disability under the terms of any employee plan or insurance program maintained by the Company and in which Executive was a participant; and (vi) immediate vesting of any outstanding restricted stock units of GFI upon Executive’s termination of employment by reason of his death or vesting of any outstanding RSUs at the time such RSUs would otherwise have vested upon Executive’s termination of employment by reason of his Disability.  In addition to the foregoing, in the event the Company terminates Executive’s employment by reason of Executive’s Disability, as determined by the then-Chairman of BGCP (or his designee), Executive shall be entitled to receive the Severance Payment, payable within thirty (30) days following the date on which the Term would have expired absent such termination by reason of Disability or, if later, such later date as set forth in Section 10(f), provided, however, that if Executive violates the Covenants (i) prior to payment of the Severance Payment, then Executive will forfeit all right to receive the Severance Payment, or (ii) after the payment of the Severance Payment, then Executive shall be obligated to repay an amount equal to the sum of (x) the net after-tax amount of the Severance Payment and (y) the amount of the potential tax benefit to Executive as a result of such repayment, if any (it being understood that Executive shall be obligated to claim a deduction in respect of such repayment to the extent he is permitted to do so under applicable tax laws). Executive acknowledges that the Severance Payment above is additional consideration for his compliance with the Covenants.

(f)Any amount payable or benefit provided to Executive pursuant to this Section 10, other than accrued but unpaid Base Salary, shall be paid or provided to Executive only in the event that he executes, delivers and does not revoke a release of claims agreement substantially in the form attached hereto as Exhibit A, and any revocation period with respect to such release shall have expired, in each case within sixty (60) days of the date of termination.

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Subject to the foregoing sentence, any payments made pursuant to this Section 10 that (i) constitute “deferred compensation” for purposes of Code Section 409A shall, subject to Section 18 hereof, be made on the first regularly scheduled payroll date after the sixtieth (60th) day following Executive’s termination of employment, or (ii) do not constitute “deferred compensation” for purposes of Code Section 409A shall be made in accordance with the timeframe set forth in the applicable subsection of this Section 10 or, if later, as soon as practicable after the conditions in the first sentence of this Section 10(f) have been fully satisfied.

(g)For purposes of this Agreement:

(i)The Company may terminate the Term and Executive’s employment for “Cause” if, after giving Executive notice and an opportunity to be heard, the then-Chairman of BGCP (or his designee) determines in good faith that any of the following has occurred: (i) Executive’s willful and continued failure to substantially perform his material duties for the Company (other than due to disability with respect to which Executive has provided reasonably adequate and timely notice to the Company and BGC) after written notice specifying such failure and the manner in which Executive may rectify such failure in the future, if rectifiable, (ii) Executive’s breach of any material term of this Agreement that is not cured within 30 days of written notice from the Company, (iii) Executive’s engaging in willful, intentional misconduct that has resulted in damage to the Company’s, BGC’s or any of their respective Affiliate’s business or reputation, (iv) Executive having been indicted or convicted of, or pleaded guilty or nolo contendere to, a felony or other crime of moral turpitude, (v) Executive having engaged in fraud against the Company, BGC or any of their respective Affiliates or having intentionally misappropriated Company, BGC or any of their respective Affiliates property or breached any fiduciary duty owed to the Company, BGC or any of their respective Affiliates that has a detrimental effect on the Company’s, BGC’s or any of their respective Affiliates’ reputation or business, (vi) a failure by Executive to comply with a material written employment policy or rule of the Company that are not cured within 30 days of written notice from the Company, (vii) Executive’s unreasonable obstruction or impeding of, or failure to cooperate with, any investigation authorized by the Company or BGC or any governmental or self-regulatory entity, (viii) Executive being found liable in any Securities and Exchange Commission or other civil or criminal securities law action or becoming subject to any cease and desist order with respect to such action (regardless of whether Executive admits or denies liability), or (ix) Executive’s failure to maintain any and all licenses necessary to the performance of the duties described in Section 1(a) above. For purposes of the foregoing sentence, any act or omission by Executive done pursuant to the written direction of Shaun Lynn or his successor shall be deemed to be done in good faith and in the best interest of the Company.

(ii)The Company may terminate the term and Executive’s employment due to “Disability” meaning in the event any physical or mental illness, disability or impairment that, after reasonable accommodation (if any), has prevented Executive from continuing the performance of Executive’s normal duties and responsibilities hereunder for a period in excess of 210 consecutive days or of 270 non-consecutive days within any 18 month period; provided, that any RSUs shall only vest pursuant to Section 10(e) if the then-Chairman of BGCP (or his designee) determines, in his sole and absolute discretion that Executive was Disabled.

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(h)Amounts payable to Executive pursuant to this Section 10 shall be in full and complete satisfaction of Executive’s rights under this Agreement and any other claims he may have in respect of employment by, or other relationship with, the Company, BGC or any of their respective Affiliates.

11.Parachute Payments.

In the event any payments to Executive constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and will be subject to an excise tax imposed pursuant to Section 4999 of the Code, Executive’s severance benefits will be provided either in full or to such lesser extent which would result in no portion of such benefits being subject to such excise tax, whichever results in Executive receiving the greatest amount of severance benefits on an after-tax basis (notwithstanding that all or some portion of such benefits may be subject to such excise tax).  In the event Executive’s severance benefits are required to be reduced, such reduction shall be implemented by determining the “Parachute Payment Ratio” (as defined below) for each “parachute payment” and then reducing the “parachute payments” in order, beginning with the “parachute payment” with the highest Parachute Payment Ratio.  “Parachute payments” with the same Parachute Payment Ratio shall be reduced based on the payment dates of such “parachute payments,” with amounts having later payment dates being reduced first.  “Parachute payments” with the same Parachute Payment Ratio and the same payment dates shall be reduced on a pro rata basis (but not below zero) prior to reducing “parachute payments” with lower Parachute Payment Ratios.  For purposes of this Section, the term “Parachute Payment Ratio” means a fraction the numerator of which is the value of the applicable “parachute payment” for purposes of Code Section 280G and the denominator of which is the intrinsic value of such “parachute payment.

12.No Conflicting Obligations; No Conflicting Agreements.

Executive represents and warrants to the Company that (i) Executive is not a party to or subject to any other binding covenants, contracts, agreements, arrangements, employee manuals or other writings regarding his employment with any third party, (ii) Executive has the ability and the authority to enter into this Agreement, (iii) entering into and performing under this Agreement will not violate any agreement between Executive and any third party, and (iv) there exist no obligations to any third party that will restrict Executive’s performance of his duties to the Company, BGC or any of their respective Affiliates under this Agreement.

13.Notification of New Employer.

Prior to accepting any other employment during the Restricted Period, Executive shall notify his potential new employer of those of his obligations which are continuing under this Agreement after the termination thereof.

14.Notices.

Any notice, request or other communication permitted or required by this Agreement shall be in writing and shall be deemed to have been given (i) immediately when personally delivered to the recipient (provided a written acknowledgment of receipt is obtained), (ii) five (5) days after mailing by certified or registered mail, postage prepaid, return receipt requested or (iii) two (2) days after being sent by a nationally recognized overnight courier (provided that a written acknowledgment of receipt is obtained by the overnight courier), to the party concerned at the address indicated below (or such other address as the recipient shall have specified by ten (10) days’ advance written notice given in accordance with this Section 9).

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If to the	Shaun Lynn, President
Company or	BGC Partners
BGC:	One Churchill Place
	London E14 5RD
	Tel: +44 (0) 20 7894 7494
	Fax: +44 (0) 20 7894 7662
	Email: slynn@bgcpartners.com
If to Executive:	at the address on file with the Company.

Any notice to the Company or BGC hereunder also shall be sent to:

Stephen M. Merkel, Esq.

Executive Managing Director and Chief Legal Officer

BGC Partners, L.P.

499 Park Avenue

New York, New York 10022

Tel: (212) 829-4829

Fax: (212) 829-4708

Email: smerkel@bgcpartners.com

Any notice to Executive hereunder also shall be sent to:

Jeffrey R. Poss, Esq.

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Tel: (212) 728-8536

Fax: (212) 728-9536

Email: jposs@willkie.com

15.Opportunity for Review.

EXECUTIVE ACKNOWLEDGES THAT HE HAS REVIEWED THIS AGREEMENT CAREFULLY AND HAS HAD AMPLE OPPORTUNITY TO OBTAIN ADVICE AS TO THE MEANING OF THE TERMS, COVENANTS AND AGREEMENTS CONTAINED HEREIN FROM SUCH PROFESSIONAL ADVISORS AS EXECUTIVE HAS DEEMED APPROPRIATE OR NECESSARY.

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16.Indemnification.

(a)Until the closing of the mergers described in Section 5.16 of the Tender Offer Agreement or, if the Election is not made by the expiration of the Election Period, until the expiration of the Election Period:

(i)The Company shall provide Executive with coverage under its current directors’ and officers’ liability policy to the same extent that it provides such coverage to its other senior executives.  Subject to limitations imposed by law, the Company’s by-laws and the Company’s directors’ and officers’ liability policy, the Company shall indemnify and hold harmless Executive to the fullest extent permitted by law from and against any and all claims, damages, expenses (including attorneys’ fees), judgments, penalties, fines, settlements, and all other liabilities incurred or paid by him in connection with the investigation, defense, prosecution, settlement or appeal of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and to which Executive was or is a party or is threatened to be made a party by reason of the fact that Executive is or was an officer, employee or agent of the Company or any of its Affiliates, or by reason of anything done or not done by Executive in any such capacity or capacities, provided that Executive acted in good faith, in a manner that was not grossly negligent and did not constitute willful misconduct and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.  The Company also shall pay any and all expenses (including attorneys’ fees) incurred by Executive as a result of Executive being called as a witness in connection with any matter involving the Company and/or any of its officers or director.

(ii)The Company shall pay any expenses (including attorneys’ fees), judgments, penalties, fines, settlements, and other liabilities incurred by Executive in investigating, defending, settling or appealing any action, suit or proceedings described in this Section 16(a) in advance of the final disposition of such action, suit or proceeding.  The Company shall promptly pay the amount of such expenses to Executive, but in no event later than ten (10) days following Executive’s delivery to the Company of a written request for an advance pursuant to this Section 16(a), together with a reasonable accounting of such expenses.

(iii)Executive hereby undertakes and agrees to repay to the Company any advances made pursuant to this Section 16(a) if and to the extent that it shall ultimately be found in the final judicial decision that Executive is not entitled to be indemnified by the Company for such amounts.  In connection with any advancement of expenses, Executive further agrees to execute and deliver the Company’s customary form of undertaking to repay such advances if and to the extent that it shall ultimately be found in the final judicial decision that Executive is not entitled to be indemnified by the Company for such amounts.

(iv)The Company shall make the advances contemplated by this Section 16(a) regardless of Executive’s financial ability to make repayment, and regardless of whether indemnification of the indemnitee by the Company will ultimately be required.  Any advances and undertakings to repay pursuant to this Section 16(a) shall be unsecured and interest free.

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(b)Following the closing of the mergers described in Section 5.16 of the Tender Offer Agreement or, if the Election is not made, following the expiration of the Election Period, indemnification of Executive shall be governed by BGC’s policies.

(c)The provisions of this Section 16 shall survive the termination of the Term or expiration of the Term.

(d)If Executive has any knowledge of any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, as to which Executive may request indemnity under this Section 16, Executive will give the Company prompt written notice thereof; provided, that the failure to give such notice shall not affect Executive’s right to indemnification.

17.General.

(a)No waiver by the Company or BGC of any breach of this Agreement will be a waiver of any preceding or subsequent breach.  No waiver by the Company or BGC of any right under this Agreement will be construed as a waiver of any other right.  Neither the Company nor BGC will be required to give notice to enforce strict adherence to all terms of this Agreement.

(b)The captions and paragraph headings used in this Agreement are for convenience of reference only, and will not affect the construction or interpretation of this Agreement or any of the provisions hereof.

(c)This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of New York without regard to their conflicts of law provisions.  Each of the Parties acknowledges that service of process in any proceeding before a court of law arising out of or in connection with this Agreement may be made by delivery of a copy thereof in accordance with the notice provisions of Section 14 of this Agreement.

(d)Except for an action described in Section 8 or as required by the rules and regulations of the Financial Industry Regulatory Authority (“FINRA”), the Parties hereby agree that all claims, disputes or controversies arising under this Agreement or otherwise concerning in any way Executive’s employment (“Claims”), including, without limitation, Claims for wages or salary, severance or other compensation; Claims for breach of any contract or covenant (express or implied); tort Claims; Claims for any type of discrimination including, without limitation, race, sex, religion, national origin, age, marital status or disability; Claims for benefits (except where any applicable employee benefit or pension plan specifies a different procedure for resolving such Claims) and Claims for violation of any federal, state or other governmental law, statute, regulation, rule or ordinance (but excluding Claims for worker’s compensation or unemployment benefits), shall be resolved only in the courts of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and the appellate courts having jurisdiction of appeals in such courts.  In that context, and without limiting the generality of the foregoing (but subject to Section 8 and the rules and regulations promulgated by FINRA), each of the Parties irrevocably and unconditionally (a) submits for himself or itself in any Claim, or for the recognition and enforcement of any judgment in respect thereof (a “Proceeding”), to the exclusive jurisdiction of the courts of the State of New York sitting in the Count of New York, the court of the United States of America for the Southern District of New York, and appellate courts having jurisdiction of appeals from any of the foregoing, and agrees that all claims in respect of any such Claim shall be heard and determined in such New York State court or, to the extent permitted by law, in such federal court; (b) consents that any such Claim may and shall be brought in such courts and waives any objection that he or it may now or thereafter have to the venue or jurisdiction of any such Claim in any such court or that such Claim was brought in an inconvenient court and agrees not to plead or claim the same; (c) waives all right to trial by jury in any Claim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or Executive’s employment by the Company or any of its Affiliates, or his or its performance under or the enforcement of this Agreement; (d) agrees that service of process in any such Claim may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at his or its address as provided in Section 14; and (e) agrees that nothing in this Agreement shall affect the right to effect service of process in any other manner permitted by the laws of the State of New York.

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(e)Executive agrees that, during the Term, for (1) year thereafter and, if longer, during the pendancy of any litigation or other proceeding or other proceeding, (i) Executive shall not communicate with anyone (other than Executive’s attorneys and tax and/or financial advisors and except to the extent Executive determines in good faith is necessary in the performance of Executive’s duties hereunder) with respect to the facts or subject matter of any pending or potential litigation, or regulatory or administrative proceeding involving the Company, BGC or any of their respective Affiliates, other than any litigation or other proceeding in which Executive is a party-in-opposition, without giving prior notice to Stephen M. Merkel, Esq., Executive Managing Director and Chief Legal Officer, BGC Partners, L.P., in accordance with Section 14 above, and (ii) in the event that any other party attempts to obtain information or documents from Executive (other than in connection with any litigation or other proceeding in which Executive is a party-in-opposition) with respect to matters Executive believes in good faith are related to such litigation or other proceeding, Executive shall promptly so notify Stephen M. Merkel, Esq., Executive Managing Director and Chief Legal Officer, BGC Partners, L.P., in accordance with Section 14 above.  Executive agrees to cooperate, in a reasonable and appropriate manner, with the Company, BGC and their attorneys, both during and after the termination of Executive’s employment, in connection with any litigation or other proceeding arising out of or relating to matters in which Executive was involved prior to the termination of Executive’s employment to the extent the Company pays all reasonable travel expenses Executive incurs in connection with such cooperation.  To the extent the Company requests Executive’s cooperation after the termination of his employment, the Company shall, to the extent possible, reasonably consider Executive’s material pre-exiting scheduling commitments in connection with such request.

(f)This Agreement may be assigned, in whole or in part, by the Company or BGC without Executive’s consent to any of their respective Affiliates, including any survivor entity or other successor in interest, but no such assignment shall relieve the Company of its full responsibilities hereunder, or to a successor in interest to the assets and business of the Company.  Executive may not assign his rights or obligations under this Agreement without the written consent of the Company and BGC. 

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This Agreement will be binding upon and will inure to the benefit of the Parties and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns.

(g)Except as specifically provided in Section 8 above and in this Section 17(g), nothing in this Agreement, express or implied, is intended to or shall confer upon any person or entity, other than the Parties, any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement; provided, however, that the Parties acknowledge and agree that each of the Company’s and BGC’s Affiliates, any successor in interest to the Company, BGC or any of their Affiliates by merger, consolidation, reorganization, or otherwise, and each of their respective successors and permitted assigns are intended third party beneficiaries of this Agreement entitled to enforce the terms and conditions of this Agreement and entitled to all legal and equitable remedies in the event Executive breaches or threatens to breach, or otherwise violates, any of the Covenants or other provisions of this Agreement. For avoidance of doubt, for purposes of this Section 17(g), successors and permitted assigns shall be limited to those successors and permitted assigns provided for in Section 17(f) of this Agreement.

(h)This Agreement may be executed in counterparts, each of which will be deemed to be an original hereof, but all of which together will constitute one and the same instrument.

(i)This Agreement constitutes the sole and entire agreement and understanding between the Parties as to the subject matter hereof, and supersedes all prior discussions, agreements and understandings of every kind and nature between them as to such subject matter, including without limitation the Prior Agreement (but excluding, for the avoidance of doubt, the DE Bonus Award Agreement) and the agreement containing certain obligations, conditions and covenants set forth in Annex B to the Tender Offer Agreement to be entered into by Executive in connection with the Back-End Mergers pursuant to Section 5.16 of the Tender Offer Agreement).

(j)If any provision of this Agreement is held invalid or unenforceable, either in its entirety or by virtue of its scope or application to given circumstances, such provision will thereupon be deemed modified only to the extent necessary to render same valid, or not applicable to given circumstances, or excised from this Agreement, as the situation may require; and this Agreement will be construed and enforced as if such provision had been included herein as so modified in scope or application, or had not been included herein, as the case may be.

(k)The provisions of Sections 4, 5, 6, 7, 8, 9, 10, 12, 14, 15 and 16 of this Agreement will survive the termination of Executive’s employment in accordance with their terms.

18.Section 409A Compliance

(a)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

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(b)Notwithstanding any other payment schedule provided herein to the contrary, if Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then each of the following shall apply:

(i)With regard to any payment that is considered deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment shall be made on the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (B) the date of Executive’s death (the “Delay Period”) to the extent required under Code Section 409A.  Upon the expiration of the Delay Period, all payments delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to Executive in a lump sum, and all remaining payments due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein; and

(ii)To the extent that any benefit to be provided during the Delay Period are considered deferred compensation under Code Section 409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Code Section 409A, Executive shall pay the cost of such benefits during the Delay Period, and the Company shall reimburse Executive, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to Executive, the Company’s share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein.

(c)All expenses or other reimbursements under this Agreement shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive (provided that if any such reimbursements constitute taxable income to Executive, such reimbursements shall be paid no later than March 15th of the calendar year following the calendar year in which the expenses to be reimbursed were incurred), and no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year.

(d)For purposes of Code Section 409A, Executive’s right to receive any installment payment pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

(e)Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

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(f)Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Code Section 409A be subject to offset, counterclaim, or recoupment by any other payment pursuant to this Agreement or otherwise unless otherwise permitted by Code Section 409A or pursuant to any written agreement providing for the forfeiture of compensation upon the occurrence of certain events.

(g)To the extent Executive would be subject to the additional 20% tax imposed on certain deferred compensation arrangements pursuant to Code Section 409A as a result of any provision of this Agreement, the Company and BGC agree to reasonably cooperate with Executive to execute any amendment to the provisions hereof reasonably necessary to implement this Section 18(g) but only (i) to the minimum extent necessary to avoid application of such tax and (ii) to the extent that the Company and BGC would not (in the opinion of the Company and BGC), as a result, suffer any adverse consequences.

[Signature Page Follows]

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IN WITNESS THEREOF, the Parties have executed and delivered this Agreement as of the date first written above.

GFI Group Inc.

By:

Name:

Title:

BGC Partners, L.P.

By:

Name:

Title:

Executive

Colin Heffron

[Signature page to Employment Agreement, dated as of April 30, 2015, between GFI Group Inc., BGC Partners, L.P. and Colin Heffron]

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EXHIBIT A

Form of Release

THIS RELEASE (this “Release”) is made as of this __th day of ___________, 20__, by and between [Name] (the “Company”), and [Name] (“Executive”).

PRELIMINARY RECITALS

A.Executive’s employment with the Company has terminated.

B.[Executive and the Company are parties to an Employment Agreement, dated as of ____________________ (the “Agreement”)].

AGREEMENT

In consideration of the payments due Executive under the Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Executive, intending to be legally bound, does hereby, on behalf of himself and his agents, representatives, attorneys, assigns, heirs, executors and administrators (collectively, the “Executive Parties”) REMISE, RELEASE AND FOREVER DISCHARGE the Company, BGC Partners, L.P., BGC Partners, Inc., and each of their affiliates, subsidiaries, parents, joint ventures, and each of their officers, directors, shareholders, members, partners, and managers, and its and their respective successors and assigns, heirs, executors, and administrators (collectively, the “Company Parties”) from all causes of action, suits, debts, claims and demands whatsoever in law or in equity, which Executive or any of the Executive Parties ever had, now has, or hereafter may have, by reason of any matter, cause or thing whatsoever, from the beginning of Executive’s initial dealings with the Company to the date of this Release, and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to Executive’s employment relationship with Company, the terms and conditions of that employment relationship, and the termination of that employment relationship, including, but not limited to, any claims arising under the Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621 et seq. (“ADEA”), Title VII of The Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1966, 42 U.S.C. § 1981, the Civil Rights Act of 1991, Pub. L. No. 102-166, the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., the Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621 et seq., the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the National Labor Relations Act, 29 U.S.C. § 151 et seq., and any other claims under any federal, state or local common law, statutory, or regulatory provision, now or hereafter recognized. This Release is effective without regard to the legal nature of the claims raised and without regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort.  Except as specifically provided herein, it is expressly understood and agreed that this Release shall operate as a clear and unequivocal waiver by Executive of any claim for accrued or unpaid wages, benefits or any other type of payment, and Executive acknowledges that he was paid in full for all work performed and has received all entitlements due from the Company relating to his employment with the Company, including, without limitation, all wages, benefits, and bonus awards. 

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Without limiting the generality of the foregoing, Executive is not releasing any claims relating to (i) payments and other rights to be provided to Executive pursuant to Section 10 of the Agreement during the period following the termination of his employment, (ii) Executive’s right, if any, to claim government provided unemployment or workers’ compensation benefits, (iii) Executive’s rights or claims that might arise after signing this Release, (iv) Executive’s rights, if any, under the Consolidated Omnibus Budget Reconciliation Act, (v) Executive’s rights, if any, under the applicable plan documents to any accrued and vested benefits, savings, insurance, equity or pension plan of the Company Parties, (vi) Executive’s rights, if any, as a stockholder of the Company Parties, (vii) Executive’s right, if any, to indemnification pursuant to Section 16 of the Agreement, or (viii) any claim that may not be released by private agreement without judicial or governmental supervision or otherwise.

2.Executive expressly waives all rights afforded by any statute which limits the effect of a release with respect to unknown claims.  Executive understands the significance of his release of unknown claims and his waiver of statutory protection against a release of unknown claims.

3.Executive agrees that he will not be entitled to or accept any benefit from any claim or proceeding within the scope of this Release that is filed or instigated by him or on his behalf with any agency, court or other government entity.

4.The parties agree and acknowledge that the Agreement, and the settlement and termination of any asserted or unasserted claims against the Company and the Company Parties pursuant to this Release, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by the Company or any of the Company Parties to Executive.

5.Executive certifies and acknowledges as follows:

(a)That he has read the terms of this Release, and that he understands its terms and effects, including the fact that he has agreed to RELEASE AND FOREVER DISCHARGE the Company and all Company Parties from any legal action or other liability of any type related in any way to the matters released pursuant to this Release other than as provided in the Agreement and in this Release;

(b)That he has signed this Release voluntarily and knowingly in exchange for the consideration described herein, which he acknowledges is adequate and satisfactory to him and which he acknowledges is in addition to any other benefits to which he is otherwise entitled;

(c)That he has been and is hereby advised in writing to consult with an attorney prior to signing this Release;

(d)That he does not waive rights or claims that may arise after the date this Release is executed or those claims arising under Section 10 of the Agreement with respect to payments and other rights due Executive on the date of, or during the period following, the termination of his employment;

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(e)That the Company has provided him with adequate opportunity, including a period of twenty-one (21) days from the initial receipt of this Release and all other time periods required by applicable law, within which to consider this Release (it being understood by Executive that Executive may execute this Release less than 21 days from its receipt from the Company, but agrees that such execution will represent his knowing waiver of such 21-day consideration period), and he has been advised by the Company to consult with counsel in respect thereof;

(f)That he has seven (7) calendar days after signing this Release within which to rescind, in a writing delivered to the Company, the portion of this Release related to claims arising under ADEA or any other claim arising under any other federal, state or local that requires extension of this revocation right as a condition to the valid release and waiver of such claim; and

(g)That at no time prior to or contemporaneous with his execution of this Release has he filed or caused or knowingly permitted the filing or maintenance, in any state, federal or foreign court, or before any local, state, federal or foreign administrative agency or other tribunal, any charge, claim or action of any kind, nature and character whatsoever (“Claim”), known or unknown, suspected or unsuspected, which he may now have or has ever had against the Company Parties which is based in whole or in part on any matter referred to in Section 1 above; and, subject to the Company’s performance under this Release, to the maximum extent permitted by law, Executive is prohibited from filing or maintaining, or causing or knowingly permitting the filing or maintaining, of any such Claim in any such forum.  Executive hereby grants the Company his perpetual and irrevocable power of attorney with full right, power and authority to take all actions necessary to dismiss or discharge any such Claim.  Executive further covenants and agrees that he will not encourage any person or entity, including but not limited to any current or former employee, officer, director or stockholder of the Company, to institute any Claim against the Company Parties or any of them, and that except as expressly permitted by law or administrative policy or as required by legally enforceable order he will not aid or assist any such person or entity in prosecuting such Claim.

6.For the avoidance of doubt, Executive expressly acknowledges that, notwithstanding Sections 1, 2, 3, and 5 hereof, nothing in this Release is intended to or shall prohibit or restrict Executive from filing a charge with a government agency (such as the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, or the U.S. Securities and Exchange Commission) or testifying, assisting, or otherwise participating in an investigation with any such government agency in connection with Executive’s employment or separation from employment with the Company; provided that, to the fullest extent permitted by law, Executive waives any right to recover or receive any monetary damages or other relief, including, but not limited to, back pay, front pay, and attorneys’ fees; and further provided that, upon receipt of any subpoena, court order or other legal process compelling the disclosure of any confidential information, Executive will give prompt written notice (to the extent permitted by law) to the undersigned (or his or her successor or designee) so as to permit the Company to protect its interests in confidentiality to the fullest extent possible.

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7.Miscellaneous

(a)This Release and the Agreement, and any other documents expressly referenced therein, constitute the complete and entire agreement and understanding of Executive and the Company with respect to the subject matter hereof, and supersedes in its entirety any and all prior understandings, commitments, obligations and/or agreements, whether written or oral, with respect thereto; it being understood and agreed that this Release and including the mutual covenants, agreements, acknowledgments and affirmations contained herein, is intended to constitute a complete settlement and resolution of all matters set forth in Section 1 hereof.

(b)The Company Parties are intended third-party beneficiaries of this Release, and this Release may be enforced by each of them in accordance with the terms hereof in respect of the rights granted to such Company Parties hereunder.  Except and to the extent set forth in the preceding two sentences, this Release is not intended for the benefit of any Person other than the parties hereto, and no such other person or entity shall be deemed to be a third party beneficiary hereof.  Without limiting the generality of the foregoing, it is not the intention of the Company to establish any policy, procedure, course of dealing or plan of general application for the benefit of or otherwise in respect of any other employee, officer, director or stockholder, irrespective of any similarity between any contract, agreement, commitment or understanding between the Company and such other employee, officer, director or stockholder, on the one hand, and any contract, agreement, commitment or understanding between the Company and Executive, on the other hand, and irrespective of any similarity in facts or circumstances involving such other employee, officer, director or stockholder, on the one hand, and Executive, on the other hand.

(c)The invalidity or unenforceability of any provision of this Release shall not affect the validity or enforceability of any other provision of this Release, which shall otherwise remain in full force and effect.

(d)This Release may be executed in separate counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(e)The obligations of each of the Company and Executive hereunder shall be binding upon their respective successors and assigns.  The rights of each of the Company and Executive and the rights of the Company Parties shall inure to the benefit of, and be enforceable by, any of the Company’s, Executive’s and the Company Parties’ respective successors and assigns.  The Company may assign all rights and obligations of this Release to any successor in interest to the assets of the Company.

(f)No amendment to or waiver of this Release or any of its terms shall be binding upon any party hereto unless consented to in writing by such party.

(g)ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

* * * * *

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Intending to be legally bound hereby, Executive and the Company have executed this Release as of the date first written above.

[NAME]
By:
	Name:
	Title:

READ CAREFULLY BEFORE SIGNING

I have read this Release and have been given adequate opportunity, including 21 days from my initial receipt of this Release, to review this Release and to consult legal counsel prior to my signing of this Release.  I understand that by executing this Release I will relinquish certain rights or demands I may have against the Company Parties or any of them.

