For the fiscal year ended: | December 31, 2015 | Commission file number: 001-34516 |
Delaware (State or other jurisdiction of incorporation or organization) | 27-0423711 (I.R.S. Employer Identification No.) |
Title of Each Class | Name of Exchange on Which Registered | |
Class A Common Stock, par value $0.01 per share | The Nasdaq Global Market | |
8.25% Senior Notes due 2021 | The Nasdaq Global Market |
Large accelerated filer o | Accelerated filer Q | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
(c) | Refer to Exhibit 99.1 to this Amendment No 1. to the Annual Report on Form 10-K/A for the separate audited financial statements and related disclosures of Starboard Value A LP pursuant to Rule 3-09 of Regulation S-X. |
COWEN GROUP, INC. | |||||||
By: | /s/ PETER A. COHEN | ||||||
Name: | Peter A. Cohen | ||||||
Date: | March 23, 2016 | Title: | Chairman of the Board and Chief Executive Officer |
Signature | Title | Date | ||
/s/ PETER A. COHEN | Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | |||
Peter A. Cohen | March 23, 2016 | |||
/s/ STEPHEN A. LASOTA | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |||
Stephen A. Lasota | March 23, 2016 | |||
/s/ KATHERINE E. DIETZE | ||||
Katherine E. Dietze | Director | March 23, 2016 | ||
/s/ STEVEN KOTLER | ||||
Steven Kotler | Director | March 23, 2016 | ||
/s/ JEROME S. MARKOWITZ | ||||
Jerome S. Markowitz | Director | March 23, 2016 | ||
/s/ JACK H. NUSBAUM | ||||
Jack H. Nusbaum | Director | March 23, 2016 | ||
/s/ JEFFREY M. SOLOMON | ||||
Jeffrey M. Solomon | Director and President | March 23, 2016 | ||
/s/ JOSEPH R. WRIGHT | ||||
Joseph R. Wright | Director | March 23, 2016 |
Exhibit No. | Description | |||
23.1 | Consent of Independent Registered Public Accounting Firm (filed herewith). | |||
31.1 | Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith). | |||
31.2 | Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith). | |||
32 | Certification of CEO and CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (furnished herewith). | |||
99.1 | Starboard Value A LP Audited Financial Statements (filed herewith). |
1. | I have reviewed this Annual Report on Form 10-K/A of Cowen 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 (the registrant's fourth fiscal quarter in the case of an annual report) 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: | March 23, 2016 | /s/ PETER A. COHEN | ||
Name: Peter A. Cohen Title: Chief Executive Officer (principal executive officer) |
1. | I have reviewed this Annual Report on Form 10-K/A of Cowen 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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
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: | March 23, 2016 | /s/ STEPHEN A. LASOTA | ||
Name: Stephen A. Lasota Title: Chief Financial Officer (principal financial officer and principal accounting officer) |
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: | March 23, 2016 | /s/ PETER A. COHEN | ||
Name: Peter A. Cohen Title: Chief Executive Officer (principal executive officer) | ||||
/s/ STEPHEN A. LASOTA | ||||
Name: Stephen A. Lasota Title: Chief Financial Officer (principal financial officer and principal accounting officer) |
Page(s) | |
Independent Auditor’s Report | 2 |
Financial Statements | |
Statements of Assets, Liabilities and Partners’ Capital | 3 |
Statements of Income | 4 |
Statements of Changes in Partners’ Capital | 5 |
Statements of Cash Flows | 6 |
Notes to Financial Statements | 7-10 |
December 31, | ||||||||
2015 | 2014 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 213 | $ | 196 | ||||
Investments in Portfolio Funds, at fair value | 2,995 | 3,538 | ||||||
Realized performance fees receivable | 1,352 | 53,026 | ||||||
Accrued unrealized performance fees | 15,487 | 40,584 | ||||||
Redemptions receivable | 430 | — | ||||||
Total Assets | 20,477 | 97,344 | ||||||
