The Company calculates its basic and diluted earnings per share in accordance with FASB accounting standards. Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. As of June 30, 2011, there were 116,246,786 shares outstanding, of which 1,110,836 are restricted. To the extent that outstanding restricted shares are unvested, they are excluded from the calculation of basic earnings per share. The Company has included 24,574 fully vested, unissued restricted stock units in its calculation of basic earnings per share.

Diluted earnings per common share are calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive nonvested restricted stock and stock options. The Company uses the treasury stock method to reflect the potential dilutive effect of the unvested restricted shares, restricted stock units and unexercised stock options. In calculating the number of dilutive shares outstanding, the shares of common stock underlying unvested restricted shares and restricted stock units are assumed to have been delivered, and options are assumed to have been exercised, on the grant date. The assumed proceeds from the assumed vesting, delivery and exercising were calculated as the sum of (a) the amount of compensation cost attributed to future services and not yet recognized and (b) the amount of tax benefit that was credited to additional paid-in capital assuming vesting and delivery of the restricted stock. The tax benefit is the amount resulting from a tax deduction for compensation in excess of compensation expense recognized for financial statement reporting purposes. All outstanding stock options were not included in the computation of diluted net loss per common share for the three months and six months ended June 30, 2011, as their inclusion would have been anti-dilutive.

		Three Months Ended June 30,					Six Months Ended June 30,

		2011		2010			2011		2010
		(in thousands)					(in thousands)
Net income (loss) attributable to Cowen Group, Inc. shareholders		$	20,037	$	(21,197	)	$	20,119	$	(34,173	)

Shares for basic and diluted calculations:
	Average shares used in basic computation		76,330		72,693			75,600		72,601
	Stock options		—		—			—		—
	Restricted shares		1,568		—			1,289		—

	Average shares used in diluted computation		77,898		72,693			76,889		72,601

Earnings (loss) per share:
	Basic	$	0.26	$	(0.29	)	$	0.27	$	(0.47	)
	Diluted	$	0.26	$	(0.29	)	$	0.26	$	(0.47	)

Treasury stock of $1.9 million as of June 30, 2011 resulted from the acquisition (see Note 2) of LaBranche as the Company held shares directly in LaBranche prior to the acquisition date and those shares were converted to Treasury stock at the acquisition date.