	Name
Witness:

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EX-10.4

Exhibit 10.4

CONFIDENTIAL

April 30, 2015

Ronald Levi

30 East 85th Street

Apt. 19B

New York, New York 10028

Re:Separation from Employment

Dear Ron:

This letter (“Agreement”) sets forth the agreement reached concerning the termination of your employment with GFI Group Inc. (the “Company”).  You were employed by the Company pursuant to the terms of an employment agreement dated August 20, 2008, as amended from time to time, including on December 31, 2008 and March 30, 2009 (collectively, the “Employment Agreement”).  In this Agreement, and unless the context otherwise requires, words commencing with a capital letter shall have the meanings assigned to them in Paragraph 3(d) below.

1.Resignation. You have resigned from the Company effective April 30, 2015 (the “Resignation Date”) and the Term (as defined in the Employment Agreement) shall expire as of the Resignation Date for all purposes. The Company will continue your salary, less applicable withholdings and deductions, through the Resignation Date.  You acknowledge and agree that your employment with the Company ends for all purposes on the Resignation Date, and that you shall not represent yourself as being an employee, officer, director, agent, or representative of the Company for any purpose after the Resignation Date.  You further acknowledge and agree that you are entitled to no further payments or benefits whatsoever under the Employment Agreement, and that all obligations of the Company thereunder are terminated as of the Resignation Date.

2.Separation Pay and Benefits. In consideration for you signing, delivering, and not revoking this Agreement, and in exchange for the promises, covenants and waivers set forth herein, the Company agrees to the following:

a.to pay you a lump-sum payment in the gross amount of $1,250,000, less applicable withholdings and deductions, reflecting the amount of your discretionary bonus for services performed in calendar year 2014, payable within fifteen (15) business days after this Agreement is fully executed, but in no event more than thirty (30) days following the Resignation Date, provided that you have not revoked it as set forth below, and further provided that you are in full compliance with this Agreement as of the payment date; and

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b.to pay you a lump-sum payment in the gross amount of $2,700,000, less applicable withholdings and deductions, payable within fifteen (15) business days after this Agreement is fully executed, but in no event more than thirty (30) days following the Resignation Date, provided that you have not revoked it as set forth below, and further provided that you are in full compliance with this Agreement as of the applicable payment date; and

c.to allow you to continue to vest in any unvested restricted stock units (“RSUs”) granted to you pursuant to grant agreements dated March 31, 2013 and March 31, 2014 (the “Grant Agreements”) in accordance with the schedules and conditions set forth in the Grant Agreements (other than any requirement to be employed on the applicable vesting date), provided that you are in full compliance with this Agreement as of each applicable vesting date, and further provided that you acknowledge and agree that your outstanding, unvested RSUs will be converted into Deferred Cash Awards at the Offer Price (as set forth in the Tender Offer Agreement by and among BGC Partners, Inc., BGC Partners, L.P. and GFI Group Inc., dated as of February 19, 2015 (the “Tender Offer Agreement”)) payable on the same vesting schedules as specified in the Grant Agreements.

3.Restrictive Covenants. In consideration for the payments and other benefits described above and for other good and valuable consideration, you agree as follows:

a.General. You covenant and agree that at all times while you are employed by the Company, BGC Partners, Inc. (“BGCP”) or any of their Affiliates (collectively, the “BGCP Group”) and for a period of three (3) years following the Resignation Date (the “Restricted Period”), you will not directly or indirectly, alone or by action in concert with others (including with or through any Representative):

(i)solicit, induce or influence, or attempt to solicit, induce or influence, any partner, employee or consultant of the Company or BGCP or any of their Affiliates, or any member of the Cantor Group (as defined herein) to terminate their employment or other business arrangements with the Company or BGCP or any of their Affiliates or any member of the Cantor Group, or to engage in any Competing Business or hire, employ, engage (including as a consultant or partner) or otherwise enter into a Competing Business with any such Person;

(ii)solicit any of the customers of the Company or BGCP or any of their Affiliates, or any member of the Cantor Group (or any of their employees), induce such customers or their employees to reduce their volume of business with, terminate their relationship with or otherwise adversely affect their relationship with, the Company or BGCP or any of their Affiliates or any member of the Cantor Group;

(iii)do business (if such business would constitute a Competing Business) with any person who was a customer of the Company or BGCP or any of their Affiliates or any member of the Cantor Group during the twelve (12) month period prior to the applicable date during the Restricted Period on which a determination of whether any such activity constitutes a Competing Business is being made for purposes of this Agreement;

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(iv)directly or indirectly engage in, represent in any way, or be connected with, any Competing Business, competing with the business of the Company or BGCP or any of their Affiliates or any member of the Cantor Group, whether such engagement shall be as an officer, director, owner, employee, partner, consultant, Affiliate, investor, creditor or other participant in any Competing Business;

(v)assist others in engaging in any Competing Business in the manner described in the foregoing clause (iv);

(vi)take any action that results directly or indirectly in revenues or other benefit for you or any third party that is or could be considered to be engaged in any activity of the nature set forth in clauses (ii) through (v) above;

(vii)make or participate in the making of (including through any of your Representatives) any comments to the media (print, broadcast, electronic or otherwise) that are disparaging regarding (A) the Company, BGCP, any member of the Cantor Group or any of their Affiliates, or (B) the senior executive officers of the Company, BGCP, any member of the Cantor Group or any of their Affiliates, or are otherwise contrary to the interests of the Company, BGCP, any member of the Cantor Group or any of their Affiliates, as determined by the General Partner (as defined below) in its sole and absolute discretion;

(viii)breach your duty of loyalty to the Partnership (as defined below);

(ix)take advantage of, or provide another person with the opportunity to take advantage of, a “corporate opportunity” (as such term would apply to the Partnership if it were a corporation) including opportunities related to intellectual property, which for this purpose shall require granting BGC Partners, LLC (the “General Partner”) a right of first refusal for the General Partner to acquire any assets, stock or other ownership interest in a business being sold by you or any Affiliate of yours, if an investment in such business would constitute a “corporate opportunity” (as such term would apply to the Partnership if it were a corporation), that has not been presented to and rejected by the General Partner or that the General Partner rejects but reserves for possible further action by the General Partner in writing, unless otherwise consented to by the General Partner in writing in its sole and absolute discretion; or

(x)otherwise take any action to harm, that harms, or that reasonably could be expected to harm the Company or BGCP or any of its Affiliates, or any member of the Cantor Group, including, without limitation, any breach of the provisions of Paragraph 3(c) below.

b.Exceptions. Notwithstanding the foregoing, nothing in this Paragraph 3 shall prohibit you from acquiring or owning, in accordance with BGCP’s policies and procedures regarding personal securities transactions (for so long as you are an employee of BGCP or one of its Affiliates), less than one percent (1%) of the outstanding securities of any class of any corporation that are listed on a national securities exchange or traded in the over-the-counter market. 

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The determination of whether you breach any of the covenants set forth in Paragraph 3 (the “Covenants”) shall be made in good faith by the then-Chairman of BGCP (or his designee).

c.Confidentiality.

(i)In addition to any other obligations set forth in this Agreement, you recognize that confidential information has been and will be disclosed to you by the Partnership (as defined herein) and members of the BGCP Group (including, but not limited to, the Company and the GFI Brand). You expressly agree, at all times on and after the date of this Agreement, whether or not at the time a member of the Partnership (a “Partner”) or providing services to the Partnership, any member of the BGCP Group (including, without limitation, as an employee of the Company and the GFI Brand), to (A) maintain the confidentiality of, and not disclose to any Person without the prior written consent of BGCP, any financial, legal or other advisor to BGCP, any information relating to the business, clients, affairs or financial structure, position or results of the Partnership or its Affiliates (including, without limitation, the Company and the GFI Brand) or any dispute that shall not be generally known to the public or the securities industry and (B) not to use such confidential information other than for the purpose of evaluating your investment in the Partnership, if applicable, or in connection with the discharge of any duties to the Partnership or any member of the BGCP Group (including, without limitation, the Company and the GFI Brand) you may have in your capacity as an officer, director, employee or agent of any member of the BGCP Group (including, without limitation, the Company and the GFI Brand).

(ii)In the event that any third party requests information from you (whether during your employment with the Company or with any member of the BGCP Group or otherwise during the Restricted Period), regarding any matter related to your employment by any member of the BGCP Group (including with the Company and the GFI Brand), as the case may be, you will promptly contact and notify the General Counsel of BGCP before responding to such requests for information, so that BGCP may take appropriate action to protect the Partnership’s and the BGCP Group’s interests. However, you shall not have any obligation to contact and notify the General Counsel of BGCP prior to any such timely discussions between you and your legal counsel or your certified public accountant or if such contact is prohibited by applicable law.

(iii)In the event that you are subpoenaed, or asked, to testify as a witness or to produce documents in any legal or administrative or other proceeding related to the Partnership or any member of the BGCP Group (including, without limitation, the Company and the GFI Brand), whether during your employment with the Company or with any member of the BGCP Group or otherwise during the Restricted Period, or otherwise required by law to disclose confidential information, you will promptly notify the Partnership and BGCP of such subpoena or request and meet with Partnership Representatives for a reasonable period of time prior to any such appearance or production, unless prohibited from doing so by applicable law.

(iv)So long as you shall have complied with your obligations under clauses (ii) and (iii) of this Paragraph 3(c), if, after a reasonable period after you notify the Partnership and BGCP of any request or subpoena, the Partnership and BGCP are not able to obtain a protective order or other appropriate protection of such information, then you may make such disclosures, notwithstanding any other restrictions contained in this Agreement.

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(v)In addition to the other obligations set forth above, you agree to promptly return to the Company within ten (10) days following the Resignation Date all Company documents (and any copies thereof) in any format whatsoever and property (including, but not limited to, identification cards or badges, access codes, passwords, keys, computers, mobile phones, and hand-held electronic devices). You further agree that you shall continue to abide by the provisions of any confidentiality agreements executed by you in connection with your employment with the Company, the terms of which shall survive the signing of this Agreement.

d.Definitions.  For purposes of this Paragraph 3, defined terms used but not otherwise defined in this Paragraph 3 shall have the meanings given to them in the Tender Offer Agreement and the following terms shall have the following meaning:

“Cantor Group” means, collectively, Cantor Fitzgerald, L.P., a Delaware limited partnership, its subsidiaries, and the limited and general partnerships, corporations or other entities owned, controlled by or under common control with BGCP or BGC Holdings, L.P., a Delaware limited partnership (the “Partnership”).

“Competing Business” means an activity that (w) involves the development and operations of voice, hybrid or electronic trading systems, (x) involves the conduct of the wholesale or institutional brokerage business, (y) consists of marketing, manipulating or distributing financial price or other information of a type supplied by BGCP or any of its Affiliates or any member of the Cantor Group to information distribution services or (z) competes with any other business conducted by BGCP or any of its Affiliates, or any member of the Cantor Group if such business was first engaged in by BGCP or any of its Affiliates or any member of the Cantor Group or BGCP or any of its Affiliates or any member of the Cantor Group took substantial steps in anticipation of commencing such business and prior to the applicable date during the Restricted Period that a determination of whether any such activity constitutes a Competing Business is being made for purposes of this Agreement; including, for the avoidance of doubt, on and after the Offer Closing Date, any business activity, wholly or partly, in the same or similar business operated by (including, without limitation, providing services or products similar to or that compete with the products and/or services offered or contemplated by) the Company and its Affiliates (including, without limitation, the GFI Brand), or any such business which is contemplated by the Company or its Affiliates for which the Company or any Affiliate has taken preparatory steps at the later of the Determination Date or the date you cease to provide services to the BGCP Group (including, without limitation, the Company or the GFI Brand).

“Representatives” means, with respect to any Person, the Affiliates, directors, officers, employees, general partners, agents, accountants, managing member, employees, counsel and other advisors and representatives of such Person, including immediate family members.

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e.Severability of Covenants. The Covenants contained in Paragraph 3 shall be construed as a series of separate covenants.  If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then the Company, BGCP, and you agree that such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of Paragraph 3 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then the Company or BGCP, as applicable, and you agree that such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable law.

f.Acknowledgements and Further Agreements. You acknowledge that (i) you have a substantial interest in the Company and are a key employee of the Company; (ii) the goodwill associated with the existing business, customers and assets of the Company prior to the Offer Closing is an integral component of the value of the Company to BGCP and is reflected in the consideration payable in connection with the Offer Closing; and (iii) your agreement as set forth herein is necessary to preserve the value of the Company for BGCP following the Offer Closing. You also acknowledge and agree that the provisions of this Agreement, specifically including, without limitation, Paragraph 3, are reasonable in scope and duration and are necessary to protect the interests of BGCP and the Company, including, without limitation, because, among other things: (A) the Company and BGC are engaged in a highly competitive industry; (B) you have had unique access to the trade secrets and know-how of the Company, including, without limitation, the plans and strategy (and, in particular, the competitive strategy) of the GFI Brand; and (C) you believe that this Agreement provides no more protection than is reasonably necessary to protect BGCP’s legitimate interest in the goodwill, trade secrets and confidential information of the Company.

g.Remedies. Notwithstanding Paragraph 15 below, you agree that any remedy at law for any breach of this Agreement is and will be inadequate, and in the event of a breach or threatened breach by you of any of the Covenants (to be determined in the good faith determination of the then-Chairman of BGCP (or his designee)), at any time during the Restricted Period, the Company, BGCP and their Affiliates shall be entitled to an injunction restraining you from breaching or otherwise violating any provision of this Agreement without proof of special damages or the posting of any bond or other security, as well as all other legal and equitable remedies. You agree not to oppose the granting of injunctive or other equitable relief as a remedy and agree to waive any requirement for the securing or posting of any bond in connection with such remedy. Nothing herein contained shall be construed as prohibiting the Company, BGCP or their Affiliates from pursuing any other remedies available to it for such breach or threatened breach during the Restricted Period, including, without limitation, the immediate termination of all of your rights under this Agreement, including, without limitation, the forfeiture by you of any right you may have to the payment and benefits set forth in Paragraph 2 (whether paid or unpaid) and the immediate return by you to the Company of any payments or benefits provided to you pursuant to this Agreement, and the recovery of damages from you generally. In addition, if you are determined to have breached any of the Covenants at any time during the Restricted Period, you shall return to the Company any payments or benefits provided to you pursuant to this Agreement and indemnify the Company and BGCP for and pay any resulting attorney’s fees and expenses of the Company or BGCP incurred to enforce any of the terms of this Agreement.

Page 7

h.Non-Exclusivity. The rights and remedies of the Company, BGCP and their Affiliates hereunder are not exclusive of or limited by any other rights or remedies that the Company, BGCP and their Affiliates may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative (and not alternative). Without limiting the generality of the foregoing, the rights and remedies of the Company, BGCP and their Affiliates hereunder, and the obligations and liabilities of you hereunder, are in addition to their respective rights, remedies, obligations and liabilities under the law of unfair competition, misappropriation of trade secrets and the like. This Agreement does not limit your obligations or the rights of the Company or BGCP (or any Affiliate of the Company or BGCP) under the terms of any other agreement between you and the Company or BGCP (or any Affiliate of the Company or BGCP).

4.Release of Claims. In further consideration of the payments and other benefits described in Paragraph 2 above, and for other good and valuable consideration the sufficiency of which you hereby acknowledge, you hereby release and forever discharge the Company, each member of the Cantor Group, and each member of the BGCP Group, and each of their Affiliates, as to themselves and for and on behalf of their current and former parent firms and companies, subsidiaries, divisions, affiliates, joint venture partners, predecessors and successors, successors and assigns, present and former principals, members, directors, officers, employees, owners, agents, subrogees, insurers, servants, attorneys, shareholders transferees, in each case both individually and in their official capacities, and any business in which any of these have a financial ownership interest and each of them (collectively, the “Released Parties”), from all debts, obligations, promises, covenants, agreements, contracts, endorsements, bonds, controversies, suits, actions, causes of action, judgments, damages, expenses, claims or demands, in law or in equity, which you ever had, now have, or which may arise in the future, regarding any matter arising on or before the date of your execution of this Agreement, including but not limited to all claims (whether known or unknown) regarding your employment at or termination of employment from the Company, all claims for breach of contract (express or implied), all claims for equitable relief or recovery of punitive, compensatory, or other damages or monies, attorneys’ fees, all claims under any tort or common law theory, including, without limitation, promissory estoppel, unjust enrichment, breach of a covenant of good faith and fair dealing, violation of public policy, defamation, slander, liable, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud or negligence, and all claims for alleged discrimination based upon age, race, color, sex, sexual orientation, marital status, religion, national origin, handicap, disability, genetic information, retaliation, or any other characteristic protected by applicable law, including, without limitation, any claim, asserted or unasserted, which could arise under Title VII of the Civil Rights Act of 1964; the Equal Pay Act of 1963; the Age Discrimination in Employment Act of 1967 (“ADEA”); the Older Workers Benefit Protection Act of 1990; the Americans With Disabilities Act of 1990; the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Genetic Information Nondiscrimination Act of 2008; the Family and Medical Leave Act of 1993; the Employee Retirement Income Security Act of 1974; the Civil Rights Act of 1991; the Worker Adjustment and Retraining Notification (“WARN”) Act of 1988; the Sarbanes-Oxley Act of 2002; the Dodd-Frank Wall Street Reform and Consumer Protection Act; the Uniform Services Employment and Reemployment Rights Act; the New York State WARN Act; the New York State Human Rights Law; the New York City Human Rights Law; the New York State Labor Law; and any other federal, state or local laws, statutes, rules, regulations, ordinances, executive orders, or common law, whether equal employment opportunity laws, rules or regulations or otherwise, or any right under any Company pension, welfare, or stock plans.

Page 8

This Agreement may not be cited as, and does not constitute any admission by any of the Released Parties of any violation of any such law or legal obligation. Without limiting the generality of the foregoing, you are not releasing any claim relating to: (a) your right to enforce this Agreement; (b) your right, if any, under the applicable plan documents to any vested benefits or equity; (c) your right, if any, to indemnification pursuant to Employment Agreement or Company policy; (d) your right, if any, to claim government-provided unemployment or workers’ compensation benefits; (e) your rights or claims that may arise after signing this Agreement; or (f) any claim that may not be released by private agreement without judicial or governmental supervision or otherwise.

5.No Pending Actions. You represent, warrant and agree that you have not filed any administrative charges, lawsuits, arbitrations or other proceedings against any of the Released Parties, or filed or caused to be filed any claims, charges or complaints against any of the Released Parties in any administrative, judicial, arbitral or other forum, including, without limitation, any charges or complaints against any of the Released Parties with any international, federal, state or local agency charged with the enforcement of any law or any self-regulatory organization, and you are not aware of any factual or legal basis for any legitimate claim that any of the Released Parties is in violation of any whistleblower, corporate compliance, or other regulatory obligation of any of the Released Parties under international, federal, state or local law, rule or company policy. You further represent, warrant and agree that if you were ever aware of any such basis for a legitimate claim against any of the Released Parties, you informed the General Counsel of the Company and the General Counsel of BGCP of same. You further represent that you have not sold, assigned, transferred, conveyed or otherwise disposed of to any third party, by operation of law, or otherwise, any covenant, guarantee, controversy, judgment, damage, claim, counterclaim, liability or demand of any nature whatsoever covered and released by this Agreement.

6.Sufficiency of Consideration.  You acknowledge and agree that the separation benefits to be provided to you under this Agreement are beyond those sums and benefits to which you are otherwise entitled. You further represent, warrant and acknowledge that the Company, BGCP, the Cantor Group and each of their Affiliates owe you no wages, commissions, bonuses, sick pay, personal leave pay, severance pay, vacation pay, equity, fringe benefits, any portion of the Guarantee (as defined in the Employment Agreement) or other compensation or benefits or payments or form of remuneration of any kind or nature other than that specifically provided for in this Agreement.

7.Non-Disclosure.  You agree not to disclose the terms, contents or execution of this Agreement, the claims that have been or could have been raised against the Company, BGCP or the Cantor Group or the facts and circumstances underlying this Agreement, except in the following circumstances:

Page 9

a.You may disclose the terms of this Agreement to your immediate family, so long as such family member agrees to be bound by the confidential nature of this Agreement;

b.You may disclose the terms of this Agreement to (i) your tax advisors so long as such tax advisors agree to be bound by the confidential nature of this Agreement, (ii) taxing authorities if requested by such authorities and so long as they are advised in writing of the confidential nature of this Agreement, or (iii) your legal counsel; and

c.Pursuant to the order of a court or governmental agency of competent jurisdiction, or for purposes of securing enforcement of the terms and conditions of this Agreement should that ever be necessary.

8.Agency Actions. For the avoidance of doubt, and notwithstanding Paragraphs 3, 4, 5, 7, and 11 of this Agreement, nothing in this Agreement is intended to or shall prohibit or restrict you from filing a charge with a government agency (such as the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, or the U.S. Securities and Exchange Commission) or testifying, assisting, or otherwise participating in an investigation with any such government agency in connection with your employment or separation from employment with the Company; provided that to the fullest extent permitted by law, you waive any right to recover or receive any monetary damages or other relief, including, but not limited to, back pay, front pay, and attorneys’ fees; and further provided that, upon receipt of any subpoena, court order or other legal process compelling the disclosure of any confidential information, you will give prompt written notice (to the extent permitted by law) to the undersigned Company representative (or his or her successor or designee) and to the General Counsel of BGCP so as to permit the Company to protect its interests in confidentiality to the fullest extent possible.

9.Code Section 409A. The Company may deduct or withhold from any compensation or benefits any applicable federal, state or local tax or employment withholdings or deductions resulting from any payments or benefits provided under this Agreement. In addition, it is the Company’s intention that all payments or benefits provided under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), including without limitation the six month delay for payments of deferred compensation to “key employees” upon separation from service pursuant to Section 409A(a)(2)(B)(i) of the Code (if applicable), and this Agreement shall be interpreted, administered and operated accordingly. If under this Agreement an amount is to be paid in installments, each installment shall be treated as a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2)(ii). Notwithstanding anything to the contrary herein, the Company does not guarantee the tax treatment of any payments or benefits under this Agreement, including without limitation under the Code, federal, state, local or foreign tax laws and regulations. In the event the period of payment referenced in Paragraph 2 of this Agreement ends in the taxable year following your termination of employment, any severance payment or deferred compensation payment shall be paid or commence in such subsequent taxable year if required under Section 409A of the Code.  You are solely responsible for all tax obligations that may arise from this Agreement, and you agree to promptly pay and to indemnify the Company from all costs, damages or expenses it incurs in connection with such a claim.

Page 10

10.Cooperation.  You agree that you will assist and cooperate with the Company, BGCP, the Cantor Group and their Affiliates in connection with the transition of your job responsibilities, including, without limitation, by making yourself available to provide such assistance and cooperation to the Company, BGCP, the Cantor Group and their Affiliates on reasonable notice. You further agree that you will assist and cooperate with the Company, BGCP, the Cantor Group or any of their Affiliates in connection with the defense or prosecution of any pending or threatened action that may be made against or by the Company, BGCP, the Cantor Group or any of their Affiliates or in connection with any ongoing or future investigation or dispute or claim of any kind involving the Company, BGCP, the Cantor Group or any of their Affiliates, including, without limitation, meeting with the their counsel or other representative to prepare for any proceeding (including depositions), to provide affidavits, to assist with any audit, inspection, proceeding or other inquiry, and to provide truthful testimony in connection with any litigation or other legal proceeding before any arbitral, administrative, judicial, legislative, or other body or agency, to the extent such claims, investigations or proceedings relate to services performed or required to be performed by you, pertinent knowledge possessed by you, or any act or omission by you. You further agree to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Paragraph.  The Company agrees to reimburse you for reasonable documented travel expenses incurred should your presence be required in person. You further agree to promptly notify the Company in writing if you are contacted (directly or indirectly) by any individual or person representing an individual or entity that is or may be legally or competitively adverse to the Company, BGCP, the Cantor Group or their Affiliates in connection with any claims or legal proceedings (other than any charges filed with a government agency by you), including by providing a reasonable description of the content of the communication with the legally or competitively adverse individual or entity. You further represent that you have advised authorized officers of the Company, or other Company employees designated in the Company’s Handbook and policies, of all facts about which you are aware and which you believe may constitute a violation of Company policy and/or the Company’s legal obligations, if any.

11.Ownership. You agree and acknowledge that the Company owns all tangible and intangible work product originated or developed by you in connection with your employment, even if developed outside the Company’s premises.  You further agree that the Company shall have exclusive ownership of any and all right, title and interest in (1) all copyrights, trademarks, service mark rights, patents or processes associated with any work, mark, invention or process produced during the course of your employment which was originated or developed in connection with such employment with the Company or any related party; and (2) any such proprietary rights with respect to any invention or process originated or developed in connection with your employment with the Company or any related party reduced to practice following the termination of your employment, if the invention or process existed in an intangible form prior to such termination, even if it was not workable at that time.  You agree to execute any and all documents necessary to protect and preserve the Company’s proprietary rights in copyrights, trademarks, service marks, patents, processes and trade secrets, including at the Company’s request, to confirm such assignment in writing.

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12.Entire Agreement.  This Agreement constitutes the entire agreement between the Company and you, and supersedes and cancels all prior and contemporaneous written and oral agreements, if any, between the Company and you. You affirm that, in entering into this Agreement, you are not relying upon any oral or written promise or statement made by anyone at any time on behalf of the Company.

13.Successors and Assigns; Third Party Beneficiaries. This Agreement is binding upon you and your successors, assigns, heirs, executors, administrators and legal representatives. This Agreement may not be assigned, in whole or in part, by either party hereto without the prior written consent of the other party (any purported assignment hereof in violation of this subparagraph being null and void), provided however, that the Company may, without prior consent, freely assign this Agreement to any successor in interest to the Company or any affiliate by merger, consolidation, reorganization or otherwise. Except as specifically provided in Paragraph 3(g) above and in this Paragraph 13, nothing in this Agreement, express or implied, is intended to or shall confer upon any person or entity, other than the Company and you, any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement; provided, however, that the Company and you acknowledge and agree that the Company, each member of the BGCP Group, each member of the Cantor Group, and each of their Affiliates, any successor in interest to the Company, any member of the BGCP Group, any member of the Cantor Group, or any of their Affiliates by merger, consolidation, reorganization, or otherwise, and each of their respective successors and permitted assigns are intended third party beneficiaries of this Agreement entitled to enforce the terms and conditions of this Agreement and entitled to all legal and equitable remedies in the event you breach or threaten to breach, or otherwise violates, any of the Covenants or other provisions of this Agreement. For avoidance of doubt, for purposes of this Paragraph 13, successors and permitted assigns shall be limited to those successors and permitted assigns provided for in this Paragraph 13.

14.Severability.  If any of the provisions, terms or clauses of this Agreement is declared illegal, unenforceable or ineffective in a legal forum, those provisions, terms and clauses shall be deemed severable, such that all other provisions, terms and clauses of this Agreement shall remain valid and binding upon the applicable parties.

15.Dispute Resolution.  This Agreement will be governed by and construed in accordance with the laws of the State of New York without giving effect to the principles of conflicts of laws thereof.  Any disputes, differences or controversies arising under this Agreement shall be settled and finally determined by arbitration before a panel of (a) three arbitrators in New York, New York, according to the rules of Financial Industry Regulatory Authority (“FINRA”), if you are a FINRA registered person and the dispute is eligible for resolution by arbitration in accordance with the FINRA Dispute Resolution process, or (b) by a single arbitrator in New York, New York according to the Employment Dispute Rules of the American Arbitration Association or its successor (the “AAA”).  The arbitrator(s) shall make their award in accordance with and based upon all provisions of this Agreement and judgment upon any award rendered by the arbitrators shall be entered in any court having jurisdiction thereof. However, it is understood and agreed that the arbitrators are not authorized or entitled to include as part of any award rendered by them, special, exemplary, punitive or statutory double (or multiple) damages or amounts in the nature of special, exemplary, punitive or statutory double (or multiple) damages regardless of the nature or form of the claim or grievance that has been submitted to arbitration. 

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If an applicable statute or another agreement discusses awards of attorneys’ fees, such statute or agreement will apply. In addition, whether or not there is any such applicable statute, at any point either party may in writing offer to pay the other a stated amount of money, or partnership interests or stock in a Company entity (the “Offeror”) to resolve the matter in return for a general release of the Offeror. The other party (“Offeree”) will have fourteen (14) calendar days from the day after the offer is sent to accept.  If the Offeree does not unconditionally accept in writing within the fourteen (14) calendar days and, thereafter, is awarded less than the amount offered, the Offeror shall be awarded its attorneys’ fees and costs and disbursements from the date of the offer.  Such amount shall be offset against any damages awarded to the Offeree, and, if greater than the damages awarded, the net deficit shall be entered as an award in favor of the Offeree.  You hereby irrevocably consent to the service of process outside the territorial jurisdiction of such arbitrators in any such action or proceeding by mailing copies thereof by registered U.S. mail, postage prepaid, to your address as set forth herein.

16.Binding Agreement. You may not execute this Agreement until the Resignation Date, and any purported execution by you of this Agreement prior to the Resignation Date shall be null and void. This Agreement in unsigned form does not become an offer of any kind and does not become capable of acceptance until executed by you, and at such time, this Agreement is capable of contract formation by signature by a duly authorized officer of the Company; this Agreement shall be effective only when executed by both you and a duly authorized officer of the Company, and upon such shall be binding and enforceable.