Commitments and contingencies (Note 5) | ||||||||
Partners’ capital | 20,477 | 97,344 | ||||||
Total liabilities and partners’ capital | $ | 20,477 | $ | 97,344 |
Year ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Revenues | ||||||||||||
Performance fees | $ | (19,246 | ) | $ | 90,905 | $ | 23,098 | |||||
Total revenues | (19,246 | ) | 90,905 | 23,098 | ||||||||
Other income (loss) | ||||||||||||
Net gains (losses) on Portfolio Funds | (221 | ) | 734 | 283 | ||||||||
Net income (loss) | $ | (19,467 | ) | $ | 91,639 | $ | 23,381 |
General Partner | Limited Partners | Total | |||||||||
Balance at December 31, 2012 | $ | 204 | $ | 21,624 | $ | 21,828 | |||||
Contributions | 5 | 533 | 538 | ||||||||
Net Income (loss) | 219 | 23,162 | 23,381 | ||||||||
Distributions | (170 | ) | (18,148 | ) | (18,318 | ) | |||||
Balance at December 31, 2013 | 258 | 27,171 | 27,429 | ||||||||
Contributions | 5 | 597 | 602 | ||||||||
Net Income (loss) | 853 | 90,786 | 91,639 | ||||||||
Distributions | (208 | ) | (22,118 | ) | (22,326 | ) | |||||
Balance at December 31, 2014 | 908 | 96,436 | 97,344 | ||||||||
Contributions | 1 | 108 | 109 | ||||||||
Net Income (loss) | (181 | ) | (19,286 | ) | (19,467 | ) | |||||
Distributions | (535 | ) | (56,974 | ) | (57,509 | ) | |||||
Balance at December 31, 2015 | $ | 193 | $ | 20,284 | $ | 20,477 |
For the year ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net income (loss) | $ | (19,467 | ) | $ | 91,639 | $ | 23,381 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||||||||
Net (gains) losses on Portfolio Funds | 221 | (734 | ) | (283 | ) | |||||||
(Increase)/decrease in operating assets and liabilities: | ||||||||||||
Realized performance fees receivable | 51,674 | (34,440 | ) | (267 | ) | |||||||
Accrued unrealized performance fees | 25,098 | (33,957 | ) | (4,499 | ) | |||||||
Net cash provided by operating activities | 57,526 | 22,508 | 18,332 | |||||||||
Cash flows from investing activities | ||||||||||||
Purchase of investments in Portfolio Funds | (109 | ) | (602 | ) | (538 | ) | ||||||
Net cash used in investing activities | (109 | ) | (602 | ) | (538 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Capital contributions | 109 | 602 | 538 | |||||||||
Capital distributions | (57,509 | ) | (22,326 | ) | (18,318 | ) | ||||||
Net cash used in financing activities | (57,400 | ) | (21,724 | ) | (17,780 | ) | ||||||
Net change in cash and cash equivalents | 17 | 182 | 14 | |||||||||
Cash and cash equivalents at beginning of year | 196 | 14 | — | |||||||||
Cash and cash equivalents at end of year | $ | 213 | $ | 196 | $ | 14 | ||||||
Supplemental non-cash information | ||||||||||||
Redemption receivable for sale of investment in Portfolio Fund | $ | 430 | $ | — | $ | — |
Level 1 | Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Partnership has the ability to access at the measurement date; |
Level 2 | Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; |
Level 3 | Fair value is determined based on pricing inputs that are unobservable and includes situations where there is little, if any, market activity for the asset or liability. The determination of fair value for assets and liabilities in this category requires significant management judgment or estimation. |
Fair Value as of December 31, | ||||||||||||
Investments | Strategy | 2015 | 2014 | Redemption Frequency and Commitments | ||||||||
(dollars in thousands) | ||||||||||||
Starboard Value and Opportunity Fund LP | Activist | $ | 435 | $ | 464 | (a) (b) | ||||||
Starboard Intermediate Fund, L.P. | Activist | 433 | 462 | (a) (b) | ||||||||
Starboard Intermediate Fund II, L.P. | Activist | 865 | 924 | (a) (b) | ||||||||
Starboard Leaders Fund | Activist | 277 | 351 | (c) (b) | ||||||||
Starboard Partners Fund | Activist | 33 | 33 | (a) (b) | ||||||||
Other | Activist | 952 | 1,304 | (a) (b) | ||||||||
$ | 2,995 | $ | 3,538 |