17.Counterparts. This Agreement may be executed by facsimile and .pdf and in counterparts, each of which shall be deemed an original and all of which when taken together shall constitute but one and the same instrument.

18.Withholding.  All amounts paid hereunder shall be subject to withholding and other applicable taxes.  Any amounts due to you under this Agreement may be set off by any obligations of you to the Company whether under this Agreement or any other agreement or otherwise, whether existing or hereafter arising (including both monetary obligations and the fair market value of any non-cash item and including amounts not yet due), to the extent permitted by law.

19.Knowing and Voluntary Waiver.  Without detracting in any respect from any other provision of this Agreement:

a.You, in consideration of the payments and other consideration provided to you as described in Paragraph 2 of this Agreement, agree and acknowledge that this Agreement constitutes a knowing and voluntary waiver of all rights or claims you have or may have against the Company, BGCP, the Cantor Group or any of their Affiliates, as set forth herein, including, but not limited to, all rights or claims arising under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), or relevant equivalent state or local statute, including, but not limited to, all claims of age discrimination in employment and all claims of retaliation in violation of the ADEA or other state or local age discrimination statute; and you have no physical or mental impairment of any kind that has interfered with your ability to read and understand the meaning of this Agreement or its terms, and that you are not acting under the influence of any medication or mind-altering chemical of any type in entering into this Agreement.

Page 13

b.You understand that, by entering into this Agreement, you do not waive rights or claims that may arise after the date of your execution of this Agreement, including, without limitation, any rights or claims that you may have to secure enforcement of the terms and conditions of this Agreement.

c.You agree and acknowledge that the consideration provided to you under this Agreement is in addition to anything of value to which you are already entitled.

d.The Company hereby advises you to consult with an attorney prior to executing this Agreement.

e.You acknowledge that you were informed that you had at least twenty-one (21) days in which to review and consider this Agreement and to consult with an attorney regarding the terms and effect of this Agreement. You may, in your sole discretion, execute and deliver to the Company this Agreement prior to the expiration of the 21-day period, provided that you do not execute it before the Resignation Date.

f.Nothing in this Agreement shall prevent you (or your attorneys) from (i) commencing an action or proceeding to enforce this Agreement or (ii) exercising your right under the Older Workers Benefit Protection Act of 1990 to challenge the validity of your waiver of ADEA claims set forth in Paragraph 4 of this Agreement.

20.Revocation.  You may revoke this Agreement within seven (7) days from the date you sign this Agreement, in which case this Agreement shall be null and void and of no force or effect on either any of the parties hereto. Any revocation must be in writing and received by the Company before the end of the seventh day after this Agreement is executed by you.  Such revocation must be sent to the undersigned at the Company.

21.Amendments.  This Agreement may not be changed or altered, except by a writing signed by an authorized officer of the Company and you. This Agreement is entered into in the State of New York, and the laws of the State of New York will apply to any dispute concerning it, excluding the conflict-of-law principles thereof.

[SIGNATURE PAGE FOLLOWS]

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YOU EXPRESSLY ACKNOWLEDGE, REPRESENT AND WARRANT THAT YOU HAVE READ THIS AGREEMENT CAREFULLY; THAT YOU FULLY UNDERSTAND THE TERMS, CONDITIONS AND SIGNIFICANCE OF THIS AGREEMENT; THAT YOU HAVE HAD A FULL OPPORTUNITY TO REVIEW THIS AGREEMENT WITH AN ATTORNEY; THAT YOU UNDERSTAND THAT THIS AGREEMENT HAS BINDING LEGAL EFFECT; AND THAT YOU HAVE EXECUTED THIS AGREEMENT FREELY, KNOWINGLY AND VOLUNTARILY.

PLEASE READ CAREFULLY. THIS AGREEMENT HAS IMPORTANT LEGAL CONSEQUENCES.

Date:
		Ronald Levi
		GFI Group Inc.
Date:	By:
		Name:
		Title:

You must sign and return this Agreement to the Company no later than the end of the 21st day following receipt of this document or irrevocably lose the opportunity to receive the consideration detailed herein. You received this Agreement on April 30, 2015.

EX-31.1

Exhibit 31.1

Certification

I, Howard W. Lutnick, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of GFI Group Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2015

/s/ HOWARD W. LUTNICK

Howard W. Lutnick

Chairman of the Board and Chief Executive Officer

68

EX-31.2

Exhibit 31.2

Certification

I, James A. Peers, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of GFI Group Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2015

/s/ JAMES A. PEERS

James A. Peers

Chief Financial Officer

69

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer of GFI Group Inc.
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of GFI Group Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Howard W. Lutnick, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 11, 2015

/s/ HOWARD W. LUTNICK

Howard W. Lutnick

Chairman of the Board and Chief Executive Officer

70

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer of GFI Group Inc.
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of GFI Group Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James A. Peers, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 11, 2015

/s/ JAMES A. PEERS

James A. Peers

Chief Financial Officer

71

XML

REGULATORY REQUIREMENTS (Tables)

3 Months Ended

Mar. 31, 2015

REGULATORY REQUIREMENTS

Schedule of aggregate regulatory capital in individually regulated entities by operating region

	Americas		EMEA		Asia
Regulatory capital	$	24,422	$	122,996	$	31,824
Minimum regulatory capital required	7,150		98,895		8,608
Excess regulatory capital	$	17,272	$	24,101	$	23,216

XML

DEFERRED COMPENSATION (Details) (2008 Equity Incentive Plan, RSUs, USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
2008 Equity Incentive Plan | RSUs
DEFERRED COMPENSATION
Value to be received in cash (in dollars per share)	$ 6.10
Restricted Stock Units
Outstanding at the beginning of the period (in shares)	14,282,789
Vested (in shares)	(393,554)
Cancelled (in shares)	(64,724)
Converted to deferred cash awards (in shares)	(13,824,511)
Weighted-Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)	$ 4.02
Granted (in dollars per share)		$ 3.56
Vested (in dollars per share)	$ 3.71
Cancelled (in dollars per share)	$ 3.81
Converted to deferred cash awards (in dollars per share)	$ 4.03
Total compensation expense and related income tax benefits
Compensation expense	$ 17,917	$ 7,356
Income tax benefits	5,116	2,099
Incremental compensation expense due to modifications	11,545
Total unrecognized compensation cost	41,829
Weighted average period over which unrecognized compensation cost is expected to be recognized	1 year 4 months 17 days
Total fair value of shares vested	$ 1,459	$ 16,057

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GOODWILL AND INTANGIBLE ASSETS (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Intangible Assets
Gross amount	$ 86,469		$ 86,469
Accumulated amortization and foreign currency translation	57,627		55,564
Net carrying value	28,842		30,905
Intangible amortization expense	1,657	2,469
Expected amortization expense for the definite lived intangible assets
2015	4,842
2016	5,941
2017	4,117
2018	3,298
2019	3,081
Thereafter	7,563
Total	28,842
Customer relationships
Intangible Assets
Gross amount	62,334		62,334
Accumulated amortization and foreign currency translation	40,604		39,203
Net carrying value	21,730		23,131
Trade names
Intangible Assets
Gross amount	7,904		7,904
Accumulated amortization and foreign currency translation	6,851		6,750
Net carrying value	1,053		1,154
Core technology
Intangible Assets
Gross amount	8,697		8,697
Accumulated amortization and foreign currency translation	4,508		4,105
Net carrying value	4,189		4,592
Non-compete agreements
Intangible Assets
Gross amount	3,756		3,756
Accumulated amortization and foreign currency translation	3,434		3,429
Net carrying value	322		327
Patents
Intangible Assets
Gross amount	3,131		3,131
Accumulated amortization and foreign currency translation	1,844		1,719
Net carrying value	1,287		1,412
Other
Intangible Assets
Gross amount	647		647
Accumulated amortization and foreign currency translation	386		358
Net carrying value	261		289
KGL
Intangible Assets
Intangible assets, net			4,302
KGL | Customer relationships
Intangible Assets
Intangible assets, net			3,715
KGL | Trade names
Intangible Assets
Intangible assets, net			576
KGL | Non-compete agreements
Intangible Assets
Intangible assets, net			$ 11

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SEGMENT AND GEOGRAPHIC INFORMATION (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
SEGMENT AND GEOGRAPHIC INFORMATION
Revenues:	$ 231,522	$ 240,739
Revenues, net of interest and transaction-based expenses:	205,616	202,427
Long-lived Assets, as defined:	57,157		59,332
United States
SEGMENT AND GEOGRAPHIC INFORMATION
Revenues:	68,766	63,213
Revenues, net of interest and transaction-based expenses:	67,937	62,096
Long-lived Assets, as defined:	47,262		48,506
United Kingdom
SEGMENT AND GEOGRAPHIC INFORMATION
Revenues:	107,351	124,305
Revenues, net of interest and transaction-based expenses:	83,942	89,819
Long-lived Assets, as defined:	6,935		6,976
Other
SEGMENT AND GEOGRAPHIC INFORMATION
Revenues:	55,405	53,221
Revenues, net of interest and transaction-based expenses:	53,737	50,512
Long-lived Assets, as defined:	2,960		3,850
Sales Revenue, Net [Member] | Geographic Concentration Risk [Member] | Minimum | United Kingdom
SEGMENT AND GEOGRAPHIC INFORMATION
Concentration risk (as a percent)	10.00%	10.00%
Net Assets, Geographic Area [Member] | Geographic Concentration Risk [Member] | Minimum | United Kingdom
SEGMENT AND GEOGRAPHIC INFORMATION
Concentration risk (as a percent)	10.00%	10.00%
KBL
SEGMENT AND GEOGRAPHIC INFORMATION
Property, equipment and leasehold improvements, net	157		178
KGL and KBL
SEGMENT AND GEOGRAPHIC INFORMATION
Property, equipment and leasehold improvements, net			$ 2,122

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DEFERRED COMPENSATION (Details 2) (Deferred cash compensation awards, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Deferred cash compensation awards
Deferred Cash Compensation
Compensation expense	$ 325	$ 11
Total unrecognized compensation cost	$ 13,324
Weighted average period over which unrecognized compensation cost is expected to be recognized	2 years 9 months 22 days

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RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS (Details 2) (KGL, USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Cash payable to clearing customers
Payables to clearing services customers	$ 142,108
Assets held for sale
Cash payable to clearing customers
Cash and cash equivalents	11,162
Cash segregated under federal and other regulations	52,160
Receivables from brokers, dealers and clearing organizations	78,786
Payables to clearing services customers, cash held	$ 142,108

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OTHER ASSETS AND OTHER LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2015

OTHER ASSETS AND OTHER LIABILITIES

Schedule of other assets

	March 31, 2015		December 31, 2014
Deferred tax assets	$	108,561	$	91,935
Prepaid bonuses	15,905		16,523
Forgivable employee loans and advances to employees	15,022		15,072
Investments accounted for under the cost method and equity method	14,375		14,872
Financial instruments owned	5,302		3,865
Deferred financing fees	4,566		5,038
Software inventory, net	3,414		3,435
Other	26,714		21,981
Total Other assets	$	193,859	$	172,721

Schedule of other liabilities

	March 31, 2015		December 31, 2014
Payroll related liabilities	$	29,105	$	12,522
Deferred revenues	9,252		7,993
Deferred rent liabilities	8,494		8,657
Unrecognized tax benefits	7,983		8,396
Income taxes payable	6,353		5,384
Interest payable	6,317		12,457
Deferred tax liabilities	4,591		4,726
Financial instruments sold, not yet purchased	2,166		1,387
Other	8,598		8,748
Total Other liabilities	$	82,859	$	70,270

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COMMITMENTS AND CONTINGENCIES (Details 2) (USD $)	0 Months Ended
	Apr. 16, 2015	Nov. 14, 2013
Contingencies
Range of possible loss, minimum		$ 0
Range of possible loss, maximum		$ 10,000,000
Consolidated Delaware Action
Contingencies
Period granted from the filing of an amended complaint for defendants to answer, move, or otherwise respond.	30 days

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RELATED PARTIES (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Related Party Transaction
Payables to brokers, dealers and clearing organizations	$ 1,061,872	$ 463,243
BGC
Related Party Transaction
Beneficial ownership percentage	56.00%
Receivables from related party	60,256
Receivable for loan, current	60,000
Payables to brokers, dealers and clearing organizations	12,898
Loan receivable, due June 2015 | BGC
Related Party Transaction
Receivable for loan, current	40,000
Interest rate (as a percent)	3.75%
March 2015 Loan receivable, due on demand | BGC
Related Party Transaction
Receivable for loan, current	$ 20,000
Interest rate (as a percent)	3.75%

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REGULATORY REQUIREMENTS

3 Months Ended

Mar. 31, 2015

REGULATORY REQUIREMENTS

REGULATORY REQUIREMENTS

17.    REGULATORY REQUIREMENTS

Many of the Company’s material operating subsidiaries are subject to regulatory restrictions and minimum capital requirements, which may restrict the Company’s ability to withdraw capital from its subsidiaries.

Certain domestic subsidiaries of the Company are registered as a broker-dealer, swap execution facility (“SEF”) or introducing broker and therefore are subject to the applicable rules and regulations of the SEC and the Commodity Futures Trading Commission (“CFTC”). Certain foreign subsidiaries are also registered as introducing brokers with the CFTC. These rules contain uniform minimum net capital requirements, as defined, and also require a significant part of the registrants’ assets be kept in relatively liquid form. As of March 31, 2015, each of the Company’s subsidiaries that are subject to these regulations had net capital in excess of their minimum capital requirements.

Certain of the Company’s European subsidiaries are regulated by the Financial Conduct Authority (“FCA”) and must maintain financial resources (as defined by the FCA) in excess of FCA’s total financial resources requirement. As of March 31, 2015, each of these European subsidiaries had financial resources in excess of their requirements.

Certain other subsidiaries of the Company are subject to similar regulatory and other requirements in the jurisdictions in which they operate and, as of March 31, 2015, each of these subsidiaries was in compliance with its regulatory capital requirements.

The regulatory requirements referred to above may restrict the Company’s ability to withdraw capital from its regulated subsidiaries. As of March 31, 2015, the Company had the following aggregate regulatory capital, in individually regulated entities, in each of its operating regions:

	Americas		EMEA		Asia
Regulatory capital	$	24,422	$	122,996	$	31,824
Minimum regulatory capital required	7,150		98,895		8,608
Excess regulatory capital	$	17,272	$	24,101	$	23,216

The regulatory requirements set forth in the table above include aggregated amounts held in individually regulated entities in each of the Company’s operating regions, calculated by entity, to comply with the requirements of various regulators for capital requirements in each of those entities. In situations where the Company is subject to the requirements of multiple regulators, the Company has included the more onerous capital requirement in the table above.

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OTHER ASSETS AND OTHER LIABILITIES (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Other liabilities
Payroll related liabilities	$ 29,105	$ 12,522
Deferred revenues	9,252	7,993
Deferred rent liabilities	8,494	8,657
Unrecognized tax benefits	7,983	8,396
Income taxes payable	6,353	5,384
Interest payable	6,317	12,457
Deferred tax liabilities	4,591	4,726
Financial instruments sold, not yet purchased	2,166	1,387
Other	8,598	8,748
Total Other liabilities	$ 82,859	$ 70,270

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ACQUISITION BY BGC PARTNERS, INC. AND TERMINATION OF THE CME MERGER (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		0 Months Ended		1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jan. 30, 2015	Mar. 04, 2015	Feb. 28, 2015	Mar. 03, 2015	Feb. 26, 2015	Jul. 30, 2014
Acquisition by BGC Partners, Inc. and termination of the CME merger
Aggregate purchase price		$ 92
Merger termination fees	24,728
CME Merger Agreement
Acquisition by BGC Partners, Inc. and termination of the CME merger
Merger termination fees			24,728
BGC | GFI
Acquisition by BGC Partners, Inc. and termination of the CME merger
Purchase consideration per share in cash (in dollars per share)							$ 6.10
Number of shares already owned						17,120,464
Ownership interest (as a percentage)				56.00%
BGC and BGC L.P. | GFI
Acquisition by BGC Partners, Inc. and termination of the CME merger
Number of shares of common stock for which payment has been made				54,274,212
Aggregate purchase price				331,073
CME, JPI and certain other stockholders of GFI | CME Merger Agreement
Acquisition by BGC Partners, Inc. and termination of the CME merger
Ownership interest (as a percentage)								38.00%
CME | CME Merger Agreement
Acquisition by BGC Partners, Inc. and termination of the CME merger
Reimbursement of expenses					7,065
Termination fee less reimbursement expenses			$ 17,663
Period for triggering termination fee			12 months
Percentage of fair value of the assets or class of equity or voting securities of the company and its subsidiaries			20.00%

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2015

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schedule of financial assets and liabilities measured at fair value on a recurring basis

	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at March 31, 2015
Assets
Other assets: Financial instruments owned:
Equity securities	$	247		$	94	$	—	$	341
Derivative contracts:
Foreign exchange derivative contracts	$	342		$	3,620	$	—	$	3,962
Commodities derivative contracts	1,650			—		—		1,650
Netting (1)	(651		)	—		—		(651		)
Total derivative contracts	$	1,341		$	3,620	$	—	$	4,961
Total financial instruments owned	$	1,588		$	3,714	$	—	$	5,302
Total	$	1,588		$	3,714	$	—	$	5,302
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:
Derivative contracts:
Foreign exchange derivative contracts	$	57		$	2,166	$	—	$	2,223
Commodities derivative contracts	594			—		—		594
Netting (1)	(651		)	$	—	$	—	$	(651	)
Total derivative contracts	$	—		$	2,166	$	—	$	2,166
Total financial instruments sold, not yet purchased	$	—		$	2,166	$	—	$	2,166
Total	$	—		$	2,166	$	—	$	2,166

(1) Represents the impact of netting on a net-by-counterparty basis.

	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2014
Assets
Other assets: Financial instruments owned:
Equity securities	$	—		$	232	$	—	$	232
Derivative contracts:
Foreign exchange derivative contracts	$	592		$	2,181	$	—	$	2,773
Commodities derivative contracts	1,198			—		—		1,198
Netting (1)	(338		)		—	—			(338	)
Total derivative contracts	$	1,452		$	2,181	$	—	$	3,633
Total financial instruments owned	$	1,452		$	2,413	$	—	$	3,865
Total	$	1,452		$	2,413	$	—	$	3,865
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:
Derivative contracts:
Foreign exchange derivative contracts	$	—		$	1,387	$	—	$	1,387
Commodities derivative contracts	$	338		$	—	$	—	$	338
Netting (1)	(338		)	—		—		(338		)
Total derivative contracts	$	—		1,387		—		1,387
Total financial instruments sold, not yet purchased	$	—		$	1,387	$	—	$	1,387
Other liabilities: Contingent consideration	$	—		$	—	$	348	$	348
Total	$	—		$	1,387	$	348	$	1,735

(1) Represents the impact of netting on a net-by-counterparty basis.

Schedule of changes in Level 3 financial assets and liabilities measured at fair value on a recurring basis

	Opening Balance		Total realized and unrealized losses included in Net loss (1)		Unrealized gains (losses) included in Other comprehensive loss		Purchases		Issues		Sales		Settlements		Closing Balance at March 31, 2015		Unrealized gains (losses) for Level 3 Assets / Liabilities Outstanding at March 31, 2015
Liabilities
Other liabilities:
Contingent consideration:	$	348	$	115	$	—	$	—	$	—	$	—	$	(463)	$	—	$	—

(1) Realized and unrealized gains (losses) are reported in Other income, net in the Condensed Consolidated Statements of Operations.

	Opening Balance		Total realized and unrealized losses included in Net loss (1)			Unrealized losses included in Other comprehensive income		Purchases		Issuances		Sales		Settlements		Closing Balance at March 31, 2014		Unrealized gains (losses) for Level 3 Assets / Liabilities Outstanding at March 31, 2014
Assets
Other assets:
Financial instruments owned:
Equity derivative contracts	$	14	$	(14	)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Liabilities
Other liabilities:
Contingent consideration	$	4,317	$	28		$	27	$	—	$	—	$	—	$	—	$	4,372	$	28

(1) Realized and unrealized gains (losses) are reported in Other income, net in the Condensed Consolidated Statements of Operations.

Schedule of significant unobservable inputs utilized by the company in the fair value measurement of Level 3 assets and liabilities measured at fair value on a recurring basis

	Fair Value as of December 31, 2014		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average) (a)
Liabilities
Contingent consideration	$	348	Present value of expected payments	Discount rate		17	%
				Forecasted financial information		(b)

(a) As December 31, 2014, contingent consideration consisted of one liability.

(b) The Company’s estimate of contingent consideration as of December 31, 2014was principally based on the acquired business’ projected future financial performance, including revenues and operating margins from May 1, 2014 through April 30, 2015.

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STOCKHOLDERS' EQUITY (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended	3 Months Ended	1 Months Ended
	Mar. 28, 2014	Mar. 31, 2014	Apr. 30, 2015	Apr. 29, 2015	Apr. 28, 2015	Mar. 31, 2015	Dec. 31, 2014	Jul. 31, 2011
Cash dividend paid (in dollars per share)	$ 0.05
Cash dividend paid	$ 6,188	$ 6,188
8.375% senior notes
Interest rate (as a percent)				8.375%	8.375%	8.375%	8.375%	8.375%
Subsequent events
Maximum amount of common stock and 8.375% Senior Notes authorized for repurchase			$ 50,000

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VARIABLE INTEREST ENTITIES (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Non-consolidated Variable Interest Entities | VIEs in the form of direct equity interests, a convertible note and a non-recourse loan
VARIABLE INTEREST ENTITIES
Carrying Amount of Assets	$ 2,802	$ 3,144
Maximum exposure to loss	2,850	3,144
Consolidated Variable Interest Entities
VARIABLE INTEREST ENTITIES
Total assets of consolidated VIE	10,804	9,956
Total liabilities of consolidated VIE	2,955	2,761
Estimated exposure to economic loss	$ 5,633	$ 5,298

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) (Contingent consideration, Fair value measured on a recurring basis, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Contingent consideration | Fair value measured on a recurring basis
Changes in Level 3 Financial Liabilities measured at fair value
Opening Balance	$ 348	$ 4,317
Total realized and unrealized losses included in Net loss	115	28
Unrealized losses included in Other comprehensive income		27
Settlements	(463)
Closing Balance		4,372
Unrealized gains (losses) for Level 3 Liabilities outstanding at end of the period		$ 28

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GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Goodwill
Goodwill at the beginning of the period	$ 134,542
Foreign currency translation	(184)
Goodwill at the end of the period	134,358
All other
Goodwill
Goodwill at the beginning of the period	134,542
Foreign currency translation	(184)
Goodwill at the end of the period	$ 134,358

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ORGANIZATION AND BUSINESS

3 Months Ended

Mar. 31, 2015

ORGANIZATION AND BUSINESS

ORGANIZATION AND BUSINESS

1.     ORGANIZATION AND BUSINESS

The Condensed Consolidated Financial Statements include the accounts of GFI Group Inc. and its subsidiaries (collectively, “GFI” or the “Company”). The Company, through its subsidiaries, provides wholesale brokerage and trade execution services, clearing services and trading system software products to institutional clients in markets for a range of fixed income, financial, equity and commodity instruments. The Company complements its brokerage and trade execution capabilities with value-added services, such as market data and analytical software products for trader and back-office support, which it licenses primarily to companies in the financial services industry.  The Company is majority-owned by, and operates as a division of BGC Partners, Inc. (together with its affiliates, “BGC”), which owned approximately 56% of the Company’s outstanding shares of common stock as of March 31, 2015. See Note 2 for further information on the acquisition by BGC. In addition, as of March 31, 2015, Jersey Partners, Inc. (“JPI”) owned approximately 36% of the Company’s outstanding shares of common stock. The Company’s executive chairman, Michael Gooch, is the controlling shareholder of JPI.

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 5) (Fair value measured on a recurring basis, Significant Unobservable Inputs (Level 3), USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Fair value, Unobservable Input
Fair Value, Liabilities	348
Contingent consideration
Fair value, Unobservable Input
Fair Value, Liabilities	348
Contingent consideration | Present value of expected payments
Unobservable Input(s)
Discount rate (as a percent)	17.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014	Dec. 31, 2014
Significant accounting policies
Number of VIEs in which the company is the primary beneficiary	1
Prepaid bonuses	$ 15,905		$ 16,523
Forgivable employee loans and advances to employees	15,022		15,072
Amortization of prepaid bonuses and forgivable employee loans	4,831	6,720
Carrying amount of equity method investments	12,842		13,184
Carrying amount of cost-method investments	1,533		1,688
Fair value of available-for-sale securities	98		0
(Benefit from) provision for income taxes	(12,392)	1,094
Net losses resulting from remeasurement of foreign currency transactions and balances	$ 1,038	$ 92
Minimum
Significant accounting policies
Amortization period of prepaid bonuses and forgivable loans	2 years
Maximum
Significant accounting policies
Amortization period of prepaid bonuses and forgivable loans	4 years
Software revenue | Minimum
Significant accounting policies
Period for recognition of deferred revenue	1 year
Software revenue | Maximum
Significant accounting policies
Period for recognition of deferred revenue	5 years
Analytics revenue
Significant accounting policies
Period for recognition of deferred revenue	3 years
Market data subscription revenue | Minimum
Significant accounting policies
Period for recognition of deferred revenue	1 year
Market data subscription revenue | Maximum
Significant accounting policies
Period for recognition of deferred revenue	2 years
Property, equipment and leasehold improvements | Minimum
Significant accounting policies
Useful life	3 years
Property, equipment and leasehold improvements | Maximum
Significant accounting policies
Useful life	7 years
Software, including software development costs
Significant accounting policies
Useful life	3 years

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2015

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Basis of Presentation— The Company’s Condensed Consolidated Financial Statements (Unaudited) are prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingencies in the Condensed Consolidated Financial Statements. Certain estimates and assumptions relate to the accounting for acquired goodwill and intangible assets, fair value measurements, compensation accruals, tax liabilities and the potential outcome of litigation matters. Management believes that the estimates utilized in the preparation of the Condensed Consolidated Financial Statements are reasonable and prudent. Actual results could differ materially from these estimates.

Certain amounts in the Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current year presentation.

These Condensed Consolidated Financial Statements are unaudited and should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”). The condensed consolidated financial information as of December 31, 2014 presented in this Form 10-Q has been derived from audited Consolidated Financial Statements not included herein.

These unaudited Condensed Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These adjustments are of a normal, recurring nature. Interim period operating results may not be indicative of the operating results for a full year.

Consolidation Policies

Consolidation Policies

General— The Condensed Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and subsidiaries that are treated as such and other entities in which the Company has a controlling financial interest. For consolidated subsidiaries that are less than wholly-owned, equity interests that are not owned by the Company are referred to as non-controlling interests. The portion of net income attributable to non-controlling interests for such subsidiaries is presented as Net income attributable to non-controlling interests on the Condensed Consolidated Statements of Operations, and the portion of the stockholders’ equity of such subsidiaries is presented as Non-controlling interests in the Condensed Consolidated Statements of Financial Condition and Condensed Consolidated Statement of Changes in Stockholders’ Equity. All intercompany transactions and balances have been eliminated.

Variable Interest Entities—The Company determines whether it holds any interests in entities deemed to be a variable interest entity (“VIE”). A VIE is an entity that lacks one or more of the following characteristics (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The Company has a controlling financial interest and will consolidate a VIE if it is the primary beneficiary.

The primary beneficiary is the party that has both (i) the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and (ii) the obligation to absorb losses of the entity that could be potentially significant to the VIE or the right to receive benefits from the entity that could be potentially significant. As of March 31, 2015, the Company holds interests in certain VIEs. One of these VIEs is consolidated because it was determined that the Company is the primary beneficiary of this VIE because (1) the Company provided the majority of the VIE’s start-up capital and (2) the Company has consent rights regarding those activities that the Company believes would most significantly impact the economic performance of the entity. The remaining VIEs are not consolidated as it was determined that the Company is not the primary beneficiary due to the level of equity ownership and voting power.  The Company reassesses its evaluation of whether an entity is a VIE when certain events occur, such as changes in economic ownership and voting power.  The Company reassesses its determination of whether it is the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.  See Note 16 for disclosures on Variable Interest Entities.

Cash and Cash Equivalents

Cash and Cash Equivalents— Cash and cash equivalents consist of cash and highly liquid investments purchased with an original maturity of three months or less. Cash and cash equivalents are categorized within Level 1 of the fair value hierarchy.

Cash and Securities Segregated Under Federal and Other Regulations

Cash and Securities Segregated Under Federal and Other Regulations—The Company holds cash and securities representing funds received in connection with customer trading activities. The Company’s subsidiaries are required to satisfy regulations mandated by their primary regulators to segregate or set aside cash or equivalent securities to satisfy regulations, promulgated to protect customer assets.

Accounts Receivable

Accounts Receivable —Accounts receivable largely represents commissions due from brokers, dealers, banks and other financial and nonfinancial institutions for the execution of securities, commodities, foreign exchange and other derivative brokerage transactions. Also, included within Accounts receivable are the billed portion of existing contracts from customers related to the licensing, support and maintenance of software, analytics and market data, as well as any unbilled but earned portion of any services provided to such customers. In estimating the allowance for doubtful accounts, management considers the length of time receivables are past due and historical experience. In addition, if the Company is aware of a client’s inability to meet its financial obligations, a specific provision for doubtful accounts is recorded in the amount of the estimated losses that will result from the inability of that client to meet its financial obligation.

Receivables from and Payables to Brokers, Dealers and Clearing Organizations

Receivables from and Payables to Brokers, Dealers and Clearing Organizations—Receivables from and payables to brokers, dealers and clearing organizations primarily represent: (i) principal transactions for which the stated settlement dates have not yet been reached, (ii) principal transactions which have not settled as of their stated settlement dates, (iii) cash, including deposits, held at clearing organizations and exchanges in support of the Company’s clearing business and to facilitate settlement and clearance of matched principal transactions and (iv) the spread on matched principal transactions that have not yet been remitted from/to clearing organizations and exchanges.

Property, Equipment and Leasehold Improvements

Property, Equipment and Leasehold Improvements—Property, equipment and leasehold improvements are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method, generally over three to seven years. Property and equipment are depreciated over their estimated useful lives. Leasehold improvements are amortized over the shorter of the remaining term of the respective lease to which they relate or the remaining useful life of the leasehold improvement. Internal and external costs incurred in developing or obtaining computer software for internal use are capitalized in accordance with Accounting Standards Codification (“ASC”) 350 Intangibles—Goodwill and Other (“ASC 350”), and are amortized on a straight-line basis over the estimated useful life of the software, generally three years. General and administrative costs related to developing or obtaining such software are expensed as incurred.

Goodwill and Intangible Assets

Goodwill and Intangible Assets—Goodwill represents the excess of the purchase price allocation over the fair value of tangible and identifiable intangible net assets acquired. The goodwill associated with each business combination is allocated to the related reporting units, which are determined based on how the Company’s businesses are managed and how they are reviewed by the Company’s chief operating decision maker. Other intangible assets are recorded at their fair value upon completion of a business combination or certain other transactions. Substantially all of the firm’s identifiable intangible assets are considered to have definite lives and are amortized on a straight-line basis over their estimated useful lives.

In accordance with ASC 350, goodwill is not amortized, but instead is periodically tested for impairment. The Company reviews goodwill for impairment on an annual basis as of November 1 of each fiscal year or whenever an event occurs or circumstances change that could reduce the fair value of a reporting unit below its carrying amount. See Note 6 for further information.

Prepaid Bonuses and Forgivable Employee Loans

Prepaid Bonuses and Forgivable Employee Loans—Prepaid bonuses and forgivable loans to employees are stated at historical value net of amortization when the agreement between the Company and the employee provides for the return of proportionate amounts of the bonus or loan outstanding if employment is terminated in certain circumstances prior to the end of the term of the agreement. Amortization is calculated using the straight-line method over the term of the contract, which is generally two to four years, and is recorded in Compensation and employee benefits. The Company generally expects to recover the unamortized portion of prepaid bonuses and forgivable loans when employees voluntarily terminate their employment or if their employment is terminated for cause prior to the end of the term of the agreement. The prepaid bonuses and forgivable loans are included in Other assets in the Condensed Consolidated Statements of Financial Condition. At March 31, 2015 and December 31, 2014, the Company had prepaid bonuses of $15,905 and $16,523, respectively. At March 31, 2015 and December 31, 2014, the Company had forgivable employee loans and advances to employees of $15,022 and $15,072, respectively. Amortization of prepaid bonuses and forgivable employee loans for the three months ended March 31, 2015 and 2014 was $4,831 and $6,720, respectively and is included within Compensation and employee benefits.

Investments

Investments—When the Company does not have a controlling financial interest in an entity but can exert significant influence over the entity’s operating and financial policies, the investment is accounted for under the equity method of accounting in accordance with ASC 323-10, Investments—Equity Method and Joint Ventures (“ASC 323-10”). Significant influence generally exists when the Company owns 20% to 50% of the entity’s common stock or in-substance common stock. The Company initially records the investment at cost and adjusts the carrying amount each period to recognize its share of the earnings and losses of the investee based on the percentage of ownership. At March 31, 2015 and December 31, 2014, the Company had equity method investments with a carrying value of $12,842 and $13,184, respectively, included within Other assets. The Company also provides clearing and other administrative services to certain of these equity method investees.

Investments for which the Company does not have the ability to exert significant influence over operating and financial policies are generally accounted for using the cost method of accounting in accordance with ASC 325-10, Investments—Other (“ASC 325-10”). At March 31, 2015 and December 31, 2014, the Company had cost method investments of $1,533 and $1,688, respectively, included within Other assets.  The fair value of the Company’s cost method investments are not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value. The Company monitors its equity and cost method investments for indicators of impairment each reporting period.

The Company accounts for its marketable equity securities and its debt securities in accordance with ASC 320-10, Investments—Debt and Equity Securities (“ASC 320-10”). Investments that are owned by the Company’s broker-dealer subsidiaries are recorded at fair value with realized and unrealized gains and losses reported in net (loss) income. Investments designated as available-for-sale that are owned by the Company’s non broker-dealer subsidiaries are recorded at fair value with unrealized gains or losses reported as a separate component of other comprehensive (loss) income, net of tax.  The fair value of the Company’s available-for-sale securities was $98 and $0 as of March 31, 2015 and December 31, 2014, respectively, and is included within Other assets.

Fair Value of Financial Instruments

Fair Value of Financial Instruments—In accordance with ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), the Company estimates fair values of financial instruments using relevant market information and other assumptions. Fair value estimates involve uncertainties and matters of significant judgment in interpreting market data and, accordingly, changes in assumptions or in market conditions could adversely affect the estimates. The Company also discloses the fair value of its financial instruments in accordance with the fair value hierarchy as set forth by ASC 820-10. See Note 14 for further information.

Derivative Financial Instruments

Derivative Financial Instruments—The Company enters into derivative transactions for a variety of reasons, including managing its exposure to risk arising from changes in foreign currency, facilitating customer trading activities and, in certain instances, to engage in principal trading for the Company’s own account. Derivative assets and liabilities are carried on the Condensed Consolidated Statements of Financial Condition at fair value, with changes in the fair value recognized in the Condensed Consolidated Statements of Operations. Contracts entered into to manage risk arising from changes in foreign currency are recognized in Other income, net and contracts entered into to facilitate customer transactions and principal trading are recognized in Principal transactions. Derivatives are reported on a net-by-counterparty basis when management believes that a legal and enforceable right of offset exists under these agreements. See Note 15 for further information.

Payables to Clearing Services Customers

Payables to Clearing Services Customers—Payables to clearing services customers include amounts due on cash and margin transactions, including futures contracts transacted on behalf of customers.

Revenue Recognition

Revenue Recognition

Brokerage Transactions—The Company provides brokerage services to its clients in the form of either agency or principal transactions. In agency transactions, the Company charges commissions for executing transactions between buyers and sellers. Agency commission revenues and related expenses are recognized on a trade date basis. These revenues are presented in “Agency Commissions”.  Principal transactions revenue is primarily derived from matched principal and principal trading transactions. Principal transactions revenues and related expenses are recognized on a trade date basis. The Company earns revenue from principal transactions on the spread between the buy and sell price of the security that is brokered. In matched principal transactions, the Company simultaneously agrees to buy instruments from one customer and sell them to another customer. These revenues are presented in “Principal Transactions”.  In the normal course of its matched principal and principal trading businesses, the Company may hold security positions overnight. These positions are marked to market on a daily basis.

Clearing Services Revenues—The Company charges fees to customers for clearing services provided for cash and derivative transactions. Clearing services revenues are recorded on a trade date basis as customer transactions occur and are presented net of any customer negotiated rebates.

Software, Analytics and Market Data Revenue Recognition— Software revenue consists primarily of fees charged for Trayport electronic trading software, which are typically billed on a subscription basis and are recognized ratably over the term of the subscription period, which ranges from one to five years. Analytics revenue consists primarily of software license fees for Fenics pricing tools which are typically billed on a subscription basis, and is recognized ratably over the term of the subscription period, which is generally three years. Market data revenue primarily consists of subscription fees and fees from customized one-time sales. Market data subscription fees are recognized on a straight-line basis over the term of the subscription period, which ranges from one to two years. Market data revenue from customized one-time sales is recognized upon delivery of the data. The Company markets its software, analytics and market data products through its direct sales force and, in some cases, indirectly through resellers. In general, the Company’s license agreements for such products do not provide for a right of return.

Other Income, net—Included within Other income, net on the Company’s Condensed Consolidated Statements of Operations are revaluations of foreign currency derivative contracts, realized and unrealized transaction gains and losses on certain foreign currency denominated items, and gains and losses on certain investments, and interest income earned on short-term investments.

Compensation and Employee Benefits

Compensation and Employee Benefits—The Company’s compensation and employee benefits have both a fixed and variable component. Base salaries and benefit costs are primarily fixed for all employees while bonuses constitute the variable portion of compensation and employee benefits. The Company has historically paid certain performance bonuses in restricted stock units (“RSUs”).  All RSUs which were outstanding immediately prior to the completion of BGC’s tender offer were converted into the right to receive cash, subject to the terms of each award’s pre-existing vesting schedule.  During the three months ended March 31, 2015, the Company paid certain performance bonuses in deferred cash awards. The Company also may grant sign-on and retention bonuses for certain newly-hired or existing employees who agree to long-term employment agreements.

Share-Based Compensation

Share-Based Compensation—The Company’s share-based compensation had consisted of RSUs. The Company accounts for share-based compensation in accordance with ASC 718 Compensation— Stock Compensation (“ASC 718”). This accounting guidance requires measurement of compensation expense for equity-based awards at fair value and recognition of compensation expense over the service period, net of estimated forfeitures. In all periods presented, the only share-based compensation expense recognized by the Company has been RSUs. The Company determines the fair value of RSUs based on the number of units granted and the grant date fair value of the Company’s common stock, measured as of the closing price on the date of grant. As discussed in further detail in Note 11, during the first quarter of 2015, the Company converted all RSUs which were outstanding immediately prior to the completion of BGC’s tender offer into the right to receive cash, subject to the terms of each award’s pre-existing vesting schedule.

Deferred Cash Compensation

Deferred Cash Compensation—The Company accounts for deferred cash compensation in accordance with ASC 710 Compensation— General (“ASC 710”). This accounting guidance requires measurement of deferred compensation expense for non-equity-based awards based upon future amounts expected to be paid, and provides for recognition of compensation expense over the expected service period, net of estimated forfeitures. See Note 11 for further information.

Income Taxes

Income Taxes— In accordance with ASC 740, Income Taxes (“ASC 740”), the Company provides for income taxes using the asset and liability method under which deferred income taxes are recognized for the estimated future tax effects attributable to temporary differences and carryforwards that result from events that have been recognized either in the financial statements or the income tax returns, but not both. The measurement of current and deferred income tax assets and liabilities is based on provisions of enacted tax laws. Valuation allowances are recognized if, based on the weight of available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. Management applies the more likely than not criteria prior to recognizing a financial statement benefit for a tax position taken (or expected to be taken) in a tax return. The Company recognizes interest and/or penalties related to income tax matters in interest expense and other expense, respectively.

The Company recorded a benefit from income taxes of $12,392 for the three months ended March 31, 2015, as compared to a provision for income taxes of $1,094 for the three months ended March 31, 2014.  The change from provision for income taxes to benefit from income taxes was primarily due to an allowable U.S. income tax deduction as a result of the merger termination fee paid to CME following the termination of the CME Merger Agreement in January 2015. The effective tax rates for both periods were impacted by a geographical mix of pre-tax profits and losses.

Treasury Stock

Treasury Stock—The Company accounts for Treasury stock using the cost method. Treasury stock held by the Company may be reissued with respect to vested RSUs in qualified jurisdictions. The Company’s policy is to account for these shares as a reduction of Treasury stock on a first-in, first-out basis.

Foreign Currency Translation Adjustments and Transactions

Foreign Currency Translation Adjustments and Transactions— Assets and liabilities of foreign subsidiaries having non-U.S. dollar functional currencies are translated at the period end rates of exchange, and revenue and expenses are translated at the average rates of exchange for the period. Gains or losses resulting from translating foreign currency financial statements are reflected in foreign currency translation adjustments and are reported as a separate component of comprehensive (loss) income and included in accumulated other comprehensive income in the Condensed Consolidated Statement of Changes in Stockholders’ Equity. The revaluation of asset and liability balances that are denominated in currencies other than the functional currency of the business unit involved in such transactions is reflected in Other Income, net in the Condensed Consolidated Statements of Operations. Net losses resulting from remeasurement of foreign currency transactions and balances were $1,038 and $92 for the three months ended March 31, 2015 and 2014, respectively.

Recent Accounting Pronouncements

Recent Accounting Pronouncements—  In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 changes the criteria for disposals to qualify as discontinued operations and requires new disclosures about disposals of both discontinued operations and certain other disposals that do not meet the new definition. The guidance was effective for the Company’s fiscal year beginning January 1, 2015. The adoption of ASU 2014-08 has not had a material impact on the Company’s Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 defines how companies report revenues from contracts with customers, and also requires enhanced disclosures. The guidance is effective beginning in the first quarter of fiscal 2017. The Company is currently evaluating the impact of the new guidance on the Company’s Consolidated Financial Statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about the Company’s ability to continue as a going concern, and if so, to provide related footnote disclosures. The guidance is effective for the Company’s 2016 annual financial statements. The Company is currently evaluating the impact of the new guidance on the Company’s Consolidated Financial Statements.

In November 2014, the FASB issued ASU No. 2014-17, Business Combinations  (Topic 805) - Pushdown Accounting (“ASU 2014-17”). ASU 2014-17 provides an acquired entity the option of applying pushdown accounting in its stand-alone financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The Company adopted this guidance on November 18, 2014, the effective date of ASU 2014-17.  In conjunction with the Company’s February 2015 acquisition by BGC, the Company has elected not to apply pushdown accounting on the Condensed Consolidated Financial Statements for the three months ended March 31, 2015, the reporting period in which the change-in-control event occurred.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 eliminates the deferral of certain consolidation standards for entities considered to be investment companies and modifies the consolidation analysis performed on certain types of legal entities. The guidance is effective beginning in the first quarter of fiscal 2017 and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its Condensed Consolidated Financial Statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be reported on the Consolidated Statements of Financial Condition as a direct deduction from the carrying amount of that debt liability. The guidance is effective for the Company retrospectively beginning in the first quarter of fiscal 2017 and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its Condensed Consolidated Financial Statements.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2015

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS.

20.    SUBSEQUENT EVENTS

Delisting and Deregistration of GFI common stock

The Company’s common stock was delisted on the NYSE on April 10, 2015 and the Company expects to file a Form 15 with the SEC to effect the deregistration of the common stock. The Company expects the deregistration of the common stock to become effective 90 days after filing the Form 15 with the SEC.

Related party transactions

In April 2015, the Company provided a loan to BGC in the amount of $9,250, which bears interest of 3.75% per annum and is payable on demand.

Under rules adopted by the U.S. CFTC, all foreign introducing brokers engaging in transactions with U.S. persons are required to register with the National Futures Association and either meet financial reporting and net capital requirements on an individual basis or obtain a guarantee agreement from a registered Futures Commission Merchant. The Company’s European-based brokers engage from time to time in interest rate swap transactions with U.S.-based counterparties, and therefore the Company is subject to these CFTC requirements. In April 2015, Cantor Fitzgerald & Co. (“CF&Co”), an affiliate of BGC, the Company’s controlling stockholder, has entered into guarantees on the Company’s and the Company is required to indemnify CF&Co for the amounts, if any, paid by CF&Co pursuant to this arrangement.

On April 28 2015, the Company issued 43,029,260 shares (the “New Shares”) of its common stock to BGC at that dates closing price of $5.81 per share, for an aggregate purchase price of $250,000.  The purchase price was paid to the Company in the form of a Note due on June 19, 2018 which bears an interest rate of LIBOR plus 200 basis points. The Company expects that any funds received in payment of the principal of the note would be earmarked for repayment of the Company’s 8.375% Senior Notes or potentially be the basis of collateral with respect to the 8.375% Senior Notes. Following the issuance of the New Shares, BGC owns approximately 67% of the Company’s outstanding common stock.

Other subsequent events

The Company and BGC announced that they have retained CF&Co to assist in the potential sale of our Trayport subsidiary.

In April 2015, GFI entered into a fourth amendment to the Credit Agreement, whereby the minimum consolidated capital the Company is required to maintain was adjusted to $215,000.  See Note 8 for further information.

In April 2015, the Company’s Board of Directors authorized the Company to repurchase up to $50,000 of the Company’s common stock and 8.375% Senior Notes.

On April 29, 2015, S&P raised its credit rating on the Company’s 8.375% Senior Notes four notches to BB+, following the announcement that BGC gained the two-thirds ownership necessary to effect the full merger of GFI. See Note 20 under “Related party transactions” for further information on GFI’s issuance of shares to BGC. S&P indicated its rating on the Company’s 8.375% Senior Notes remained on CreditWatch with positive implications. On May 6, 2015, Fitch increased its credit rating on the Company’s 8.375% Senior Notes four notches to BB+ and has also removed the Company’s 8.375% Senior Notes rating  the from Rating Watch Positive and assigned a Positive Rating Outlook, following the purchase of additional GFI shares by BGC. The recent upgrades from S&P and Fitch will lower the Company’s interest rate by 100 basis points. Any upgrade from Moody’s could also lower the Company’s rate on the Senior Notes up to a maximum of 50 basis points.

Subsequent events have been evaluated for recording and disclosure in the notes to the Consolidated Financial Statements through the filing date of this Form 10-Q.

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COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Purchase Obligations
Other purchase commitments	$ 4,574
Other purchase commitments due within the next twelve months	2,920
Market data
Purchase Obligations
Total purchase commitments	18,898
Purchase commitments due within the next twelve months	15,792
Purchase commitments due between one to three years	2,839
Purchase commitments due between three and five years	267
Hosting and software license agreements
Purchase Obligations
Other purchase commitments	4,023
Network upgrades
Purchase Obligations
Other purchase commitments	$ 551

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DISPOSALS AND ASSETS AND LIABILITIES HELD FOR SALE (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Jan. 24, 2015	Feb. 03, 2015
Assets.
Total assets held for sale	$ 23,254	$ 193,701
Liabilities
Total liabilities held for sale	18,153	161,914
KGL
ASSETS AND LIABILITIES HELD FOR SALE
Percentage of equity ownership disposed			100.00%
Impairment charges of long-lived assets held for sale		4,061
Assets.
Cash and cash equivalents		24,957
Cash and securities segregated under federal and other regulations		52,160
Accounts receivable, net		1,348
Receivables from brokers, dealers and clearing organizations		90,634
Property, equipment and leasehold improvements, net		1,944
Intangible assets, net		4,302
Other assets		680
Asset impairment		(4,061)
Total assets held for sale		171,964
Liabilities
Accrued compensation		1,545
Accounts payable and accrued expenses		849
Payables to clearing services customers		142,108
Other liabilities		1,397
Total liabilities held for sale		145,899
KBL
ASSETS AND LIABILITIES HELD FOR SALE
Percentage of equity ownership disposed				100.00%
Impairment of long-lived assets held for sale	0
Assets.
Cash and cash equivalents	12,238	13,172
Accounts receivable, net	8,664	7,398
Receivables from brokers, dealers and clearing organizations	2,040	659
Property, equipment and leasehold improvements, net	157	178
Other assets	155	330
Total assets held for sale	23,254	21,737
Liabilities
Accounts payable and accrued expenses	18,012	15,990
Other liabilities	141	25
Total liabilities held for sale	18,153	16,015
Eliminations | KGL
Assets.
Other assets		(570)
Liabilities
Payables to clearing services customers		$ (12,499)

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DISPOSALS AND ASSETS AND LIABILITIES HELD FOR SALE (Tables)

3 Months Ended

Mar. 31, 2015

KGL

ASSETS AND LIABILITIES HELD FOR SALE

Schedule of major classes of consolidated assets and liabilities classified as held for sale

	December 31,
	2014
Assets
Cash and cash equivalents	$	24,957
Cash and securities segregated under federal and other regulations	52,160
Accounts receivable, net	1,348
Receivables from brokers, dealers and clearing organizations	90,634
Property, equipment and leasehold improvements, net	1,944
Intangible assets, net	4,302
Other assets (1)	680
Asset impairment	(4,061		)
Total assets held for sale	$	171,964
Liabilities
Accrued compensation	1,545
Accounts payable and accrued expenses	849
Payables to clearing services customers (2)	142,108
Other liabilities	1,397
Total liabilities held for sale	$	145,899

(1) Excludes $570 of receivables from consolidated affiliates that has been eliminated for the purposes of presentation on the Consolidated Statement of Financial Condition.

(2) Excludes $12,499 of payables to consolidated affiliates that has been eliminated for the purposes of presentation on the Consolidated Statement of Financial Condition.

KBL

ASSETS AND LIABILITIES HELD FOR SALE

Schedule of major classes of consolidated assets and liabilities classified as held for sale

	March 31,		December 31,
	2015		2014
Assets
Cash and cash equivalents	$	12,238	$	13,172
Accounts receivable, net	8,664		7,398
Receivables from brokers, dealers and clearing organizations	2,040		659
Property, equipment and leasehold improvements, net	157		178
Other assets	155		330
Total assets held for sale	$	23,254	$	21,737
Liabilities
Accounts payable and accrued expenses	18,012		15,990
Other liabilities	141		25
Total liabilities held for sale	$	18,153	$	16,015

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RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS (Tables)

3 Months Ended

Mar. 31, 2015

RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS

Schedule of amounts receivable from and payable to brokers, dealers and clearing organizations

	March 31, 2015		December 31, 2014
Receivables from brokers, dealers and clearing organizations:
Contract value of fails to deliver	$	1,061,593	$	458,718
Receivables from and deposits with clearing organizations and financial institutions (1)	59,875		48,630
Net pending trades	—		253
Total	$	1,121,468	$	507,601
Payables to brokers, dealers and clearing organizations:
Contract value of fails to receive	$	1,045,537	$	462,747
Payables to clearing organizations and financial institutions	13,380		496
Net pending trades	2,955		—
Total	$	1,061,872	$	463,243

(1) Excluded from the March 31, 2015 balance is $2,040 of Receivables from and deposits with clearing organizations and financial institutions related to KBL. Excluded from the December 31, 2014 balance is $91,293 of Receivables from and deposits with clearing organizations and financial institutions related to KGL and KBL. As discussed in Note 4, such amounts are included in Assets held for sale.

Schedule of cash and securities segregated under federal and other regulations or Receivables from brokers, dealers and clearing organizations

	December 31, 2014
Cash and cash equivalents	11,162
Cash segregated under federal and other regulations	52,160
Receivables from brokers, dealers, and clearing organizations	78,786
Total	$	142,108

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Thousands, unless otherwise specified	Total Stockholders' Equity	Common Stock	Additional Paid In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Loss	Non-Controlling Interests	Total
Balance at Dec. 31, 2014	$ 294,228	$ 1,442	$ 399,774	$ (73,445)	$ (31,050)	$ (2,493)	$ 1,906	$ 296,134
Increase (Decrease) in Stockholders' Equity
Issuance of treasury stock			(77)	77
Issuance of common stock for exercise of stock options and vesting of restricted stock units	(439)	2	(441)					(439)
Withholding of restricted stock units in satisfaction of tax requirements	(572)		(572)					(572)
Tax expense associated with share-based awards	8		8					8
Foreign currency translation adjustment	(5,793)					(5,793)	(457)	(6,250)
Share-based compensation	3,276		3,276					3,276
Conversion of restricted stock units to deferred cash awards	(22,244)		(22,244)					(22,244)
Other capital adjustments	(14)		(14)				(1)	(15)
Net (loss) income	(19,923)				(19,923)		776	(19,147)
Balance at Mar. 31, 2015	$ 248,527	$ 1,444	$ 379,710	$ (73,368)	$ (50,973)	$ (8,286)	$ 2,224	$ 250,751

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GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2015

GOODWILL AND INTANGIBLE ASSETS

Schedule of changes in the carrying amount of the Company's goodwill

	December 31, 2014		Goodwill acquired		Impairment charges		Adjustments		Foreign currency translation			March 31, 2015
Goodwill
All other	134,542		—		—		—		(184		)	134,358
	$	134,542	$	—	$	—	$	—	$	(184	)	$	134,358

Schedule of intangible assets

	March 31, 2015						December 31, 2014
	Gross amount		Accumulated amortization and foreign currency translation		Net carrying value		Gross amount		Accumulated amortization and foreign currency translation		Net carrying value (1)
Amortized intangible assets:
Customer relationships	$	62,334	$	40,604	$	21,730	$	62,334	$	39,203	$	23,131
Trade names	7,904		6,851		1,053		7,904		6,750		1,154
Core technology	8,697		4,508		4,189		8,697		4,105		4,592
Non-compete agreements	3,756		3,434		322		3,756		3,429		327
Patents	3,131		1,844		1,287		3,131		1,719		1,412
Other	647		386		261		647		358		289
Total	$	86,469	$	57,627	$	28,842	$	86,469	$	55,564	$	30,905

(1) Excluded from net carrying value as of December 31, 2014 is $3,715 of customer relationships,  $576 of trade names and $11 of non-compete agreements with indefinite useful lives related to KGL that were  held for sale. As discussed in Note 4, such amounts were included in Assets held for sale as of December 31, 2014 prior to the disposal of KGL during the first quarter of 2015.

Schedule of expected amortization expense for the definite lived intangible assets

2015	$	4,842
2016	5,941
2017	4,117
2018	3,298
2019	3,081
Thereafter	7,563
Total	$	28,842

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SEGMENT AND GEOGRAPHIC INFORMATION (Tables)

3 Months Ended

Mar. 31, 2015

SEGMENT AND GEOGRAPHIC INFORMATION

Schedule of financial information for the Company's reportable segments

	Three Months Ended March 31, 2015
	Americas Brokerage		EMEA Brokerage		Asia Brokerage		Clearing and Backed Trading		All Other			Total
Total revenues	$	57,552	$	84,500	$	20,757	$	28,253	$	40,460		$	231,522
Revenues, net of interest and transaction-based expenses	54,926		81,654		20,663		7,217		41,156			205,616
Income (loss) before income taxes	16,480		27,622		7,659		1,301		(84,601		)	(31,539		)

	Three Months Ended March 31, 2014
	Americas Brokerage		EMEA Brokerage		Asia Brokerage		Clearing and Backed Trading		All Other			Total
Total revenues	$	61,698	$	89,300	$	19,223	$	44,293	$	26,225		$	240,739
Revenues, net of interest and transaction-based expenses	58,752		86,427		19,103		11,140		27,005			202,427
Income (loss) before income taxes	14,342		28,704		5,632		931		(44,106		)	5,503

Schedule of geographic information regarding revenues and long-lived assets

	Three Months Ended  March 31,
	2015		2014
Revenues:
United States	$	68,766	$	63,213
United Kingdom	107,351		124,305
Other	55,405		53,221
Total	$	231,522	$	240,739
	Three Months Ended  March 31,
	2015		2014
Revenues, net of interest and transaction-based expenses:
United States	$	67,937	$	62,096
United Kingdom	83,942		89,819
Other	53,737		50,512
Total	$	205,616	$	202,427

	March 31, 2015		December 31, 2014
Long-lived Assets, as defined:
United States	$	47,262	$	48,506
United Kingdom	6,935		6,976
Other	2,960		3,850
Total (1)	$	57,157	$	59,332

(1) Excluded from the March 31, 2015 balance is $157 of Property, equipment, leasehold improvements, net related to KBL. Excluded from the December 31, 2014 balance is $2,122 of Property, equipment, leasehold improvements, net related to KGL and KBL.  As discussed in Note 4, such amounts are included in Assets held for sale.

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LOSS PER SHARE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Basic earnings per share
GFI'S net (loss) income	$ (19,923)	$ 4,003
Weighted average common shares outstanding	127,339,178	122,362,839
Basic (loss) earnings per share (in dollars per share)	$ (0.16)	$ 0.03
Diluted earnings per share
GFI'S net (loss) income	$ (19,923)	$ 4,003
Weighted average common shares outstanding	127,339,178	122,362,839
Effect of dilutive options, RSUs and other contingently issuable shares		9,067,862
Weighted average shares outstanding and common stock equivalents	127,339,178	131,430,701
Diluted (loss) earnings per share (in dollars per share)	$ (0.16)	$ 0.03
LOSS PER SHARE
Contingently issuable shares excluded from computation of diluted loss per share as a result of net loss	1,171,879
Contingently issuable shares included in computation of diluted earnings per share		1,171,879
Stock options
LOSS PER SHARE
Securities excluded from computation of diluted loss per share as a result of net loss (in shares)		16,844
RSUs
LOSS PER SHARE
Securities excluded from computation of diluted loss per share as a result of net loss (in shares)		286,014

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SUBSEQUENT EVENTS (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	1 Months Ended	0 Months Ended
	Apr. 10, 2015	Apr. 30, 2015	Apr. 28, 2015	Apr. 29, 2015	Mar. 31, 2015	Dec. 31, 2014	Jul. 31, 2011	Jul. 31, 2014
Subsequent events
SUBSEQUENT EVENTS
Number of expected days between filing Form 15 and effective date of deregistration	90 days
Maximum amount of common stock and 8.375% Senior Notes authorized for repurchase		$ 50,000
BGC
SUBSEQUENT EVENTS
Receivable for loan, current					60,000
Ownership interest by related party (as a percent)					56.00%
BGC | Subsequent events
SUBSEQUENT EVENTS
Ownership interest by related party (as a percent)			67.00%
Ownership percentage necessary to effect full merger			66.67%
BGC | Subsequent events | Common Stock
SUBSEQUENT EVENTS
Shares issued			43,029,260
Share price			$ 5.81
Aggregate purchase price			250,000
BGC | April 2015 Loan receivable, due on demand | Subsequent events
SUBSEQUENT EVENTS
Receivable for loan, current		9,250
Interest rate (as a percent)		3.75%
BGC | BCG Note | Subsequent events | LIBOR
SUBSEQUENT EVENTS
Basis spread (as a percent)			2.00%
8.375% senior notes
SUBSEQUENT EVENTS
Interest rate (as a percent)			8.375%	8.375%	8.375%	8.375%	8.375%
8.375% senior notes | Subsequent events | S&P and Fitch
SUBSEQUENT EVENTS
Percentage point decrease in interest rate due to upgrade in credit rating				1.00%
8.375% senior notes | Subsequent events | Moody's
SUBSEQUENT EVENTS
Maximum percentage point decrease in interest rate if upgrade in credit rating				0.50%
8.375% senior notes | Subsequent events | Fitch, BB+ Rating
SUBSEQUENT EVENTS
Number of notches credit rating raised				4
8.375% senior notes | Subsequent events | S&P, BB+ Rating
SUBSEQUENT EVENTS
Number of notches credit rating raised				4
Credit Agreement
SUBSEQUENT EVENTS
Minimum consolidated capital under debt agreement								375,000
Credit Agreement | Subsequent events
SUBSEQUENT EVENTS
Minimum consolidated capital under debt agreement		$ 215,000

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 131,870	$ 183,432
Cash and securities segregated under federal and other regulations	157	163
Accounts receivable, net of allowance for doubtful accounts of $1,806 and $1,900 at March 31, 2015 and December 31, 2014, respectively	92,838	82,748
Receivables from brokers, dealers and clearing organizations	1,121,468	507,601
Property, equipment and leasehold improvements, net of depreciation and amortization of $200,728 and $196,237 at March 31, 2015 and December 31, 2014, respectively	53,743	55,897
Goodwill	134,358	134,542
Intangible assets, net	28,842	30,905
Receivables from related parties	60,256	232
Other assets	193,859	172,721
Assets held for sale	23,254	193,701
TOTAL ASSETS	1,840,645	1,361,942
LIABILITIES
Accrued compensation	89,274	88,590
Accounts payable and accrued expenses	37,736	31,791
Payables to brokers, dealers and clearing organizations	1,061,872	463,243
Short-term borrowings	60,000	10,000
Long-term debt	240,000	240,000
Other liabilities	82,859	70,270
Liabilities held for sale	18,153	161,914
Total Liabilities	1,589,894	1,065,808
Commitments and contingencies (Note 12)
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value; 5,000,000 shares authorized, none outstanding at March 31, 2015 and December 31, 2014
Common stock, $0.01 par value; 400,000,000 shares authorized; 144,480,612 and 144,290,612 shares issued at March 31, 2015 and December 31, 2015, respectively	1,444	1,442
Additional paid in capital	379,710	399,774
Retained deficit	(50,973)	(31,050)
Treasury stock, 16,695,060 and 16,724,843 shares of common stock at cost, at March 31, 2015 and December 31, 2014, respectively	(73,368)	(73,445)
Accumulated other comprehensive loss	(8,286)	(2,493)
Total Stockholders' Equity	248,527	294,228
Non-controlling interests	2,224	1,906
Total Equity	250,751	296,134
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,840,645	$ 1,361,942

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RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Receivables from brokers, dealers and clearing organizations:
Contract value of fails to deliver	$ 1,061,593	$ 458,718
Receivables from and deposits with clearing organizations and financial institutions	59,875	48,630
Net pending trades		253
Total	1,121,468	507,601
Payables to brokers, dealers and clearing organizations:
Contract value of fails to receive	1,045,537	462,747
Payables to clearing organizations and financial institutions	13,380	496
Net pending trades	2,955
Total	1,061,872	463,243
KGL and KBL
Receivables from brokers, dealers and clearing organizations:
Receivables from brokers, dealers and clearing organizations		91,293
KBL
Receivables from brokers, dealers and clearing organizations:
Receivables from brokers, dealers and clearing organizations	$ 2,040	$ 659

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Unrealized loss on available-for-sale securities, benefit from income taxes	$ 0	$ 341

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets
Other assets: Financial instruments owned:	$ 5,302	$ 3,865
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	2,166	1,387
Excluded portion | Payables to brokers, dealers and clearing organizations
Liabilities
Margin on long derivative contracts related to exchange traded futures	335	256
Fair value measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets
Other assets: Financial instruments owned:	1,588	1,452
Total	1,588	1,452
Fair value measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities
Assets
Other assets: Financial instruments owned:	247
Fair value measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivative contracts
Assets
Other assets: Financial instruments owned:	1,341	1,452
Netting	(651)	(338)
Liabilities
Netting	(651)	(338)
Fair value measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange derivative contracts
Assets
Other assets: Financial instruments owned:	342	592
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	57
Fair value measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity derivative contracts
Assets
Other assets: Financial instruments owned:	1,650	1,198
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	594	338
Fair value measured on a recurring basis | Significant Other Observable Inputs (Level 2)
Assets
Other assets: Financial instruments owned:	3,714	2,413
Total	3,714	2,413
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	2,166	1,387
Total	2,166	1,387
Fair value measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Equity securities
Assets
Other assets: Financial instruments owned:	94	232
Fair value measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Derivative contracts
Assets
Other assets: Financial instruments owned:	3,620	2,181
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	2,166	1,387
Fair value measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Foreign exchange derivative contracts
Assets
Other assets: Financial instruments owned:	3,620	2,181
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	2,166	1,387
Fair value measured on a recurring basis | Significant Unobservable Inputs (Level 3)
Liabilities
Other liabilities: Contingent consideration		348
Total		348
Fair value measured on a recurring basis | Total
Assets
Other assets: Financial instruments owned:	5,302	3,865
Total	5,302	3,865
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	2,166	1,387
Other liabilities: Contingent consideration		348
Total	2,166	1,735
Fair value measured on a recurring basis | Total | Equity securities
Assets
Other assets: Financial instruments owned:	341	232
Fair value measured on a recurring basis | Total | Derivative contracts
Assets
Other assets: Financial instruments owned:	4,961	3,633
Netting	(651)	(338)
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	2,166	1,387
Netting	(651)	(338)
Fair value measured on a recurring basis | Total | Foreign exchange derivative contracts
Assets
Other assets: Financial instruments owned:	3,962	2,773
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	2,223	1,387
Fair value measured on a recurring basis | Total | Commodity derivative contracts
Assets
Other assets: Financial instruments owned:	1,650	1,198
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:	$ 594	$ 338

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(LOSS) EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2015

(LOSS) EARNINGS PER SHARE

Schedule of basic and diluted (loss) earnings per share

	Three Months Ended March 31,
	2015			2014
Basic (loss) earnings per share
GFI’s net (loss) income	$	(19,923	)	$	4,003
Weighted average common shares outstanding	127,339,178			122,362,839
Basic (loss) earnings per share	$	(0.16	)	$	0.03
Diluted (loss) earnings per share
GFI’s net (loss) income	$	(19,923	)	$	4,003
Weighted average common shares outstanding	127,339,178			122,362,839
Effect of dilutive options, RSUs, and other contingently issuable shares	—			9,067,862
Weighted average shares outstanding and common stock equivalents	127,339,178			131,430,701
Diluted (loss) earnings per share	$	(0.16	)	$	0.03

Schedule of securities excluded from the computation of diluted earnings per share because their effect would be anti-dilutive

	Three Months Ended March 31,
	2014
Stock Options	$	16,844
RSUs	286,014

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DERIVATIVE FINANCIAL INSTRUMENTS (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Foreign exchange derivative contracts | Other income, net
Effect of derivative contracts on the Condensed Consolidated Statements
Amount of Gain (Loss) Recognized in Income on Derivatives	$ 3,601	$ 202
Foreign exchange derivative contracts | Principal transactions
Effect of derivative contracts on the Condensed Consolidated Statements
Amount of Gain (Loss) Recognized in Income on Derivatives	1,074	93
Foreign exchange derivative contracts | Derivatives not designated as hedging instruments
Effect of derivative contracts on the Condensed Consolidated Statements
Amount of Gain (Loss) Recognized in Income on Derivatives	4,675	295
Commodity derivative contracts | Derivatives not designated as hedging instruments | Principal transactions
Effect of derivative contracts on the Condensed Consolidated Statements
Amount of Gain (Loss) Recognized in Income on Derivatives	2,881	1,753
Fixed income derivative contracts | Derivatives not designated as hedging instruments | Principal transactions
Effect of derivative contracts on the Condensed Consolidated Statements
Amount of Gain (Loss) Recognized in Income on Derivatives	1,587	3,130
Equity derivative contracts | Other income, net
Effect of derivative contracts on the Condensed Consolidated Statements
Amount of Gain (Loss) Recognized in Income on Derivatives		(14)
Equity derivative contracts | Principal transactions
Effect of derivative contracts on the Condensed Consolidated Statements
Amount of Gain (Loss) Recognized in Income on Derivatives	164	21
Equity derivative contracts | Derivatives not designated as hedging instruments
Effect of derivative contracts on the Condensed Consolidated Statements
Amount of Gain (Loss) Recognized in Income on Derivatives	$ 164	$ 7

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FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2015

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

14.     FAIR VALUE OF FINANCIAL INSTRUMENTS

Certain of the Company’s financial assets and liabilities are carried at fair value, and are measured at fair value on a recurring basis. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Financial instruments owned and Financial instruments sold, not yet purchased are recorded at fair value, and included in Other assets and Other liabilities, respectively. Contingent consideration, if any, is also recorded at fair value, and included in Other liabilities. The Company’s investments that are accounted for under the cost and equity methods are investments in companies that are not publicly traded and for which no established market for their securities exists. The fair value of these investments is only estimated if there are identified events or changes in circumstances that may have a significant adverse effect on the carrying value of the investment.

The Company’s financial assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with ASC 820-10. In accordance with ASC 820-10, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.

Level 1—Financial assets and liabilities whose values are based on unadjusted quoted prices for identifiable assets or liabilities in an active market that the company has the ability to access at the measurement date (examples include active exchange-traded equity securities, listed derivatives, and most U.S. Government and agency securities).

Level 2—Financial assets and liabilities whose values are based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. Level 2 inputs include the following:

· Quoted prices for identifiable or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds which trade infrequently); and

· Inputs other than quoted prices that are observable for substantially the full term of the asset or liability (examples include interest rate and currency swaps).

Level 3—Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

Valuation Techniques

A description of the valuation techniques applied to the Company’s major categories of assets and liabilities measured at fair value on a recurring basis are as follows:

U.S. Treasury Securities - U.S. Treasury securities are valued using quoted market prices. Valuation adjustments are not applied.

Accordingly, U.S. Treasury securities are generally categorized in Level 1 of the fair value hierarchy.

Equity Securities - Equity securities include mostly exchange-traded securities and are valued based on quoted market prices. Accordingly, exchange-traded equity securities are generally categorized in Level 1 of the fair value hierarchy.  Non-exchange traded equity securities are measured primarily using broker quotations, pricing service data from external providers and prices observed for recently executed market transactions. Non-exchange traded equity securities are generally categorized within Level 2 of the fair value hierarchy.

Corporate Bonds — Corporate bonds are measured primarily using broker quotations, pricing service data from external providers and prices observed for recently executed market transactions. Corporate bonds are generally categorized in Level 2 of the fair value hierarchy.

Foreign government bonds — Foreign government bonds are mostly valued using quoted market prices. Accordingly, foreign government bonds are generally categorized in Level 1 or Level 2 of the fair value hierarchy.

Derivative Contracts — Derivative contracts include instruments such as foreign exchange, commodity, fixed income and equity derivative contracts.

Listed Derivative Contracts - Listed derivatives that are actively traded are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy.

OTC Derivative Contracts — Over-the-counter (“OTC”) derivative contracts include forwards, swaps, and options contracts related to foreign currencies. Depending on the product and the terms of the transaction, the fair value of OTC derivative products can be either observed or modeled using a series of techniques and model inputs from comparable benchmarks, including closed-form analytic formulas, such as the Black-Scholes option-pricing model, and simulation models or a combination thereof.  Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgment, and the pricing inputs are observed from actively quoted markets. In the case of more established derivative products, the pricing models used by the Company are widely accepted by the financial services industry. OTC derivative products valued by the Company using pricing models generally fall into this category and are categorized in Level 2 of the fair value hierarchy.

Equity warrants -  Non-exchange traded equity warrants are classified within Level 3 of the fair value hierarchy and are measured using the Black-Scholes model with key inputs impacting the valuation including the underlying security price, implied volatility, dividend yield, interest rate curve, strike price and maturity date.

Contingent Consideration — The category consists primarily of contingent consideration related to one of the Company’s acquisitions.

On November 14, 2013, the Company completed the acquisition of Contigo Limited, a provider of trading, portfolio risk management and logistics software for the energy industry. This contingent liability, which was settled in cash during March 2015, had been remeasured at fair value principally based on the acquired business’ future financial performance, including revenues and operating margins, from May 1, 2014 through the settlement date.

The inputs used in estimating the fair value of these contingent considerations were both unobservable and significant to the overall fair value measurement of this liability, therefore the liability was categorized in Level 3 of the fair value hierarchy.

In the three months ended March 31, 2015 and 2014, the Company did not have any material transfers among Level 1, Level 2, and Level 3.

Financial Assets and Liabilities measured at fair value on a recurring basis as of March 31, 2015 are as follows:

	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at March 31, 2015
Assets
Other assets: Financial instruments owned:
Equity securities	$	247		$	94	$	—	$	341
Derivative contracts:
Foreign exchange derivative contracts	$	342		$	3,620	$	—	$	3,962
Commodities derivative contracts	1,650			—		—		1,650
Netting (1)	(651		)	—		—		(651		)
Total derivative contracts	$	1,341		$	3,620	$	—	$	4,961
Total financial instruments owned	$	1,588		$	3,714	$	—	$	5,302
Total	$	1,588		$	3,714	$	—	$	5,302
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:
Derivative contracts:
Foreign exchange derivative contracts	$	57		$	2,166	$	—	$	2,223
Commodities derivative contracts	594			—		—		594
Netting (1)	(651		)	$	—	$	—	$	(651	)
Total derivative contracts	$	—		$	2,166	$	—	$	2,166
Total financial instruments sold, not yet purchased	$	—		$	2,166	$	—	$	2,166
Total	$	—		$	2,166	$	—	$	2,166

(1) Represents the impact of netting on a net-by-counterparty basis.

Excluded from the table above is variation margin on long derivative contracts related to exchange traded futures in the amount of $335 included within Payables to brokers, dealers and clearing organizations.

Financial Assets and Liabilities measured at fair value on a recurring basis as of December 31, 2014 are as follows:

	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2014
Assets
Other assets: Financial instruments owned:
Equity securities	$	—		$	232	$	—	$	232
Derivative contracts:
Foreign exchange derivative contracts	$	592		$	2,181	$	—	$	2,773
Commodities derivative contracts	1,198			—		—		1,198
Netting (1)	(338		)		—	—			(338	)
Total derivative contracts	$	1,452		$	2,181	$	—	$	3,633
Total financial instruments owned	$	1,452		$	2,413	$	—	$	3,865
Total	$	1,452		$	2,413	$	—	$	3,865
Liabilities
Other liabilities: Financial instruments sold, not yet purchased:
Derivative contracts:
Foreign exchange derivative contracts	$	—		$	1,387	$	—	$	1,387
Commodities derivative contracts	$	338		$	—	$	—	$	338
Netting (1)	(338		)	—		—		(338		)
Total derivative contracts	$	—		1,387		—		1,387
Total financial instruments sold, not yet purchased	$	—		$	1,387	$	—	$	1,387
Other liabilities: Contingent consideration	$	—		$	—	$	348	$	348
Total	$	—		$	1,387	$	348	$	1,735

(1) Represents the impact of netting on a net-by-counterparty basis.

Excluded from the table above is variation margin on long derivative contracts related to exchange traded futures in the amount of $256 included within Payables to brokers, dealers and clearing organizations.

Changes in Level 3 Financial Assets and Liabilities measured at fair value on a recurring basis for the three months ended March 31, 2015 are as follows:

	Opening Balance		Total realized and unrealized losses included in Net loss (1)		Unrealized gains (losses) included in Other comprehensive loss		Purchases		Issues		Sales		Settlements		Closing Balance at March 31, 2015		Unrealized gains (losses) for Level 3 Assets / Liabilities Outstanding at March 31, 2015
Liabilities
Other liabilities:
Contingent consideration:	$	348	$	115	$	—	$	—	$	—	$	—	$	(463)	$	—	$	—

(1) Realized and unrealized gains (losses) are reported in Other income, net in the Condensed Consolidated Statements of Operations.

Changes in Level 3 Financial Assets and Liabilities measured at fair value on a recurring basis for the three months ended March 31, 2014 are as follows:

	Opening Balance		Total realized and unrealized losses included in Net loss (1)			Unrealized losses included in Other comprehensive income		Purchases		Issuances		Sales		Settlements		Closing Balance at March 31, 2014		Unrealized gains (losses) for Level 3 Assets / Liabilities Outstanding at March 31, 2014
Assets
Other assets:
Financial instruments owned:
Equity derivative contracts	$	14	$	(14	)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Liabilities
Other liabilities:
Contingent consideration	$	4,317	$	28		$	27	$	—	$	—	$	—	$	—	$	4,372	$	28

(1) Realized and unrealized gains (losses) are reported in Other income, net in the Condensed Consolidated Statements of Operations.

The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurement of Level 3 Assets and Liabilities measured at fair value on a recurring basis, as of December 31, 2014:

	Fair Value as of December 31, 2014		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average) (a)
Liabilities
Contingent consideration	$	348	Present value of expected payments	Discount rate		17	%
				Forecasted financial information		(b)

(a) As December 31, 2014, contingent consideration consisted of one liability.

(b) The Company’s estimate of contingent consideration as of December 31, 2014was principally based on the acquired business’ projected future financial performance, including revenues and operating margins from May 1, 2014 through April 30, 2015.

Valuation Processes—Level 3 Measurements—Depending on the instrument, the Company utilizes a valuation technique, including discounted cash flow methods, option pricing methods and present value methods, as indicated above. Valuations are generally conducted by the Company, with consultation of a third-party valuation expert to develop the valuation model when the asset or liability is initially recorded. Each reporting period, the Company updates unobservable inputs utilizing relevant published information, where applicable. The Company has a formal process to review changes in fair value for satisfactory explanation.

Sensitivity Analysis—Level 3 Measurements

Contingent consideration – The significant unobservable inputs used in the fair value in the Company’s contingent consideration are the discount rate and forecasted financial information.  Significant increases (decreases) in the discount rate would have resulted in a lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information would have resulted in a higher (lower) fair value measurement.

For all significant unobservable inputs used in the fair value measurement of all Level 3 assets and liabilities, a change in one of the inputs would not necessarily result in a directionally similar change in the other.

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DEFERRED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2015

DEFERRED COMPENSATION

Summary of RSU transactions

	RSUs		Weighted- Average Grant Date Fair Value
Outstanding December 31, 2014	14,282,789		$	4.02
Granted	—		—
Vested	(393,554	)	3.71
Cancelled	(64,724	)	3.81
Converted to deferred cash awards	(13,824,511	)	4.03
Outstanding March 31, 2015	—		—

Schedule of total compensation expense and related income tax benefits recognized in relation to RSUs

	Three Months Ended March 31,
	2015 (1)		2014
Compensation expense	$	17,917	$	7,356
Income tax benefits	$	5,116	$	2,099

(1) Compensation expense for the three months ended March 31, 2015 includes $11,545 of incremental compensation costs on unvested RSUs related to the modification of the RSUs.

Schedule of total compensation expense recognized in relation to deferred cash compensation awards

	Three Months Ended March 31,
	2015		2014
Compensation expense	$	325	$	11

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VARIABLE INTEREST ENTITIES

3 Months Ended

Mar. 31, 2015

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

16. VARIABLE INTEREST ENTITIES

Non-consolidated VIEs

The Company holds interests in certain VIEs that it does not consolidate. The Company has determined that it is not the primary beneficiary, mostly due to a lack of significant economic interest, voting power and/or power to direct the activities that would most significantly impact the economic performance of the VIE.

As of March 31, 2015 and December 31, 2014, the Company had certain variable interests in non-consolidated VIEs in the form of direct equity interests, a convertible note and a non-recourse loan. The carrying amount of these VIEs was $2,802 as of March 31, 2015 and $3,144 as of December 31, 2014, and was recorded within Other assets. These VIEs include a technology provider with a proprietary financial application, trading entities in which the Company has provided initial capital to fund trading activities, investment fund managers and a commodity pool operator. The Company also provides clearing and other administrative services to certain of these non-consolidated VIEs. The maximum exposure to loss on these VIEs was $2,850 as of March 31, 2015 and $3,144 as of December 31, 2014, respectively.

The Company previously had certain variable interests in non-consolidated VIEs in the form of trading margin accounts in which the Company had an economic interest in profits and losses and has provided initial capital to fund trading activities. All such interests had been terminated as of March 31, 2015.

The Company has not recorded any liabilities with respect to non-consolidated VIEs.

Consolidated VIEs

In December 2010, Kyte invested in a limited company that is focused on developing a proprietary trading business. The limited company is a VIE and it was determined that the Company is the primary beneficiary of this VIE because the Company, through Kyte, was the provider of the majority of this VIE’s start-up capital and has the power to direct the activities of this VIE that most significantly impact its economic performance, primarily through its voting percentage and consent rights on the activities that would most significantly influence the entity. The consolidated VIE had total assets of $10,804 at March 31, 2015 and $9,956 as of December 31, 2014, which primarily consisted of clearing margin. There were no material restrictions on the consolidated VIE’s assets. The consolidated VIE had total liabilities of $2,955 at March 31, 2015 and $2,761 at December 31, 2014. The Company’s exposure to economic loss on this VIE is approximately $5,633 and $5,298 as of March 31, 2015 and December 31, 2014, respectively.

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REGULATORY REQUIREMENTS (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Americas
REGULATORY REQUIREMENTS
Regulatory capital	$ 24,422
Minimum regulatory capital required	7,150
Excess regulatory capital	17,272
EMEA
REGULATORY REQUIREMENTS
Regulatory capital	122,996
Minimum regulatory capital required	98,895
Excess regulatory capital	24,101
Asia
REGULATORY REQUIREMENTS
Regulatory capital	31,824
Minimum regulatory capital required	8,608
Excess regulatory capital	$ 23,216

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income before attribution to non-controlling stockholders	$ (19,147)	$ 4,409
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	7,321	8,596
Deferred Compensation	15,223	7,357
Tax expense related to share-based compensation	(8)	812
Amortization of prepaid bonuses and forgivable loans	4,831	6,720
Benefit from deferred taxes	(16,664)	(3,936)
(Gains) losses on foreign exchange derivative contracts, net	(3,601)	(202)
Earnings from equity method investments, net	(66)	(663)
Amortization of deferred financing fees	472	454
Mark-to-market of contingent consideration liabilities	115	28
Impairment charges		611
Other non-cash charges, net	360	(392)
(Increase) decrease in operating assets:
Cash and securities segregated under federal and other regulations	9,479	(205)
Accounts receivable	(11,939)	(21,562)
Receivables from brokers, dealers and clearing organizations	(637,547)	(556,054)
Other assets	(9,405)	(6,268)
Increase (decrease) in operating liabilities:
Accrued compensation	(34,258)	(11,894)
Accounts payable and accrued expenses	8,976	7,812
Payables to brokers, dealers and clearing organizations	598,629	513,521
Payables to clearing services customers	10,244	22,451
Other liabilities	11,523	7,420
Cash used in operating activities	(65,462)	(20,985)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposition of consolidated subsidiary, net	1,982
Proceeds from disposition of interests in unconsolidated businesses		6,044
Return of capital from unconsolidated businesses		413
Proceeds from disposition of available-for-sale securities		5,882
Purchases of interests in unconsolidated businesses		(92)
Purchases of property, equipment and leasehold improvements	(992)	(2,628)
Cash used for loans to related parties	(60,000)
Capitalization of internally developed software	(1,907)	(2,752)
Proceeds on foreign exchange derivative contracts	3,277	271
Payments on foreign exchange derivative contracts	(335)	(338)
Other, net	(5)	257
Cash (used in) provided by investing activities	(57,980)	7,057
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings	75,000	47,000
Repayment of short-term borrowings	(25,000)	(47,000)
Cash dividends paid to common stockholders		(6,188)
Shares withheld for taxes on vested restricted stock units	(495)	(5,174)
Tax benefit (expense) related to share-based compensation	8	(812)
Other, net	(176)	456
Cash provided by (used in) financing activities	49,337	(11,718)
Effects of exchange rate changes on cash and cash equivalents	(3,348)	84
Decrease in Cash and cash equivalents classified as Held for sale	25,891
DECREASE IN CASH AND CASH EQUIVALENTS	(51,562)	(25,562)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	183,432	174,606
CASH AND CASH EQUIVALENTS, END OF PERIOD	131,870	149,044
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest	13,608	13,635
Cash paid for income taxes	3,651	2,718
Cash received from income tax refunds	138	675
Non-Cash Investing and Financing Activities:
Purchase of property and equipment through seller financing arrangement	$ 894

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
Accounts receivable, allowance for doubtful accounts	$ 1,806	$ 1,900
Property, equipment and leasehold improvements, depreciation and amortization	$ 200,728	$ 196,237
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	144,480,612	144,290,612
Treasury stock, common shares at cost	16,695,060	16,724,843

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STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2015

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

9.     STOCKHOLDERS’ EQUITY

On March 30, 2015, the Company filed a Form 25 with the Securities Exchange Commission (“SEC”) to voluntarily delist GFI’s common stock on the New York Stock Exchange (“NYSE”) and to terminate the registration of the common stock under the Exchange Act. The Company’s common stock was delisted on April 10, 2015 and the Company expects to file a Form 15 with the SEC to effect the deregistration of the common stock. The Company expects the deregistration of the common stock to become effective 90 days after filing the Form 15 with the SEC.

In April 2015, the Company’s Board of Directors authorized the Company to repurchase up to $50,000 of the Company’s common stock and 8.375% Senior Notes. During the three months ended March 31, 2015, and March 31, 2014 the Company did not repurchase any shares of its common stock.

The payment of quarterly dividends was suspended by the Company’s Board during the third quarter of 2014, in conjunction with the then-pending Amended CME Merger Agreement.  Following the Company’s acquisition by BGC the payment of quarterly dividends continues to be suspended. Therefore, the Company did not pay a cash dividend during the first quarter of 2015. On March 28, 2014 the Company paid a cash dividend of $0.05 per share, which, based on the number of shares outstanding on the record date for such dividends, totaled $6,188.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	Apr. 30, 2015
Document and Entity Information
Entity Registrant Name	GFI Group Inc.
Entity Central Index Key	0001292426
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		170,814,812
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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(LOSS) EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2015

(LOSS) EARNINGS PER SHARE

(LOSS) EARNINGS PER SHARE

10.     (LOSS) EARNINGS PER SHARE

Basic (loss) earnings per share for common stock is calculated by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted (loss) earnings per share is calculated by dividing net (loss) income by the sum of: (i) the weighted average number of shares outstanding, (ii) outstanding stock options and RSUs (using the “treasury stock” method when the impact of such options and RSUs would be dilutive), and (iii) any contingently issuable shares when dilutive.

Basic and diluted (loss) earnings per share for the three months ended March 31, 2015 and 2014 were as follows:

	Three Months Ended March 31,
	2015			2014
Basic (loss) earnings per share
GFI’s net (loss) income	$	(19,923	)	$	4,003
Weighted average common shares outstanding	127,339,178			122,362,839
Basic (loss) earnings per share	$	(0.16	)	$	0.03
Diluted (loss) earnings per share
GFI’s net (loss) income	$	(19,923	)	$	4,003
Weighted average common shares outstanding	127,339,178			122,362,839
Effect of dilutive options, RSUs, and other contingently issuable shares	—			9,067,862
Weighted average shares outstanding and common stock equivalents	127,339,178			131,430,701
Diluted (loss) earnings per share	$	(0.16	)	$	0.03

As discussed in Note 11 in further detail, all RSUs which were outstanding immediately prior to the completion of BGC’s tender offer were converted into the right to receive cash, subject to the terms of each award’s pre-existing vesting schedule, and therefore, were not subject to the computation of basic or diluted earnings per share for the three months ended March 31, 2015.

Excluded from the computation of diluted earnings per share for the three months ended March 31, 2014 because their effect would be anti-dilutive were the following:

	Three Months Ended March 31,
	2014
Stock Options	$	16,844
RSUs	286,014

Included in the computation of diluted earnings per share, but not in the computation of basic earnings per share as the conditions for issuance were not satisfied as of the respective reporting period were 1,171,879 contingently issuable shares for the three months ended March 31, 2014.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues
Agency commissions	$ 117,991	$ 121,415
Principal transactions	47,010	51,689
Total brokerage revenues	165,001	173,104
Clearing services revenues	21,338	34,164
Interest income from clearing services	297	528
Equity in net earnings of unconsolidated businesses	1,564	2,554
Software, analytics and market data	25,756	25,765
Other income, net	17,566	4,624
Total revenues	231,522	240,739
Interest and transaction-based expenses
Transaction fees on clearing services	20,495	32,640
Transaction fees on brokerage services	5,283	5,503
Interest expense from clearing services	128	169
Total interest and transaction-based expenses	25,906	38,312
Revenues, net of interest and transaction-based expenses	205,616	202,427
Expenses
Compensation and employee benefits	147,217	137,697
Communications and market data	12,042	13,347
Travel and promotion	6,383	7,779
Rent and occupancy	6,927	8,086
Depreciation and amortization	7,321	8,596
Professional fees	18,436	6,171
Interest on borrowings	7,868	7,784
Merger termination fees	24,728
Other expenses	6,233	7,464
Total other expenses	237,155	196,924
(Loss) income before (benefit from) provision for income taxes	(31,539)	5,503
(Benefit from) provision for income taxes	(12,392)	1,094
Net (loss) income before attribution to non-controlling stockholders	(19,147)	4,409
Less: Net income attributable to non-controlling interests	776	406
GFI's net (loss) income	$ (19,923)	$ 4,003
Earnings per share available to common stockholders
Basic (in dollars per share)	$ (0.16)	$ 0.03
Diluted (in dollars per share)	$ (0.16)	$ 0.03
Weighted average shares outstanding
Basic (in shares)	127,339,178	122,362,839
Diluted (in shares)	127,339,178	131,430,701
Dividends declared per share of common stock (in dollars per share)	$ 0	$ 0.05

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DISPOSALS AND ASSETS AND LIABILITIES HELD FOR SALE

3 Months Ended

Mar. 31, 2015

DISPOSALS AND ASSETS AND LIABILITIES HELD FOR SALE

DISPOSALS AND ASSETS AND LIABILITIES HELD FOR SALE

4. DISPOSALS AND ASSETS AND LIABILITIES HELD FOR SALE

On January 24, 2015, the Company entered into an agreement to sell 100% equity ownership of The Kyte Group Limited (“KGL”), which primarily included the Company’s clearing business.  The Company determined that as of December 31, 2014, KGL met the criteria for classification as held for sale and, accordingly, its assets and liabilities were included in Assets held for sale and Liabilities held for sale on the Condensed Consolidated Statements of Financial Condition as of December 31, 2014, net of $4.1 million of asset impairment, resulting from a write-down to the carrying value of its long-lived assets. The transaction was completed in March 2015. KGL’s operations prior to the completion of the transaction are included in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014 and within the Clearing and Backed Trading reportable segment.

The major classes of the total consolidated assets and liabilities of KGL that were classified as held for sale at December 31, 2014 were as follows:

	December 31,
	2014
Assets
Cash and cash equivalents	$	24,957
Cash and securities segregated under federal and other regulations	52,160
Accounts receivable, net	1,348
Receivables from brokers, dealers and clearing organizations	90,634
Property, equipment and leasehold improvements, net	1,944
Intangible assets, net	4,302
Other assets (1)	680
Asset impairment	(4,061		)
Total assets held for sale	$	171,964
Liabilities
Accrued compensation	1,545
Accounts payable and accrued expenses	849
Payables to clearing services customers (2)	142,108
Other liabilities	1,397
Total liabilities held for sale	$	145,899

(1) Excludes $570 of receivables from consolidated affiliates that has been eliminated for the purposes of presentation on the Consolidated Statement of Financial Condition.

(2) Excludes $12,499 of payables to consolidated affiliates that has been eliminated for the purposes of presentation on the Consolidated Statement of Financial Condition.

On February 3, 2015, the Company entered into an agreement to sell 100% equity ownership of Kyte Broking Limited (“KBL”). The Company determined that KBL met the criteria for classification as held for sale and, as a result, its assets and liabilities have been included in Assets held for sale and Liabilities held for sale on the Condensed Consolidated Statements of Financial Condition as of March 31, 2015 and December 31, 2014.  The Company believes that no impairment exists as the fair value of the net assets related to KBL less the costs to sell the business will exceed the related carrying value. The transaction is expected to close in the second quarter of 2015.

The major classes of the total consolidated assets and liabilities of KBL that were classified as held for sale at March 31, 2015 and December 31, 2014 were as follows:

	March 31,		December 31,
	2015		2014
Assets
Cash and cash equivalents	$	12,238	$	13,172
Accounts receivable, net	8,664		7,398
Receivables from brokers, dealers and clearing organizations	2,040		659
Property, equipment and leasehold improvements, net	157		178
Other assets	155		330
Total assets held for sale	$	23,254	$	21,737
Liabilities
Accounts payable and accrued expenses	18,012		15,990
Other liabilities	141		25
Total liabilities held for sale	$	18,153	$	16,015

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2015

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation— The Company’s Condensed Consolidated Financial Statements (Unaudited) are prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingencies in the Condensed Consolidated Financial Statements. Certain estimates and assumptions relate to the accounting for acquired goodwill and intangible assets, fair value measurements, compensation accruals, tax liabilities and the potential outcome of litigation matters. Management believes that the estimates utilized in the preparation of the Condensed Consolidated Financial Statements are reasonable and prudent. Actual results could differ materially from these estimates.

Certain amounts in the Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current year presentation.

These Condensed Consolidated Financial Statements are unaudited and should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”). The condensed consolidated financial information as of December 31, 2014 presented in this Form 10-Q has been derived from audited Consolidated Financial Statements not included herein.

These unaudited Condensed Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These adjustments are of a normal, recurring nature. Interim period operating results may not be indicative of the operating results for a full year.

Consolidation Policies

General— The Condensed Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and subsidiaries that are treated as such and other entities in which the Company has a controlling financial interest. For consolidated subsidiaries that are less than wholly-owned, equity interests that are not owned by the Company are referred to as non-controlling interests. The portion of net income attributable to non-controlling interests for such subsidiaries is presented as Net income attributable to non-controlling interests on the Condensed Consolidated Statements of Operations, and the portion of the stockholders’ equity of such subsidiaries is presented as Non-controlling interests in the Condensed Consolidated Statements of Financial Condition and Condensed Consolidated Statement of Changes in Stockholders’ Equity. All intercompany transactions and balances have been eliminated.

Variable Interest Entities—The Company determines whether it holds any interests in entities deemed to be a variable interest entity (“VIE”). A VIE is an entity that lacks one or more of the following characteristics (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The Company has a controlling financial interest and will consolidate a VIE if it is the primary beneficiary.

The primary beneficiary is the party that has both (i) the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and (ii) the obligation to absorb losses of the entity that could be potentially significant to the VIE or the right to receive benefits from the entity that could be potentially significant. As of March 31, 2015, the Company holds interests in certain VIEs. One of these VIEs is consolidated because it was determined that the Company is the primary beneficiary of this VIE because (1) the Company provided the majority of the VIE’s start-up capital and (2) the Company has consent rights regarding those activities that the Company believes would most significantly impact the economic performance of the entity. The remaining VIEs are not consolidated as it was determined that the Company is not the primary beneficiary due to the level of equity ownership and voting power.  The Company reassesses its evaluation of whether an entity is a VIE when certain events occur, such as changes in economic ownership and voting power.  The Company reassesses its determination of whether it is the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.  See Note 16 for disclosures on Variable Interest Entities.

Cash and Cash Equivalents— Cash and cash equivalents consist of cash and highly liquid investments purchased with an original maturity of three months or less. Cash and cash equivalents are categorized within Level 1 of the fair value hierarchy.

Cash and Securities Segregated Under Federal and Other Regulations—The Company holds cash and securities representing funds received in connection with customer trading activities. The Company’s subsidiaries are required to satisfy regulations mandated by their primary regulators to segregate or set aside cash or equivalent securities to satisfy regulations, promulgated to protect customer assets.

Accounts Receivable —Accounts receivable largely represents commissions due from brokers, dealers, banks and other financial and nonfinancial institutions for the execution of securities, commodities, foreign exchange and other derivative brokerage transactions. Also, included within Accounts receivable are the billed portion of existing contracts from customers related to the licensing, support and maintenance of software, analytics and market data, as well as any unbilled but earned portion of any services provided to such customers. In estimating the allowance for doubtful accounts, management considers the length of time receivables are past due and historical experience. In addition, if the Company is aware of a client’s inability to meet its financial obligations, a specific provision for doubtful accounts is recorded in the amount of the estimated losses that will result from the inability of that client to meet its financial obligation.

Receivables from and Payables to Brokers, Dealers and Clearing Organizations—Receivables from and payables to brokers, dealers and clearing organizations primarily represent: (i) principal transactions for which the stated settlement dates have not yet been reached, (ii) principal transactions which have not settled as of their stated settlement dates, (iii) cash, including deposits, held at clearing organizations and exchanges in support of the Company’s clearing business and to facilitate settlement and clearance of matched principal transactions and (iv) the spread on matched principal transactions that have not yet been remitted from/to clearing organizations and exchanges.

Property, Equipment and Leasehold Improvements—Property, equipment and leasehold improvements are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method, generally over three to seven years. Property and equipment are depreciated over their estimated useful lives. Leasehold improvements are amortized over the shorter of the remaining term of the respective lease to which they relate or the remaining useful life of the leasehold improvement. Internal and external costs incurred in developing or obtaining computer software for internal use are capitalized in accordance with Accounting Standards Codification (“ASC”) 350 Intangibles—Goodwill and Other (“ASC 350”), and are amortized on a straight-line basis over the estimated useful life of the software, generally three years. General and administrative costs related to developing or obtaining such software are expensed as incurred.

Goodwill and Intangible Assets—Goodwill represents the excess of the purchase price allocation over the fair value of tangible and identifiable intangible net assets acquired. The goodwill associated with each business combination is allocated to the related reporting units, which are determined based on how the Company’s businesses are managed and how they are reviewed by the Company’s chief operating decision maker. Other intangible assets are recorded at their fair value upon completion of a business combination or certain other transactions. Substantially all of the firm’s identifiable intangible assets are considered to have definite lives and are amortized on a straight-line basis over their estimated useful lives.

In accordance with ASC 350, goodwill is not amortized, but instead is periodically tested for impairment. The Company reviews goodwill for impairment on an annual basis as of November 1 of each fiscal year or whenever an event occurs or circumstances change that could reduce the fair value of a reporting unit below its carrying amount. See Note 6 for further information.

Prepaid Bonuses and Forgivable Employee Loans—Prepaid bonuses and forgivable loans to employees are stated at historical value net of amortization when the agreement between the Company and the employee provides for the return of proportionate amounts of the bonus or loan outstanding if employment is terminated in certain circumstances prior to the end of the term of the agreement. Amortization is calculated using the straight-line method over the term of the contract, which is generally two to four years, and is recorded in Compensation and employee benefits. The Company generally expects to recover the unamortized portion of prepaid bonuses and forgivable loans when employees voluntarily terminate their employment or if their employment is terminated for cause prior to the end of the term of the agreement. The prepaid bonuses and forgivable loans are included in Other assets in the Condensed Consolidated Statements of Financial Condition. At March 31, 2015 and December 31, 2014, the Company had prepaid bonuses of $15,905 and $16,523, respectively. At March 31, 2015 and December 31, 2014, the Company had forgivable employee loans and advances to employees of $15,022 and $15,072, respectively. Amortization of prepaid bonuses and forgivable employee loans for the three months ended March 31, 2015 and 2014 was $4,831 and $6,720, respectively and is included within Compensation and employee benefits.

Investments—When the Company does not have a controlling financial interest in an entity but can exert significant influence over the entity’s operating and financial policies, the investment is accounted for under the equity method of accounting in accordance with ASC 323-10, Investments—Equity Method and Joint Ventures (“ASC 323-10”). Significant influence generally exists when the Company owns 20% to 50% of the entity’s common stock or in-substance common stock. The Company initially records the investment at cost and adjusts the carrying amount each period to recognize its share of the earnings and losses of the investee based on the percentage of ownership. At March 31, 2015 and December 31, 2014, the Company had equity method investments with a carrying value of $12,842 and $13,184, respectively, included within Other assets. The Company also provides clearing and other administrative services to certain of these equity method investees.

Investments for which the Company does not have the ability to exert significant influence over operating and financial policies are generally accounted for using the cost method of accounting in accordance with ASC 325-10, Investments—Other (“ASC 325-10”). At March 31, 2015 and December 31, 2014, the Company had cost method investments of $1,533 and $1,688, respectively, included within Other assets.  The fair value of the Company’s cost method investments are not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value. The Company monitors its equity and cost method investments for indicators of impairment each reporting period.

The Company accounts for its marketable equity securities and its debt securities in accordance with ASC 320-10, Investments—Debt and Equity Securities (“ASC 320-10”). Investments that are owned by the Company’s broker-dealer subsidiaries are recorded at fair value with realized and unrealized gains and losses reported in net (loss) income. Investments designated as available-for-sale that are owned by the Company’s non broker-dealer subsidiaries are recorded at fair value with unrealized gains or losses reported as a separate component of other comprehensive (loss) income, net of tax.  The fair value of the Company’s available-for-sale securities was $98 and $0 as of March 31, 2015 and December 31, 2014, respectively, and is included within Other assets.

Fair Value of Financial Instruments—In accordance with ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), the Company estimates fair values of financial instruments using relevant market information and other assumptions. Fair value estimates involve uncertainties and matters of significant judgment in interpreting market data and, accordingly, changes in assumptions or in market conditions could adversely affect the estimates. The Company also discloses the fair value of its financial instruments in accordance with the fair value hierarchy as set forth by ASC 820-10. See Note 14 for further information.

Derivative Financial Instruments—The Company enters into derivative transactions for a variety of reasons, including managing its exposure to risk arising from changes in foreign currency, facilitating customer trading activities and, in certain instances, to engage in principal trading for the Company’s own account. Derivative assets and liabilities are carried on the Condensed Consolidated Statements of Financial Condition at fair value, with changes in the fair value recognized in the Condensed Consolidated Statements of Operations. Contracts entered into to manage risk arising from changes in foreign currency are recognized in Other income, net and contracts entered into to facilitate customer transactions and principal trading are recognized in Principal transactions. Derivatives are reported on a net-by-counterparty basis when management believes that a legal and enforceable right of offset exists under these agreements. See Note 15 for further information.

Payables to Clearing Services Customers—Payables to clearing services customers include amounts due on cash and margin transactions, including futures contracts transacted on behalf of customers.

Revenue Recognition

Brokerage Transactions—The Company provides brokerage services to its clients in the form of either agency or principal transactions. In agency transactions, the Company charges commissions for executing transactions between buyers and sellers. Agency commission revenues and related expenses are recognized on a trade date basis. These revenues are presented in “Agency Commissions”.  Principal transactions revenue is primarily derived from matched principal and principal trading transactions. Principal transactions revenues and related expenses are recognized on a trade date basis. The Company earns revenue from principal transactions on the spread between the buy and sell price of the security that is brokered. In matched principal transactions, the Company simultaneously agrees to buy instruments from one customer and sell them to another customer. These revenues are presented in “Principal Transactions”.  In the normal course of its matched principal and principal trading businesses, the Company may hold security positions overnight. These positions are marked to market on a daily basis.

Clearing Services Revenues—The Company charges fees to customers for clearing services provided for cash and derivative transactions. Clearing services revenues are recorded on a trade date basis as customer transactions occur and are presented net of any customer negotiated rebates.

Software, Analytics and Market Data Revenue Recognition— Software revenue consists primarily of fees charged for Trayport electronic trading software, which are typically billed on a subscription basis and are recognized ratably over the term of the subscription period, which ranges from one to five years. Analytics revenue consists primarily of software license fees for Fenics pricing tools which are typically billed on a subscription basis, and is recognized ratably over the term of the subscription period, which is generally three years. Market data revenue primarily consists of subscription fees and fees from customized one-time sales. Market data subscription fees are recognized on a straight-line basis over the term of the subscription period, which ranges from one to two years. Market data revenue from customized one-time sales is recognized upon delivery of the data. The Company markets its software, analytics and market data products through its direct sales force and, in some cases, indirectly through resellers. In general, the Company’s license agreements for such products do not provide for a right of return.

Other Income, net—Included within Other income, net on the Company’s Condensed Consolidated Statements of Operations are revaluations of foreign currency derivative contracts, realized and unrealized transaction gains and losses on certain foreign currency denominated items, and gains and losses on certain investments, and interest income earned on short-term investments.

Compensation and Employee Benefits—The Company’s compensation and employee benefits have both a fixed and variable component. Base salaries and benefit costs are primarily fixed for all employees while bonuses constitute the variable portion of compensation and employee benefits. The Company has historically paid certain performance bonuses in restricted stock units (“RSUs”).  All RSUs which were outstanding immediately prior to the completion of BGC’s tender offer were converted into the right to receive cash, subject to the terms of each award’s pre-existing vesting schedule.  During the three months ended March 31, 2015, the Company paid certain performance bonuses in deferred cash awards. The Company also may grant sign-on and retention bonuses for certain newly-hired or existing employees who agree to long-term employment agreements.

Share-Based Compensation—The Company’s share-based compensation had consisted of RSUs. The Company accounts for share-based compensation in accordance with ASC 718 Compensation— Stock Compensation (“ASC 718”). This accounting guidance requires measurement of compensation expense for equity-based awards at fair value and recognition of compensation expense over the service period, net of estimated forfeitures. In all periods presented, the only share-based compensation expense recognized by the Company has been RSUs. The Company determines the fair value of RSUs based on the number of units granted and the grant date fair value of the Company’s common stock, measured as of the closing price on the date of grant. As discussed in further detail in Note 11, during the first quarter of 2015, the Company converted all RSUs which were outstanding immediately prior to the completion of BGC’s tender offer into the right to receive cash, subject to the terms of each award’s pre-existing vesting schedule.

Deferred Cash Compensation—The Company accounts for deferred cash compensation in accordance with ASC 710 Compensation— General (“ASC 710”). This accounting guidance requires measurement of deferred compensation expense for non-equity-based awards based upon future amounts expected to be paid, and provides for recognition of compensation expense over the expected service period, net of estimated forfeitures. See Note 11 for further information.

Income Taxes— In accordance with ASC 740, Income Taxes (“ASC 740”), the Company provides for income taxes using the asset and liability method under which deferred income taxes are recognized for the estimated future tax effects attributable to temporary differences and carryforwards that result from events that have been recognized either in the financial statements or the income tax returns, but not both. The measurement of current and deferred income tax assets and liabilities is based on provisions of enacted tax laws. Valuation allowances are recognized if, based on the weight of available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. Management applies the more likely than not criteria prior to recognizing a financial statement benefit for a tax position taken (or expected to be taken) in a tax return. The Company recognizes interest and/or penalties related to income tax matters in interest expense and other expense, respectively.

The Company recorded a benefit from income taxes of $12,392 for the three months ended March 31, 2015, as compared to a provision for income taxes of $1,094 for the three months ended March 31, 2014.  The change from provision for income taxes to benefit from income taxes was primarily due to an allowable U.S. income tax deduction as a result of the merger termination fee paid to CME following the termination of the CME Merger Agreement in January 2015. The effective tax rates for both periods were impacted by a geographical mix of pre-tax profits and losses.

Treasury Stock—The Company accounts for Treasury stock using the cost method. Treasury stock held by the Company may be reissued with respect to vested RSUs in qualified jurisdictions. The Company’s policy is to account for these shares as a reduction of Treasury stock on a first-in, first-out basis.

Foreign Currency Translation Adjustments and Transactions— Assets and liabilities of foreign subsidiaries having non-U.S. dollar functional currencies are translated at the period end rates of exchange, and revenue and expenses are translated at the average rates of exchange for the period. Gains or losses resulting from translating foreign currency financial statements are reflected in foreign currency translation adjustments and are reported as a separate component of comprehensive (loss) income and included in accumulated other comprehensive income in the Condensed Consolidated Statement of Changes in Stockholders’ Equity. The revaluation of asset and liability balances that are denominated in currencies other than the functional currency of the business unit involved in such transactions is reflected in Other Income, net in the Condensed Consolidated Statements of Operations. Net losses resulting from remeasurement of foreign currency transactions and balances were $1,038 and $92 for the three months ended March 31, 2015 and 2014, respectively.

Recent Accounting Pronouncements—  In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 changes the criteria for disposals to qualify as discontinued operations and requires new disclosures about disposals of both discontinued operations and certain other disposals that do not meet the new definition. The guidance was effective for the Company’s fiscal year beginning January 1, 2015. The adoption of ASU 2014-08 has not had a material impact on the Company’s Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 defines how companies report revenues from contracts with customers, and also requires enhanced disclosures. The guidance is effective beginning in the first quarter of fiscal 2017. The Company is currently evaluating the impact of the new guidance on the Company’s Consolidated Financial Statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about the Company’s ability to continue as a going concern, and if so, to provide related footnote disclosures. The guidance is effective for the Company’s 2016 annual financial statements. The Company is currently evaluating the impact of the new guidance on the Company’s Consolidated Financial Statements.

In November 2014, the FASB issued ASU No. 2014-17, Business Combinations  (Topic 805) - Pushdown Accounting (“ASU 2014-17”). ASU 2014-17 provides an acquired entity the option of applying pushdown accounting in its stand-alone financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The Company adopted this guidance on November 18, 2014, the effective date of ASU 2014-17.  In conjunction with the Company’s February 2015 acquisition by BGC, the Company has elected not to apply pushdown accounting on the Condensed Consolidated Financial Statements for the three months ended March 31, 2015, the reporting period in which the change-in-control event occurred.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 eliminates the deferral of certain consolidation standards for entities considered to be investment companies and modifies the consolidation analysis performed on certain types of legal entities. The guidance is effective beginning in the first quarter of fiscal 2017 and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its Condensed Consolidated Financial Statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be reported on the Consolidated Statements of Financial Condition as a direct deduction from the carrying amount of that debt liability. The guidance is effective for the Company retrospectively beginning in the first quarter of fiscal 2017 and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its Condensed Consolidated Financial Statements.

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DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2015

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

15. DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses foreign exchange derivative contracts, including forward contracts and foreign currency swaps, to reduce the effects of fluctuations in certain assets and liabilities denominated in foreign currencies. The Company also hedges a portion of its foreign currency exposures on anticipated foreign currency denominated revenues and expenses by entering into forward foreign exchange contracts. As of March 31, 2015 and December 31, 2014, none of these contracts were designated as foreign currency cash flow hedges under ASC 815-10, Derivatives and Hedging (“ASC 815-10”).

The Company provides brokerage services to its customers for exchange-traded and OTC derivative products, which include futures, forwards and options contracts. The Company may enter into principal transactions for exchange-traded and OTC derivative products to facilitate customer trading activities or to engage in principal trading for the Company’s own account.

The Company monitors market risk exposure from its matched principal business and principal trading business by regularly monitoring both (i) its concentration of market risk to financial instruments, countries or counterparties and (ii) trades that have not settled within prescribed settlement periods or volume thresholds. Additionally, market risks are monitored and mitigated by the use of the Company’s proprietary, electronic risk monitoring system, which provides daily credit reports in each of the Company’s geographic regions that analyze credit concentration and facilitates the regular monitoring of transactions against key risk indicators.

For certain derivative contracts, the Company has entered into agreements with counterparties that allow for the netting of positions. The Company reports these derivative contracts on a net-by-counterparty basis when management believes that a legal and enforceable right of offset exists under these agreements.

Fair values of derivative contracts on a gross and net basis as of March 31, 2015 and December 31, 2014 are as follows:

	March 31, 2015						December 31, 2014
Derivatives not designated as hedging instruments under ASC 815-10 (1)	Derivative    Assets(2)			Derivative   Liabilities(3)			Derivative   Assets(2)			Derivative Liabilities(3)
Foreign exchange derivative contracts	$	3,962		$	2,223		$	2,773		$	1,387
Commodity derivative contracts	1,650			594			1,198			338
Total fair value of derivative contracts	$	5,612		$	2,817		$	3,971		$	1,725
Counterparty netting	(651		)	(651		)	(338		)	(338		)
Total fair value	$	4,961		$	2,166		$	3,633		$	1,387

(1) Excluded from the above table is variation margin on open long and short futures contracts which is included in Receivables from brokers, dealers and clearing organizations and Payables to brokers, dealers and clearing organizations,  on the Condensed Consolidated Statements of Financial Condition. See Note 14 for further details about variation margin balances on open long and short futures contracts as of March 31, 2015 and December 31, 2014.  Gross notional amounts on these futures contracts are included in the table below which details outstanding long and short notional amounts of derivative financial instruments.

(2) Reflects options and forwards contracts within Other assets.

(3) Reflects options and forwards contracts within Other liabilities.

As of March 31, 2015 and December 31, 2014, the Company had outstanding forward foreign exchange hedge contracts with a combined notional value of $56,022 and $69,692, respectively. Approximately $16,110 and $20,568 of these forward foreign exchange contracts represent a hedge of Euro and British pound-denominated balance sheet positions at March 31, 2015 and December 31, 2014, respectively. The remaining outstanding forward foreign exchange contracts are hedges of anticipated future cash flows.

In addition to the Company’s outstanding forward foreign exchange hedge contracts, the following table includes the outstanding long and short notional amounts on a gross basis of derivative financial instruments as of March 31, 2015 and December 31, 2014:

	March 31, 2015 (1)				December 31, 2014 (2)
	Long		Short		Long		Short
Foreign exchange derivative contracts	$	14,368	$	124,313	$	3,185	$	415,756
Commodity derivative contracts	582,250		580,670		675,686		692,855
Fixed income derivative contracts	5,101,596		5,564,179		7,124,375		7,911,965
Equity derivative contracts	2,411		2,408		2,758		2,871
Total derivative notional amounts	$	5,700,625	$	6,271,570	$	7,806,004	$	9,023,447

(1) Notional amounts include gross notionals on open long and short futures contracts of $5,699,521 and $6,270,828 respectively, as of March 31, 2015. These gross notional amounts primarily relate to positions held by a consolidated VIE for which the Company’s exposure to economic loss is approximately $5,633 as of March 31, 2015. See Note 16 for further information.

(2) Notional amounts include gross notionals on open long and short futures contracts of $7,804,981 and $9,023,087, respectively, as of December 31, 2014.  These gross notional amounts primarily relate to positions held by a consolidated VIE for which the Company’s exposure to economic loss is approximately $5,298 as of December 31, 2014. See Note 16 for further information.

The following is a summary of the effect of derivative contracts on the Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014:

	Location of Gain (Loss)	Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments under ASC 815-10	Recognized in Income on Derivatives	For the Three Months Ended March 31, 2015		For the Three Months Ended March 31, 2014
Foreign exchange derivative contracts	(1)	$	4,675	$	295
Commodity derivative contracts	Principal transactions	2,881		1,753
Fixed income derivative contracts	Principal transactions	1,587		3,130
Equity derivative contracts	(2)	164		7

(1) For the three months ended March 31, 2015, approximately $3,601 of gains on foreign exchange derivative contracts were included within Other income, net and approximately $1,074 of gains on foreign currency options were included within Principal transactions.  For the three months ended March 31, 2014, approximately $202 of gains on foreign exchange derivative contracts were included within Other income, net and approximately $93 of gains on foreign currency options were included within Principal transactions.

(2) For the three months ended March 31, 2015, approximately $164 of gains on equity derivative contracts were included within Principal transactions. For the three months ended March 31, 2014, approximately $14 of losses on equity derivative contracts were included within, Other income, net and approximately $21 of gains on equity derivative contracts were included within Principal transactions.

The following is a summary of derivative contracts, by counterparty, including the gross amounts offset in the Condensed Consolidated Statements of Financial Position as of March 31, 2015:

			Gross Amount Offset in the			Net Amounts of Assets Offset in the		Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition
Counterparties (1)	Gross Amounts of Recognized Assets		Condensed Consolidated Statements of Financial Position			Condensed Consolidated Statements of Financial Position (2)		Derivatives (3)		Cash Collateral Received/ (Pledged)		Net Amount
Derivative Assets:
Counterparty A	$	2,599	$	—		$	2,599	$	—	$	—	$	2,599
Counterparty B	1,756		(414		)	1,342		—		—		1,342
Counterparty C	1,021		—			1,021		—		—		1,021
Counterparty D	237		(237		)	—		—		—		—
Total	$	5,613	$	(651	)	$	4,962	$	—	$	—	$	4,962
Derivative Liabilities:
Counterparty A	$	747	$	—		$	747	$	—	$	—	$	747
Counterparty B	414		(414		)	—		—		—		—
Counterparty C	1,420		—			1,420		—		—		1,420
Counterparty D	237		(237		)	—		—		—		—
Total	$	2,818	$	(651	)	$	2,167	$	—	$	—	$	2,167

(1) Excluded from the above table is variation margin on open long and short futures contracts which is included in Receivables from brokers, dealers and clearing organizations  and Payables to brokers, dealers and clearing organizations,  on the Condensed Consolidated Statements of Financial Condition. See Note 14 for further details about variation margin balances on open long and short futures contracts as of March 31, 2015.

(2) Derivative assets and derivative liabilities are reflected within Other assets and Other Liabilities, respectively.

(3) As of March 31, 2015, the Company does not have any derivative positions under a master netting agreement that are not netted.

The following is a summary of derivative contracts, by counterparty, including the gross amounts offset in the Consolidated Statements of Financial Position as of December 31, 2014:

			Gross Amounts Offset in the			Net Amounts of Assets Offset in the		Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition
Counterparties (1)	Gross Amounts of Recognized Assets		Condensed Consolidated Statements of Financial Position			Condensed Consolidated Statements of Financial Position (2)		Derivatives (3)		Cash Collateral Received/ (Pledged)		Net Amount
Derivative Assets:
Counterparty A	$	1,630	$	—		$	1,630	$	—	$	—	$	1,630
Counterparty B	1,789		(338		)	1,451		—		—		1,451
Counterparty C	552		—			552		—		—		552
Total	$	3,971	$	(338	)	$	3,633	$	—	$	—	$	3,633
Derivative Liabilities:
Counterparty A	$	394	$	—		$	394	$	—	$	—	$	394
Counterparty B	$	338	$	(338	)	$	—	$	—	$	—	$	—
Counterparty C	993		—			993		—		—		993
Total	$	1,725	$	(338	)	$	1,387	$	—	$	—	$	1,387

(1) Excluded from the above table is variation margin on open long and short futures contracts which is included in Receivables from brokers, dealers and clearing organizations and Payables to brokers, dealers and clearing organizations,  on the Condensed Consolidated Statements of Financial Condition. See Note 14 for further details about variation margin balances on open long and short futures contracts as of December 31, 2014

.

(2) Derivative assets and derivative liabilities are reflected within Other assets and Other Liabilities, respectively.

(3) As of December 31, 2014, the Company does not have any derivative positions under a master netting agreement that are not netted.

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DEFERRED COMPENSATION

3 Months Ended

Mar. 31, 2015

DEFERRED COMPENSATION

DEFERRED COMPENSATION

11.     DEFERRED COMPENSATION

Restricted Stock Units

Prior to the completion of BGC’s tender offer (as discussed in Note 2), the Company awarded bonuses in the form of equity awards pursuant to the  Amended and Restated GFI Group Inc. 2008 Equity Incentive Plan, (“2008 Equity Incentive Plan”) which permitted the grant of non-qualified stock options, incentive stock options, stock appreciation rights, shares of restricted stock, restricted stock units and performance units to employees, non-employee directors or consultants. The Company issued shares from authorized but unissued shares and authorized and issued shares reacquired and held as treasury shares, which were reserved for issuance upon the vesting of RSUs granted pursuant to the 2008 Equity Incentive Plan.  Following the acquisition by BGC, the Company filed post-effective amendments to its registration statements on Form S-8 de-registering any and all securities registered under the registration statements that remain unissued pursuant to its equity incentive and stock option plans and does not plan to issue any additional RSUs. Pursuant to the Tender Offer Agreement, each RSU of the Company outstanding immediately prior to the completion of BGC’s tender offer was converted into the right to receive an amount in cash equal to $6.10 per unit, the offer price with respect to each share underlying such award, with such cash payable on and subject to the terms and conditions of the original vesting schedule of each RSU.

The Company accounted for the conversion of RSUs into the right to receive cash as the modification of an equity award to a liability in accordance with the applicable provisions of ASC 718. Accordingly, the Company recorded incremental compensation cost on the previously recognized portion of any outstanding RSUs based upon the excess, if any, of the $6.10 per unit fair value of the modified award over the value of the original award immediately before its terms were modified.   The total unrecognized compensation cost associated with those RSUs which were outstanding when the modification was effective, will be recognized based on each award’s pre-existing vesting schedule based upon the $6.10 per unit fair value of the modified award, net of estimated forfeitures.

The following is a summary of RSU transactions under the 2008 Equity Incentive Plan:

	RSUs		Weighted- Average Grant Date Fair Value
Outstanding December 31, 2014	14,282,789		$	4.02
Granted	—		—
Vested	(393,554	)	3.71
Cancelled	(64,724	)	3.81
Converted to deferred cash awards	(13,824,511	)	4.03
Outstanding March 31, 2015	—		—

There were no RSUs granted during the three months ended March 31, 2015.The weighted average grant-date fair value of RSUs granted for the three months ended March 31, 2014 was $3.56 per unit. Total compensation expense and related income tax benefits recognized in relation to RSUs are as follows:

	Three Months Ended March 31,
	2015 (1)		2014
Compensation expense	$	17,917	$	7,356
Income tax benefits	$	5,116	$	2,099

(1) Compensation expense for the three months ended March 31, 2015 includes $11,545 of incremental compensation costs on unvested RSUs related to the modification of the RSUs.

At March 31, 2015, total unrecognized compensation cost related to the RSUs (which are to be settled in cash based on pre-existing vesting schedules) prior to the consideration of expected forfeitures was approximately $41,829 and is expected to be recognized over a weighted-average period of 1.38 years. The total fair value of RSUs vested during the three months ended March 31, 2015 and 2014 was $1,459 and $16,057, respectively.

Deferred Cash Compensation

Separate from the modification of RSUs discussed above under “Restricted Stock Units”, the Company’s Deferred Cash Award Program, which was adopted on February 12, 2013, provides for the grant of deferred cash incentive compensation to eligible employees.

The Company may pay certain bonuses in the form of deferred cash compensation awards, which generally vest over a future service period. Total compensation expense recognized in relation to deferred cash compensation awards, not including the expense related to RSUs converted to deferred cash awards as described above, is as follows:

	Three Months Ended March 31,
	2015		2014
Compensation expense	$	325	$	11

At March 31, 2015, total unrecognized compensation cost related to deferred cash compensation prior to the consideration of expected forfeitures, not including the unrecognized portion of the RSUs converted to deferred cash awards as described above, was approximately $13,324 and is expected to be recognized over a weighted-average period of 2.81 years.

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OTHER ASSETS AND OTHER LIABILITIES

3 Months Ended

Mar. 31, 2015

OTHER ASSETS AND OTHER LIABILITIES

OTHER ASSETS AND OTHER LIABILITIES

7.     OTHER ASSETS AND OTHER LIABILITIES

Other assets consisted of the following:

	March 31, 2015		December 31, 2014
Deferred tax assets	$	108,561	$	91,935
Prepaid bonuses	15,905		16,523
Forgivable employee loans and advances to employees	15,022		15,072
Investments accounted for under the cost method and equity method	14,375		14,872
Financial instruments owned	5,302		3,865
Deferred financing fees	4,566		5,038
Software inventory, net	3,414		3,435
Other	26,714		21,981
Total Other assets	$	193,859	$	172,721

Other liabilities consisted of the following:

	March 31, 2015		December 31, 2014
Payroll related liabilities	$	29,105	$	12,522
Deferred revenues	9,252		7,993
Deferred rent liabilities	8,494		8,657
Unrecognized tax benefits	7,983		8,396
Income taxes payable	6,353		5,384
Interest payable	6,317		12,457
Deferred tax liabilities	4,591		4,726
Financial instruments sold, not yet purchased	2,166		1,387
Other	8,598		8,748
Total Other liabilities	$	82,859	$	70,270

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) (Equity derivative contracts, Fair value measured on a recurring basis, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Equity derivative contracts | Fair value measured on a recurring basis
Changes in Level 3 Financial Assets measured at fair value
Opening Balance	$ 14
Total realized and unrealized losses included in Net loss	$ (14)

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RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS

3 Months Ended

Mar. 31, 2015

RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS

RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS

5.     RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS

Amounts receivable from and payable to brokers, dealers and clearing organizations consisted of the following:

	March 31, 2015		December 31, 2014
Receivables from brokers, dealers and clearing organizations:
Contract value of fails to deliver	$	1,061,593	$	458,718
Receivables from and deposits with clearing organizations and financial institutions (1)	59,875		48,630
Net pending trades	—		253
Total	$	1,121,468	$	507,601
Payables to brokers, dealers and clearing organizations:
Contract value of fails to receive	$	1,045,537	$	462,747
Payables to clearing organizations and financial institutions	13,380		496
Net pending trades	2,955		—
Total	$	1,061,872	$	463,243

(1) Excluded from the March 31, 2015 balance is $2,040 of Receivables from and deposits with clearing organizations and financial institutions related to KBL. Excluded from the December 31, 2014 balance is $91,293 of Receivables from and deposits with clearing organizations and financial institutions related to KGL and KBL. As discussed in Note 4, such amounts are included in Assets held for sale.

Substantially all fail to deliver and fail to receive balances at March 31, 2015 and December 31, 2014 have subsequently settled at the contracted amounts.

In addition to the balances above, the Company had Payables to clearing services customers of $142,108 at December 31, 2014 associated with the KGL clearing business, which was included in Liabilities held for sale.  These amounts represented cash which had been payable to the Company’s clearing customers that was held with the Company’s third-party general clearing members and were included within Cash and cash equivalents, Cash and securities segregated under federal and other regulations or Receivables from brokers, dealers and clearing organizations as follows:

	December 31, 2014
Cash and cash equivalents	11,162
Cash segregated under federal and other regulations	52,160
Receivables from brokers, dealers, and clearing organizations	78,786
Total	$	142,108

As the transaction to sell KGL was completed in March 2015 the Company had no Payables to clearing service customers as of March 31, 2015.  See Note 4 for further information on the sale of KGL.

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GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2015

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

6.     GOODWILL AND INTANGIBLE ASSETS

Goodwill—Changes in the carrying amount of the Company’s goodwill for the three months ended March 31, 2015 were as follows:

	December 31, 2014		Goodwill acquired		Impairment charges		Adjustments		Foreign currency translation			March 31, 2015
Goodwill
All other	134,542		—		—		—		(184		)	134,358
	$	134,542	$	—	$	—	$	—	$	(184	)	$	134,358

Goodwill is required to be tested for impairment at least annually and more frequently when indicators of impairment exist. All of the Company’s goodwill is allocated to its reporting units and the goodwill impairment tests are performed at the reporting unit level. The Company determined its reporting units to be Americas Brokerage; Europe, Middle East and Africa (“EMEA”) Brokerage; Asia Brokerage; Clearing and Backed Trading; Trayport; and Fenics.

No events or changes in circumstances which would indicate goodwill impairment occurred at the Trayport and Fenics reporting units, the Company’s reporting units with remaining goodwill balances, in the three months ended March 31, 2015.

Intangible Assets—Intangible assets consisted of the following:

	March 31, 2015						December 31, 2014
	Gross amount		Accumulated amortization and foreign currency translation		Net carrying value		Gross amount		Accumulated amortization and foreign currency translation		Net carrying value (1)
Amortized intangible assets:
Customer relationships	$	62,334	$	40,604	$	21,730	$	62,334	$	39,203	$	23,131
Trade names	7,904		6,851		1,053		7,904		6,750		1,154
Core technology	8,697		4,508		4,189		8,697		4,105		4,592
Non-compete agreements	3,756		3,434		322		3,756		3,429		327
Patents	3,131		1,844		1,287		3,131		1,719		1,412
Other	647		386		261		647		358		289
Total	$	86,469	$	57,627	$	28,842	$	86,469	$	55,564	$	30,905

(1) Excluded from net carrying value as of December 31, 2014 is $3,715 of customer relationships,  $576 of trade names and $11 of non-compete agreements with indefinite useful lives related to KGL that were  held for sale. As discussed in Note 4, such amounts were included in Assets held for sale as of December 31, 2014 prior to the disposal of KGL during the first quarter of 2015.

Intangible amortization expense for the three months ended March 31, 2015 and 2014 was $1,657 and $2,469, respectively.

At March 31, 2015, expected amortization expense for the definite lived intangible assets is as follows:

2015	$	4,842
2016	5,941
2017	4,117
2018	3,298
2019	3,081
Thereafter	7,563
Total	$	28,842

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SHORT-TERM BORROWINGS AND LONG-TERM DEBT

3 Months Ended

Mar. 31, 2015

SHORT-TERM BORROWINGS AND LONG-TERM DEBT

SHORT-TERM BORROWINGS AND LONG-TERM DEBT

8.     SHORT-TERM BORROWINGS AND LONG-TERM DEBT

The Company’s outstanding debt obligations consisted of the following:

		March 31,	December 31,
		2015	2014
8.375% Senior Notes due 2018	$	240,000	$	240,000
Loans pursuant to Credit Agreement		60,000	10,000
Total	$	300,000	$	250,000

The Company’s debt obligations are carried at historical amounts. The fair value of the Company’s Long-term debt obligations, categorized within Level 2 of the fair value hierarchy, is measured primarily using pricing service data from external providers.  The carrying amounts and estimated fair values of the Company’s Long-term debt obligations are as follows:

		March 31, 2015				December 31, 2014
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
8.375% Senior Notes	$	240,000	$	264,528	$	240,000	$	272,568

8.375% Senior Notes

In July 2011, the Company issued $250,000 in aggregate principal amount of 8.375% Senior Notes (the “8.375% Senior Notes”) due 2018 in a private offering (the “Offering”) to qualified institutional buyers pursuant to Rule 144A and to certain persons in offshore transactions pursuant to Regulation S, each under the Securities Act of 1933, as amended (the “Securities Act”).  The notes were priced to investors at 100% of their principal amount, and mature in July 2018. Interest on these notes is payable, semi-annually in arrears on the 19th of January and July. Transaction costs of approximately $9,100 related to the 8.375% Senior Notes were deferred and are being amortized over the term of the notes.  On December 21, 2011, the Company completed an exchange offer for the 8.375% Senior Notes whereby it exchanged $250,000 in aggregate principal amount of the 8.375% Senior Notes for 8.375% Senior Notes that are registered under the Securities Act.

In March 2013, the Company repurchased $10,000 principal amount of its 8.375% Senior Notes on the open market for an aggregate purchase price of $9,602, including accrued interest and sales commissions. The Company funded the repurchase of these notes with borrowings under its Credit Agreement.

On January 18, 2013, Moody’s Investor Services lowered its credit rating on the Company’s 8.375% Senior Notes two notches to B1, which increased the Company’s applicable per annum interest, effective January 19, 2013, by an additional 50 basis points. On April 19, 2013, Fitch Ratings, Inc. (“Fitch”) further lowered its credit rating on the Company’s 8.375% Senior Notes two notches to BB and revised its outlook from Stable to Negative. This credit rating downgrade by Fitch increased our applicable per annum interest by an additional 50 basis points, effective July 19, 2013. On June 26, 2013, Standard & Poor’s (“S&P”) further lowered its credit rating on the Company’s 8.375% Senior Notes one notch to B+ and revised its outlook from Negative to Stable. This credit rating downgrade by S&P increased the Company’s applicable per annum interest by an additional 25 basis points, effective July 19, 2013.

Pursuant to the terms of the 8.375% Senior Notes, the cumulative effect of downgrades to the Company’s credit rating by rating agencies subsequent to the issuance of our 8.375% Senior Notes resulted in 200 basis points penalty interest, which is the maximum increase permitted under the indenture. The additional 200 basis points of interest equates to $4,800 in additional interest expense per annum, based on the aggregate amount of outstanding principal as of March 31, 2015.

At March 31, 2015 and December 31, 2014, unamortized deferred financing fees related to the 8.375% Senior Notes of $4,108 and $4,420, respectively, were recorded within Other assets and the Company was in compliance with all applicable covenants.

Credit Agreement

In March 2013, the Company entered into an amendment to its second amended and restated credit agreement (as amended, the “Credit Agreement”) with Bank of America, N.A. and certain other lenders. The Credit Agreement provided for maximum revolving loans of up to $75,000 until December 2013, at which time $18,750 of the lender commitments were due to mature and the remaining $56,250 of lender commitments were due to mature in December 2015.

In December, 2013, the various lenders under the Credit Agreement executed an assignment and assumption agreement pursuant to which the extending lenders under the Credit Agreement assumed the lender commitments of the non-extending lender and the Company has consented to the assignment.  As a result, the borrowing capacity will remain at $75,000 until the Credit Agreement matures in December 2015. The Credit Agreement provides for up to $50,000 for letters of credit.

In February 2015, in connection with the transactions contemplated by the Tender Offer Agreement, the Company entered into a third amendment to the Credit Agreement to permit the transactions contemplated by the Tender Offer Agreement, including by amending the definition of “Change of Control” to permit BGC to acquire shares of the equity of the Company in excess of 35% without triggering a “Change of Control” under the Credit Agreement.

The Credit Agreement contains certain financial and other covenants. The financial covenants contained in our Credit Agreement require that we maintain minimum consolidated capital, as defined, of no less than $375,000 at any time.  The amendment to the Credit Agreement executed in July 2014 reduced the required minimum amount of consolidated capital by any goodwill or asset impairment charge in an aggregate amount not to exceed $160,000 contained in our financial statements in any of the fiscal quarters ending June 30, 2014, September 30, 2014 or December 31, 2014.  In April 2015, GFI entered into a fourth amendment to the Credit Agreement, whereby the minimum consolidated capital the Company is required to maintain was adjusted to $215,000. The Company was in compliance with all applicable covenants at March 31, 2015 and December 31, 2014.

Revolving loans may be either base rate loans or Eurocurrency rate loans. Eurocurrency rate loans bear interest at the annualized rate of one-month LIBOR plus the application margin and base rate loans bear interest at a rate per annum equal to a prime rate plus the applicable margin. Letter of credit fees per annum are equal to the applicable margin times the outstanding amount drawn under such letter of credit. As long as no default has occurred under the Credit Agreement, the applicable margin for base rate and Eurocurrency rate loans and letters of credit is based on a matrix that varies with a ratio of outstanding debt to EBITDA, as defined in the Credit Agreement.

The interest rate of the outstanding loan under the Credit Agreement was 5.50% at March 31, 2015. At March 31, 2015 and December 31, 2014, unamortized deferred financing fees related to the Credit Agreement of $458 and $618, respectively, were recorded within Other assets.

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DERIVATIVE FINANCIAL INSTRUMENTS (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Consolidated Variable Interest Entities
Notional amount of derivatives
Estimated exposure to economic loss	$ 5,633	$ 5,298
Long
Notional amount of derivatives
Total derivative notional amounts	5,700,625	7,806,004
Short
Notional amount of derivatives
Total derivative notional amounts	6,271,570	9,023,447
Foreign exchange derivative contracts | Long
Notional amount of derivatives
Total derivative notional amounts	14,368	3,185
Foreign exchange derivative contracts | Short
Notional amount of derivatives
Total derivative notional amounts	124,313	415,756
Commodity derivative contracts | Long
Notional amount of derivatives
Total derivative notional amounts	582,250	675,686
Commodity derivative contracts | Short
Notional amount of derivatives
Total derivative notional amounts	580,670	692,855
Fixed income derivative contracts | Long
Notional amount of derivatives
Total derivative notional amounts	5,101,596	7,124,375
Fixed income derivative contracts | Short
Notional amount of derivatives
Total derivative notional amounts	5,564,179	7,911,965
Equity derivative contracts | Long
Notional amount of derivatives
Total derivative notional amounts	2,411	2,758
Equity derivative contracts | Short
Notional amount of derivatives
Total derivative notional amounts	2,408	2,871
Futures contracts | Long
Notional amount of derivatives
Total derivative notional amounts	5,699,521	7,804,981
Futures contracts | Short
Notional amount of derivatives
Total derivative notional amounts	$ 6,270,828	$ 9,023,087

XML

DERIVATIVE FINANCIAL INSTRUMENTS (Details 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Derivative Assets:
Gross Amounts of Recognized Assets	$ 5,613	$ 3,971
Gross Amounts Offset in the Condensed Consolidated Statements of Financial Position	(651)	(338)
Net Amounts of Assets Offset in the Condensed Consolidated Statements of Financial Position	4,962	3,633
Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition	4,962	3,633
Derivative Liabilities:
Gross Amounts of Recognized Liabilities	2,818	1,725
Gross Amounts Offset in the Condensed Consolidated Statements of Financial Position	(651)	(338)
Net Amounts of Liabilities Offset in the Condensed Consolidated Statements of Financial Position	2,167	1,387
Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition	2,167	1,387
Counterparty A
Derivative Assets:
Gross Amounts of Recognized Assets	2,599	1,630
Net Amounts of Assets Offset in the Condensed Consolidated Statements of Financial Position	2,599	1,630
Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition	2,599	1,630
Derivative Liabilities:
Gross Amounts of Recognized Liabilities	747	394
Net Amounts of Liabilities Offset in the Condensed Consolidated Statements of Financial Position	747	394
Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition	747	394
Counterparty B
Derivative Assets:
Gross Amounts of Recognized Assets	1,756	1,789
Gross Amounts Offset in the Condensed Consolidated Statements of Financial Position	(414)	(338)
Net Amounts of Assets Offset in the Condensed Consolidated Statements of Financial Position	1,342	1,451
Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition	1,342	1,451
Derivative Liabilities:
Gross Amounts of Recognized Liabilities	414	338
Gross Amounts Offset in the Condensed Consolidated Statements of Financial Position	(414)	(338)
Counterparty C
Derivative Assets:
Gross Amounts of Recognized Assets	1,021	552
Net Amounts of Assets Offset in the Condensed Consolidated Statements of Financial Position	1,021	552
Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition	1,021	552
Derivative Liabilities:
Gross Amounts of Recognized Liabilities	1,420	993
Net Amounts of Liabilities Offset in the Condensed Consolidated Statements of Financial Position	1,420	993
Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition	1,420	993
Counterparty D
Derivative Assets:
Gross Amounts of Recognized Assets	237
Gross Amounts Offset in the Condensed Consolidated Statements of Financial Position	(237)
Derivative Liabilities:
Gross Amounts of Recognized Liabilities	237
Gross Amounts Offset in the Condensed Consolidated Statements of Financial Position	$ (237)

XML

DERIVATIVE FINANCIAL INSTRUMENTS (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Derivative Assets
Total fair value of derivative contracts	$ 5,613	$ 3,971
Counterparty netting	(651)	(338)
Total fair value	4,962	3,633
Derivative Liabilities
Total fair value of derivative contracts	2,818	1,725
Counterparty netting	(651)	(338)
Total fair value	2,167	1,387
Derivatives not designated as hedging instruments
Derivative Assets
Total fair value of derivative contracts	5,612	3,971
Counterparty netting	(651)	(338)
Total fair value	4,961	3,633
Derivative Liabilities
Total fair value of derivative contracts	2,817	1,725
Counterparty netting	(651)	(338)
Total fair value	2,166	1,387
Foreign exchange derivative contracts | Derivatives not designated as hedging instruments
Derivative Assets
Total fair value of derivative contracts	3,962	2,773
Derivative Liabilities
Total fair value of derivative contracts	2,223	1,387
Foreign exchange derivative contracts | Derivatives designated as hedging instruments
Derivative Liabilities
Notional value of derivative	56,022	69,692
Euro-denominated and British pound-denominated balance sheet positions | Derivatives designated as hedging instruments
Derivative Liabilities
Notional value of derivative	16,110	20,568
Commodity derivative contracts | Derivatives not designated as hedging instruments
Derivative Assets
Total fair value of derivative contracts	1,650	1,198
Derivative Liabilities
Total fair value of derivative contracts	$ 594	$ 338

XML

SHORT-TERM BORROWINGS AND LONG-TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2015

SHORT-TERM BORROWINGS AND LONG-TERM DEBT

Schedule of outstanding debt obligations

		March 31,	December 31,
		2015	2014
8.375% Senior Notes due 2018	$	240,000	$	240,000
Loans pursuant to Credit Agreement		60,000	10,000
Total	$	300,000	$	250,000

Schedule of the carrying amounts and estimated fair values of the Company's Long-term debt obligations

		March 31, 2015				December 31, 2014
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
8.375% Senior Notes	$	240,000	$	264,528	$	240,000	$	272,568

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SHORT-TERM BORROWINGS AND LONG-TERM DEBT (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended			1 Months Ended	3 Months Ended	45 Months Ended	1 Months Ended
	Jun. 26, 2013	Apr. 19, 2013	Jan. 18, 2013	Jul. 31, 2011	Mar. 31, 2015	Mar. 31, 2015	Feb. 28, 2015	Jul. 31, 2014	Dec. 31, 2014	Apr. 29, 2015	Apr. 28, 2015	Mar. 31, 2013	Dec. 21, 2011	Apr. 30, 2015
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Long-term debt					$ 240,000	$ 240,000			$ 240,000
Loans pursuant to Credit Agreement					60,000	60,000			10,000
Total					300,000	300,000			250,000
Unamortized deferred financing fees					4,566	4,566			5,038
8.375% senior notes
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Long-term debt					240,000	240,000			240,000
Carrying Amount					240,000	240,000			240,000
Fair Value					264,528	264,528			272,568
Interest rate (as a percent)				8.375%	8.375%	8.375%			8.375%	8.375%	8.375%
Aggregate principal amount				250,000
Price of notes as percentage of principal amount				100.00%
Transaction costs				9,100
Aggregate principal amount of notes exchanged for notes registered under the Securities Act													250,000
Principal amount repurchased												10,000
Aggregate purchase price												9,602
Increase in per annum interest rate (as a percent)	0.25%	0.50%	0.50%			2.00%
Additional interest per annum					4,800
Unamortized deferred financing fees					4,108	4,108			4,420
Credit Agreement
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Unamortized deferred financing fees					458	458			618
Maximum borrowings					75,000	75,000						75,000
Change of control trigger (as a percent)							35.00%
Minimum consolidated capital under debt agreement								375,000
Interest rate (as a percent)					5.50%	5.50%
Credit Agreement | Maximum
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Goodwill or asset impairment charge threshold limit								160,000
Credit Agreement | Subsequent events
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Minimum consolidated capital under debt agreement														215,000
Credit Agreement | Maturity by December 2013
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Maximum borrowings												18,750
Credit Agreement | Maturity by December 2015
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Maximum borrowings												56,250
Letters of credit
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Maximum borrowings					$ 50,000	$ 50,000

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MARKET AND CREDIT RISKS

3 Months Ended

Mar. 31, 2015

MARKET AND CREDIT RISKS

MARKET AND CREDIT RISKS

13.     MARKET AND CREDIT RISKS

Disclosure regarding the Company’s financial instruments with market and credit risks are described in “Note 16—Market and Credit Risks” of the Notes to the Consolidated Financial Statements contained in the Company’s 2014 Form 10-K.  There have been no material changes to these risks during the three months ended March 31, 2015.

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SEGMENT AND GEOGRAPHIC INFORMATION

3 Months Ended

Mar. 31, 2015

SEGMENT AND GEOGRAPHIC INFORMATION

SEGMENT AND GEOGRAPHIC INFORMATION

18.    SEGMENT AND GEOGRAPHIC INFORMATION

In accordance with ASC 280-10, Segment Reporting (“ASC 280-10”) and based on the nature of the Company’s operations, products and services in each geographic region, the Company determined that it has four reportable segments: (i) Americas Brokerage, (ii)  EMEA Brokerage, (iii) Asia Brokerage and (iv) Clearing and Backed Trading. The Company’s brokerage operations provide brokerage services in four broad product categories: fixed income, financial, equity and commodity. The Clearing and Backed Trading segment encompasses the Company’s clearing, risk management, settlement and other back-office services, as well as the capital we provide to start-up trading groups, small hedge funds, market-makers and individual traders. Information about other business activities is disclosed in an “All Other” category. All Other includes the results of the Company’s software, analytics and market data operations. All Other also includes revenues and expenses that are not directly assignable to one of the Company’s reportable segments, primarily consisting of indirect costs related to the Company’s brokerage segments as well as all of the Company’s corporate business activities.

The accounting policies of the segments are the same as those described above in Note 3—Summary of Significant Accounting Policies. The Company evaluates performance of the operating segments based on income (loss) before income taxes, which it defines as revenues less direct expenses.

Revenues within each brokerage segment include revenues that are directly related to providing brokerage services along with interest and other income (loss) directly attributable to the operating segment. Revenues within the Clearing and Backed Trading segment primarily include revenues that are directly related to providing clearing services along with the Company’s share of profit (loss) on trading activity from capital investments. The Company’s Clearing and Backed Trading segment incurs exchange fees on behalf of its clients, which are reflected within Interest and transaction-based expenses. The reimbursement of these fees from the Company’s clients is reflected within Total Revenues. Therefore, the Company evaluates the top-line performance of its Clearing and Backed Trading segment using Revenues, net of interest and transaction-based expenses.

Direct expenses of the operating segments are those expenses that are directly related to providing the brokerage or clearing services and trading activities of the operating segments and include compensation expense related to the segment management and staff, communication and market data, travel and promotion, and certain professional fees and other expenses that are directly incurred by the operating segments. However, the Company does not allocate to its brokerage operating segments certain expenses that it manages separately at the corporate level. The unallocated costs include rent and occupancy, depreciation and amortization, professional fees, interest on borrowings and other expenses and are included in the All Other operating segment. Management generally does not consider the unallocated costs in its performance measurement of its reportable segments.

Selected financial information for the Company’s reportable segments is presented below for periods indicated:

	Three Months Ended March 31, 2015
	Americas Brokerage		EMEA Brokerage		Asia Brokerage		Clearing and Backed Trading		All Other			Total
Total revenues	$	57,552	$	84,500	$	20,757	$	28,253	$	40,460		$	231,522
Revenues, net of interest and transaction-based expenses	54,926		81,654		20,663		7,217		41,156			205,616
Income (loss) before income taxes	16,480		27,622		7,659		1,301		(84,601		)	(31,539		)

	Three Months Ended March 31, 2014
	Americas Brokerage		EMEA Brokerage		Asia Brokerage		Clearing and Backed Trading		All Other			Total
Total revenues	$	61,698	$	89,300	$	19,223	$	44,293	$	26,225		$	240,739
Revenues, net of interest and transaction-based expenses	58,752		86,427		19,103		11,140		27,005			202,427
Income (loss) before income taxes	14,342		28,704		5,632		931		(44,106		)	5,503

In addition, with the exception for goodwill, the Company does not identify or allocate assets by operating segment, nor does its chief operating decision maker evaluate operating segments using discrete asset information. See Note 6 for goodwill by reportable segment.

For the three months ended March 31, 2015 and 2014, the U.K. is the only individual foreign country that accounts for 10% or more of the Company’s total revenues and total long-lived assets. Information regarding revenue for the three ended March 31, 2015 and 2014, and information regarding long-lived assets (defined as property, equipment, leasehold improvements and software inventory) in geographic areas as of March 31, 2015 and December 31, 2014, are as follows:

	Three Months Ended  March 31,
	2015		2014
Revenues:
United States	$	68,766	$	63,213
United Kingdom	107,351		124,305
Other	55,405		53,221
Total	$	231,522	$	240,739
	Three Months Ended  March 31,
	2015		2014
Revenues, net of interest and transaction-based expenses:
United States	$	67,937	$	62,096
United Kingdom	83,942		89,819
Other	53,737		50,512
Total	$	205,616	$	202,427

	March 31, 2015		December 31, 2014
Long-lived Assets, as defined:
United States	$	47,262	$	48,506
United Kingdom	6,935		6,976
Other	2,960		3,850
Total (1)	$	57,157	$	59,332

(1) Excluded from the March 31, 2015 balance is $157 of Property, equipment, leasehold improvements, net related to KBL. Excluded from the December 31, 2014 balance is $2,122 of Property, equipment, leasehold improvements, net related to KGL and KBL.  As discussed in Note 4, such amounts are included in Assets held for sale.

Revenues are attributed to geographic areas based on the location of the particular subsidiary of the Company which generated the revenues.

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OTHER ASSETS AND OTHER LIABILITIES (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Other assets
Deferred tax assets	$ 108,561	$ 91,935
Prepaid bonuses	15,905	16,523
Forgivable employee loans and advances to employees	15,022	15,072
Investments accounted for under the cost method and equity method	14,375	14,872
Financial instruments owned	5,302	3,865
Deferred financing fees	4,566	5,038
Software inventory, net	3,414	3,435
Other	26,714	21,981
Total Other assets	$ 193,859	$ 172,721

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ORGANIZATION AND BUSINESS (Details)	Mar. 31, 2015
BGC
Organization and Business
Ownership interest by related party (as a percent)	56.00%
JPI
Organization and Business
Ownership interest by related party (as a percent)	36.00%

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Net (loss) income before attribution to non-controlling stockholders	$ (19,147)	$ 4,409
Other comprehensive (loss) income:
Foreign currency translation adjustment	(6,250)	2,241
Unrealized loss on available-for-sale securities, net of tax		(1,069)	[1]
Total other comprehensive (loss) income	(6,250)	1,172
Comprehensive (loss) income including non-controlling stockholders	(25,397)	5,581
Comprehensive income attributable to non-controlling stockholders	319	412
GFI's comprehensive (loss) income	$ (25,716)	$ 5,169

[1] Amounts are net of benefit from income taxes of $0 and $341 for the three months ended March 31, 2015 and 2014, respectively.

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ACQUISITION BY BGC PARTNERS, INC. AND TERMINATION OF THE CME MERGER

3 Months Ended

Mar. 31, 2015

ACQUISITION BY BGC PARTNERS, INC. AND TERMINATION OF THE CME MERGER

ACQUISITION BY BGC PARTNERS, INC. AND TERMINATION OF THE CME MERGER

2.      ACQUISITION BY BGC PARTNERS, INC. AND TERMINATION OF THE CME MERGER

On February 19, 2015, the Company, BGC and BGC Partners, L.P. entered into a Tender Offer Agreement pursuant to which BGC and BGC Partners, L.P. agreed to amend their previously commenced tender offer to purchase all of the outstanding shares of common stock of the Company for $6.10 per share.  On February 26, 2015, BGC successfully completed the BGC Tender and on March 4, 2015 BGC Partners, L.P. paid for the 54,274,212 shares of Common Stock tendered pursuant to the BGC Tender for an aggregate purchase price of $331,073. The tendered shares, together with the 17,120,464 shares already owned by BGC, represented approximately 56% of the outstanding shares of the Company’s common stock as of March 31, 2015.   See Note 20 on Subsequent events for further information.

As a result of the transaction, GFI is a controlled company of BGC and operates as a division of BGC. Going forward, BGC and GFI are expected to remain separately branded divisions.

Prior to the completion of the tender offer, the Company was a party to a series of agreements, including an Agreement and Plan of Merger (the “CME Merger Agreement”) and a Purchase Agreement (the “IDB Purchase Agreement”), each dated as of July 30, 2014, as amended, with CME Group Inc. (“CME”) and certain of its affiliates, whereby the Company had agreed to merge with and into a wholly owned subsidiary of CME (the “CME Merger”) and, immediately following such merger, a private consortium of current GFI management would acquire the Company’s wholesale brokerage and clearing businesses from CME (such transactions collectively, the “CME Transaction”). In addition, CME, JPI and certain other stockholders of GFI, who collectively control approximately 38% of the outstanding shares of our common stock, entered into an agreement, dated as of July 30, 2014 (the “Support Agreement”), that provided for such stockholders to vote for the CME Transaction and vote against any alternative transaction and that prevented such stockholders from transferring their shares, including by tendering into the tender offer. The CME Merger Agreement and the CME Transaction were terminated on January 30, 2015. The restrictions in the Support Agreement continue until on or about January 30, 2016.

Pursuant to the terms of the CME Merger Agreement, the Company was required to reimburse CME for its expenses up to $7,065and such reimbursement was paid in February 2015. Additionally, the Company was required to pay CME a termination fee equal to $17,663(which is the total termination fee of $24,728 less the expense reimbursement that has already been paid to CME) and such transaction fee was paid in March 2015. The termination fee was payable if within 12 months of such termination the Company consummated, or entered into a definitive agreement to consummate, a transaction in which the Company or 20% or more of the fair value of the assets or of any class of equity or voting securities of the Company and its subsidiaries, the subsidiaries that were to be retained by CME in the CME Merger Agreement, or Trayport or Fenics was sold.

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details)	Mar. 31, 2015 item
Valuation Techniques
Number of acquisitions with contingent consideration	1

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SEGMENT AND GEOGRAPHIC INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014
SEGMENT AND GEOGRAPHIC INFORMATION
Number of reportable segments	4
Number of broad product categories	4
SEGMENT AND GEOGRAPHIC INFORMATION
Total revenues	$ 231,522	$ 240,739
Revenues, net of interest and transaction-based expenses	205,616	202,427
Income (loss) before income taxes	(31,539)	5,503
Reportable segment | Americas Brokerage
SEGMENT AND GEOGRAPHIC INFORMATION
Total revenues	57,552	61,698
Revenues, net of interest and transaction-based expenses	54,926	58,752
Income (loss) before income taxes	16,480	14,342
Reportable segment | EMEA Brokerage
SEGMENT AND GEOGRAPHIC INFORMATION
Total revenues	84,500	89,300
Revenues, net of interest and transaction-based expenses	81,654	86,427
Income (loss) before income taxes	27,622	28,704
Reportable segment | Asia Brokerage
SEGMENT AND GEOGRAPHIC INFORMATION
Total revenues	20,757	19,223
Revenues, net of interest and transaction-based expenses	20,663	19,103
Income (loss) before income taxes	7,659	5,632
Reportable segment | Clearing and Backed Trading
SEGMENT AND GEOGRAPHIC INFORMATION
Total revenues	28,253	44,293
Revenues, net of interest and transaction-based expenses	7,217	11,140
Income (loss) before income taxes	1,301	931
All other
SEGMENT AND GEOGRAPHIC INFORMATION
Total revenues	40,460	26,225
Revenues, net of interest and transaction-based expenses	41,156	27,005
Income (loss) before income taxes	$ (84,601)	$ (44,106)

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RELATED PARTIES

3 Months Ended

Mar. 31, 2015

Related Parties

RELATED PARTIES

19.    RELATED PARTIES

As of March 31, 2015, entities affiliated with BGC were the beneficial owners of approximately 56 % of the Company’s common stock.  Therefore, GFI is a controlled company of BGC and operates as a division of BGC.  See Note 2 for further information on BGC’s acquisition of the Company.

As of March 31, 2015, the Company had $60,256 of receivables from BGC, which primarily consisted of $60,000 of receivables for loans which were issued by the Company on March 27, 2015, comprised of a $40,000 loan, bearing interest at 3.75% per annum and due June 30, 2015 and a $20,000 loan, bearing interest at 3.75% per annum and payable on demand.  In addition, certain of the Company’s subsidiaries transact with BGC and its affiliated entities. The Company had approximately $12,898 included in payables to brokers, dealers and clearing organizations related to matched principal transactions in which BGC and its affiliates were the counterparty. For the three months ended March 31, 2015 and 2014, the Company earned both software and brokerage revenues related to transactions with BGC and its affiliated entities. The revenues earned from BGC and its affiliated entities did not have a material impact on any of the periods presented in the Company’s Condensed Consolidated Financial Statements.

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2015

DERIVATIVE FINANCIAL INSTRUMENTS

Schedule of fair values of derivative contracts on a gross and net basis

	March 31, 2015						December 31, 2014
Derivatives not designated as hedging instruments under ASC 815-10 (1)	Derivative    Assets(2)			Derivative   Liabilities(3)			Derivative   Assets(2)			Derivative Liabilities(3)
Foreign exchange derivative contracts	$	3,962		$	2,223		$	2,773		$	1,387
Commodity derivative contracts	1,650			594			1,198			338
Total fair value of derivative contracts	$	5,612		$	2,817		$	3,971		$	1,725
Counterparty netting	(651		)	(651		)	(338		)	(338		)
Total fair value	$	4,961		$	2,166		$	3,633		$	1,387

(1) Excluded from the above table is variation margin on open long and short futures contracts which is included in Receivables from brokers, dealers and clearing organizations and Payables to brokers, dealers and clearing organizations,  on the Condensed Consolidated Statements of Financial Condition. See Note 14 for further details about variation margin balances on open long and short futures contracts as of March 31, 2015 and December 31, 2014.  Gross notional amounts on these futures contracts are included in the table below which details outstanding long and short notional amounts of derivative financial instruments.

(2) Reflects options and forwards contracts within Other assets.

(3) Reflects options and forwards contracts within Other liabilities.

Schedule of outstanding long and short notional amounts on a gross basis of derivative financial instruments

	March 31, 2015 (1)				December 31, 2014 (2)
	Long		Short		Long		Short
Foreign exchange derivative contracts	$	14,368	$	124,313	$	3,185	$	415,756
Commodity derivative contracts	582,250		580,670		675,686		692,855
Fixed income derivative contracts	5,101,596		5,564,179		7,124,375		7,911,965
Equity derivative contracts	2,411		2,408		2,758		2,871
Total derivative notional amounts	$	5,700,625	$	6,271,570	$	7,806,004	$	9,023,447

(1) Notional amounts include gross notionals on open long and short futures contracts of $5,699,521 and $6,270,828 respectively, as of March 31, 2015. These gross notional amounts primarily relate to positions held by a consolidated VIE for which the Company’s exposure to economic loss is approximately $5,633 as of March 31, 2015. See Note 16 for further information.

(2) Notional amounts include gross notionals on open long and short futures contracts of $7,804,981 and $9,023,087, respectively, as of December 31, 2014.  These gross notional amounts primarily relate to positions held by a consolidated VIE for which the Company’s exposure to economic loss is approximately $5,298 as of December 31, 2014. See Note 16 for further information.

Summary of the effect of derivative contracts on the Consolidated Statements of Operations

	Location of Gain (Loss)	Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments under ASC 815-10	Recognized in Income on Derivatives	For the Three Months Ended March 31, 2015		For the Three Months Ended March 31, 2014
Foreign exchange derivative contracts	(1)	$	4,675	$	295
Commodity derivative contracts	Principal transactions	2,881		1,753
Fixed income derivative contracts	Principal transactions	1,587		3,130
Equity derivative contracts	(2)	164		7

(1) For the three months ended March 31, 2015, approximately $3,601 of gains on foreign exchange derivative contracts were included within Other income, net and approximately $1,074 of gains on foreign currency options were included within Principal transactions.  For the three months ended March 31, 2014, approximately $202 of gains on foreign exchange derivative contracts were included within Other income, net and approximately $93 of gains on foreign currency options were included within Principal transactions.

(2) For the three months ended March 31, 2015, approximately $164 of gains on equity derivative contracts were included within Principal transactions. For the three months ended March 31, 2014, approximately $14 of losses on equity derivative contracts were included within, Other income, net and approximately $21 of gains on equity derivative contracts were included within Principal transactions.

Summary of derivative contracts, by counterparty, including the gross amounts offset in the Condensed Consolidated Statements of Financial Position

The following is a summary of derivative contracts, by counterparty, including the gross amounts offset in the Condensed Consolidated Statements of Financial Position as of March 31, 2015:

			Gross Amount Offset in the			Net Amounts of Assets Offset in the		Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition
Counterparties (1)	Gross Amounts of Recognized Assets		Condensed Consolidated Statements of Financial Position			Condensed Consolidated Statements of Financial Position (2)		Derivatives (3)		Cash Collateral Received/ (Pledged)		Net Amount
Derivative Assets:
Counterparty A	$	2,599	$	—		$	2,599	$	—	$	—	$	2,599
Counterparty B	1,756		(414		)	1,342		—		—		1,342
Counterparty C	1,021		—			1,021		—		—		1,021
Counterparty D	237		(237		)	—		—		—		—
Total	$	5,613	$	(651	)	$	4,962	$	—	$	—	$	4,962
Derivative Liabilities:
Counterparty A	$	747	$	—		$	747	$	—	$	—	$	747
Counterparty B	414		(414		)	—		—		—		—
Counterparty C	1,420		—			1,420		—		—		1,420
Counterparty D	237		(237		)	—		—		—		—
Total	$	2,818	$	(651	)	$	2,167	$	—	$	—	$	2,167

(1) Excluded from the above table is variation margin on open long and short futures contracts which is included in Receivables from brokers, dealers and clearing organizations  and Payables to brokers, dealers and clearing organizations,  on the Condensed Consolidated Statements of Financial Condition. See Note 14 for further details about variation margin balances on open long and short futures contracts as of March 31, 2015.

(2) Derivative assets and derivative liabilities are reflected within Other assets and Other Liabilities, respectively.

(3) As of March 31, 2015, the Company does not have any derivative positions under a master netting agreement that are not netted.

The following is a summary of derivative contracts, by counterparty, including the gross amounts offset in the Consolidated Statements of Financial Position as of December 31, 2014:

			Gross Amounts Offset in the			Net Amounts of Assets Offset in the		Gross Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition
Counterparties (1)	Gross Amounts of Recognized Assets		Condensed Consolidated Statements of Financial Position			Condensed Consolidated Statements of Financial Position (2)		Derivatives (3)		Cash Collateral Received/ (Pledged)		Net Amount
Derivative Assets:
Counterparty A	$	1,630	$	—		$	1,630	$	—	$	—	$	1,630
Counterparty B	1,789		(338		)	1,451		—		—		1,451
Counterparty C	552		—			552		—		—		552
Total	$	3,971	$	(338	)	$	3,633	$	—	$	—	$	3,633
Derivative Liabilities:
Counterparty A	$	394	$	—		$	394	$	—	$	—	$	394
Counterparty B	$	338	$	(338	)	$	—	$	—	$	—	$	—
Counterparty C	993		—			993		—		—		993
Total	$	1,725	$	(338	)	$	1,387	$	—	$	—	$	1,387

(1) Excluded from the above table is variation margin on open long and short futures contracts which is included in Receivables from brokers, dealers and clearing organizations and Payables to brokers, dealers and clearing organizations,  on the Condensed Consolidated Statements of Financial Condition. See Note 14 for further details about variation margin balances on open long and short futures contracts as of December 31, 2014.

(2) Derivative assets and derivative liabilities are reflected within Other assets and Other Liabilities, respectively.

(3) As of December 31, 2014, the Company does not have any derivative positions under a master netting agreement that are not netted.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2015

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

12.     COMMITMENTS AND CONTINGENCIES

Purchase Obligations—The Company has various unconditional purchase obligations. These obligations are for the purchase of market data from a number of information service providers during the normal course of business. As of March 31, 2015, the Company had total purchase commitments for market data of approximately $18,898, with $15,792 due within the next twelve months, $2,839 due between one to three years and $267 due between three and five years. Additionally, the Company had $4,574 of other purchase commitments including $4,023 for hosting and software license agreements , and $551 primarily related to network upgrades. Of these other purchase commitments, approximately $2,920 is due within the next twelve months.

Contingencies—In the normal course of business, the Company and certain of its subsidiaries included in the Condensed Consolidated Financial Statements are, and have been in the past, involved in various lawsuits and legal proceedings and are, and have been in the past, involved in certain regulatory examinations. The Company’s unresolved legal proceedings and regulatory examinations are at varying stages of adjudication, arbitration or investigation and involve a variety of claims. In view of the inherent difficulty of predicting the outcome of such litigation and regulatory matters, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties, if any, relating to each matter may be.

The Company is subject to the possibility of losses from these various contingencies. Considerable judgment is necessary to estimate the probability and amount of any loss from such contingencies. In accordance with applicable accounting guidelines, an accrual is made when it is probable that a liability has been incurred or an asset has been impaired and the amount of loss can be reasonably estimated.  Where a loss contingency is not both probable and estimable, the Company does not establish an accrued liability.

The Company is subject to regular examinations by various tax authorities in jurisdictions in which the Company has significant business operations. The Company regularly assesses the likelihood of additional tax assessments that may result from these examinations in each of the tax jurisdictions. A tax accrual has been established, which the Company believes to be adequate in relation to the potential for additional tax assessments. Once established, the accrual may be adjusted based on new information or events. The imposition of additional tax assessments, penalties or fines by a tax authority could have a material impact on the Company’s effective tax rate.

Additionally, the Company has recorded reserves for certain contingencies to which it may have exposure, such as contingencies related to the employer portion of National Insurance Contributions in the U.K.

Following the announcement of the CME Merger, nine putative class action complaints challenging the CME Merger were filed on behalf of purported stockholders of GFI (one of which also purported to be brought derivatively on behalf of GFI), two in the Supreme Court of the State of New York, County of New York, six in the Court of Chancery of the State of Delaware, and one in the United States District Court for the Southern District of New York. The complaints were captioned Coyne v. GFI Group Inc., et al., Index No. 652704/2014 (N.Y. Sup. Ct., filed September 4, 2014), Suprina v. GFI Group, Inc., et al., Index No. 652668/2014 (N.Y. Sup. Ct., filed August 29, 2014), Brown v. GFI Group Inc., et al., Civil Action No. 10082-VCL (Del. Ch., filed September 3, 2014), Hughes v. CME Group, Inc., et al., Civil Action No. 10103-VCL (Del. Ch., filed September 8, 2014), Al Ammary v. Gooch, et al., Civil Action No. 10125-VCL (Del. Ch., filed September 11, 2014), Giardalas v. GFI Group, Inc., Civil Action No. 10132-VCL (Del. Ch., filed September 15, 2014), City of Lakeland Employees’ Pension Plan v. Gooch, et al., Civil Action No. 10136-VCL (Del. Ch., filed September 16, 2014), Michocki v. Gooch., et al., Civil Action No. 10166-VCL (Del. Ch., filed September 25, 2014) and Szarek v. GFI Group Inc., et al., Case No. 14-CV-8228 (S.D.N.Y., filed October 14, 2014). On September 26, 2014, the Court of Chancery granted voluntary dismissal of the Giardalas action. On October 6, 2014, a consolidation order was entered by Vice Chancellor Laster, consolidating the Delaware cases into the Consolidated Delaware Action.  The consolidation order designated the complaint filed in City of Lakeland Employees’ Pension Plan v. Gooch, et al., Civil Action No. 10136-VCL (Del. Ch.) as the operative complaint in the Consolidated Delaware Action.

The complaints named as Defendants various combinations of the Company, GFI Holdco Ltd. (“IDB Buyer”), the members of the Company’s board of directors, GFI managing director Nick Brown, CME, Commodore Acquisition Corp., Commodore Acquisition LLC, Cheetah Acquisition Corp., Cheetah Acquisition LLC, JPI and New JPI Inc. (“New JPI”). The complaints generally allege, among other things, that the members of the Company’s board of directors breached their fiduciary duties to the Company’s stockholders during merger negotiations by entering into the CME Merger Agreement and approving the CME Merger, and that the Company, CME, Commodore Acquisition Corp., Commodore Acquisition LLC, IDB Buyer, Cheetah Acquisition Corp., Cheetah Acquisition LLC, JPI, and New JPI aided and abetted such breaches of fiduciary duties.  The complaints further allege, among other things, (i) that the merger consideration provided for in the CME Merger Agreement undervalued the Company, (ii) that the sales process leading up to the CME Merger was flawed due to the members of the Company’s board of directors’ and Jefferies’ conflicts of interest, and (iii) that certain provisions of the CME Merger Agreement inappropriately favored CME and precluded or impeded third parties from submitting potentially superior proposals.

In addition, the Hughes complaint asserted a derivative claim on behalf of the Company against the members of the Company’s board of directors for breaching their fiduciary duties of loyalty and care to the Company by negotiating and agreeing to the CME Merger and against Defendants Gooch and Heffron for usurping a corporate opportunity. The Michocki complaint alleged that the CME Merger is not a solitary transaction but a series of related transactions and further alleged that the IDB Transaction must be approved by an affirmative two-thirds vote of the Shares pursuant to the terms of the Charter.

The complaints seek, among other relief: (i) certification of the class, (ii) injunctive relief enjoining the CME Merger, (iii) a declaration that the members of the Company’s board of directors breached their fiduciary duties and that certain provisions of the CME Merger Agreement are unlawful, (iv) a directive to the members of the Company’s board of directors to execute their fiduciary duties to obtain a transaction in the best interest of the Company’s stockholders, (v) rescission of the CME Merger to the extent already implemented, (vi) granting of rescissory damages and an accounting of all of the damages suffered as a result of the alleged wrongdoing, (vii) and reimbursement of fees and costs. The Coyne and Suprina Plaintiffs also demanded a jury trial.

Certain Defendants moved to dismiss or, in the alternative, stay the Coyne and Suprina actions in favor of the Consolidated Delaware Action. A hearing was held on December 15, 2014 on (i) the Defendants’ motions to dismiss or stay the Coyne and Suprina actions; (ii) the Plaintiffs’ motion by order to show cause for consolidation and appointment of a leadership structure; and (iii) Plaintiff Suprina’s motion by order to show cause to compel and expedite discovery. In an order filed on January 30, 2015, the Court ordered the Suprina and Coyne cases consolidated as In re GFI Group Inc. Shareholder Litigation, Index No. 652668/2014. In another order filed that same day, the Court denied Plaintiff Suprina’s motion to compel and expedite discovery.  On March 26, 2015, the Court issued a decision and order granting the Defendants’ motions to dismiss the Coyne and Suprina actions on forum non conveniens grounds and in favor of the Consolidated Delaware Action.  The decision and order were entered in the office of the Clerk of the County of New York on March 27, 2015.  The Court’s judgment dismissing the Coyne and Suprina complaints was entered in the office of the Clerk of the County of New York on April 29, 2015.

On November 18, 2014, the Delaware court entered a Revised Order Setting Expedited Discovery Schedule in the Consolidated Delaware Action. On December 19, 2014, the court entered a Further Revised Scheduling Order scheduling a preliminary injunction hearing for January 16, 2015.  On December 29, 2014, Plaintiffs in the Consolidated Delaware Action filed a Motion for a Preliminary Injunction, and a brief in support thereof, seeking to enjoin enforcement of Article V of the Support Agreement and preliminarily enjoin the stockholder vote on the CME Merger until (i) certain additional disclosures were made and (ii) the Company’s stockholders were provided the opportunity to vote on the CME Merger, the JPI Merger and the IDB Transaction. On January 8, 2015, the parties agreed to move the preliminary injunction hearing from January 16, 2015 to January 20, 2015. On January 15, 2015, the preliminary injunction hearing (scheduled for January 20) was taken off the court’s calendar.

On January 15, 2015, Plaintiffs in the Consolidated Delaware Action filed a Supplement to the Verified Class Action Complaint. On January 30, 2015, Plaintiffs filed a Second Supplement to the Verified Class Action Complaint. On February 4, 2015, Plaintiffs filed a Motion for Expedited Proceedings and a brief in support thereof. On February 6, 2015, the Court scheduled a merits hearing for February 17 and 18, 2015. On February 7, 2015, Plaintiffs filed a Third Supplement to the Verified Class Action Complaint, seeking certain additional injunctive and declaratory relief.On February 11, 2015, the Court, with the consent of the parties, moved the merits hearing (scheduled for February 17 and 18, 2015) to the first available dates on the Court’s schedule after March 4, 2015. On February 20, 2015, Plaintiffs informed the Court that an expedited merits hearing was no longer necessary.  On February 26, 2015, March 17, 2015, and March 18, 2015, the Court granted stipulations and orders extending the time for certain Defendants to answer, move, or otherwise respond to the operative complaint.  On April 16, 2015, the Court granted a stipulation and order pursuant to which certain of the Defendants need not respond to the operative complaint or the supplements thereto and will have thirty days from the filing of an amended complaint to answer, move, or otherwise respond to it.  To date, an amended complaint has not been filed.

In the New York Szarek action, the Court scheduled an initial pretrial conference for December 16, 2014, which the Court adjourned upon application of the parties until March 12, 2015 and adjourned again upon application of Plaintiff until May 21, 2015.

In addition to the foregoing litigation, on November 26, 2014, a putative class action complaint alleging violations of the federal securities laws, captioned Gross v. GFI Group, Inc., et al.,  was filed in the United States District Court for the Southern District of New York. The complaint names the Company, Colin Heffron, Michael Gooch and Nick Brown as Defendants.. The complaint seeks, among other relief: (i) certification of the class, (ii) compensatory damages for Defendants purported wrongdoing and (iii) reimbursement of costs and expenses.

On February 20, 2015, the Court in Gross v. GFI Group, Inc. granted Plaintiff’s unopposed motion for appointment as lead plaintiff and approved his selection of co-lead counsel on behalf of the putative class. The Court also extended Defendants’ time to respond to the complaint from February 23, 2015 to March 25, 2015; granted Plaintiff leave to file an amended complaint by March 16, 2015; and rescheduled the initial pre-trial conference to March 27, 2015.  On March 10, 2015, Plaintiff requested additional time to file his amended complaint.  On March 13, 2015, the Court extended Plaintiff’s deadline to file an amended complaint from March 16, 2015 to May 15, 2015; set a June 5, 2015 deadline for Defendants to respond to the amended complaint; and rescheduled the initial pre-trial conference for June 19, 2015.

Defendants believe that the claims asserted against them are without merit and intend to defend the litigation vigorously.

Based on currently available information, the outcome of the Company’s outstanding legal proceedings are not expected to have a material adverse impact on the Company’s financial position. However, the outcome of any such matters may be material to the Company’s results of operations or cash flows in a given period. It is not presently possible to determine the Company’s ultimate exposure to these matters and there is no assurance that the resolution of the Company’s outstanding matters will not significantly exceed any reserves accrued by the Company.

For a limited number of legal matters for which, a loss (whether in excess of a related accrued liability or where there is no accrued liability) is not probable but is reasonably possible in future periods, the Company is sometimes able to estimate a range of possible loss.  In determining whether it is able to estimate a range of possible loss, the Company reviews and evaluates its material litigation and regulatory and other matters on an ongoing basis.  In cases in which the Company is able to estimate a range of possible loss, the aggregate total of such estimated possible losses is disclosed below.  There may be other matters for which a loss is probable or reasonably possible but for which a range of possible loss may not be estimable.  For those matters for which a range of possible loss is estimable, management currently estimates the aggregate range of possible loss as $0 to approximately $10.0 million in excess of the accrued liability (if any) related to those matters.  The estimated range of possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions and uncertainties.  The matters underlying the estimated range will vary from time to time, and actual results may vary significantly from the current estimate.  Management is generally unable to estimate a range of reasonably possible loss for matters other than those included in the estimate above, including where (i) actual or potential plaintiffs have not claimed an amount of monetary damages (unless management can otherwise determine an amount), (ii) the matters are in early stages, (iii) there is uncertainty as to the outcome of pending appeals or motions, (iv) there are significant factual issues to be resolved, (v) there are novel legal issues presented, among other reasons.  Those matters for which an estimate is not possible are excluded from the estimated range above, therefore, the estimated range above does not represent the Company’s maximum loss exposure.

Risks and Uncertainties— The Company primarily generates its revenues by executing and facilitating transactions for counterparties. Revenues for these services are transaction based. As a result, the Company’s revenues will likely vary based upon the trading volumes of the various securities, commodities, foreign exchange and other cash and derivative markets in which the Company provides its services.

Guarantees— The Company, through its subsidiaries, is a member of certain exchanges and clearing houses. Under the membership agreements, members are generally required to guarantee certain obligations. To mitigate the performance risks of its members, the exchanges and clearing houses may, from time to time, require members to post collateral, as well as meet certain minimum financial standards. The Company’s maximum potential liability under these arrangements cannot be quantified. However, management believes that the potential for the Company to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Condensed Consolidated Statements of Financial Condition for these arrangements.