Restructuring Charges

9 Months Ended

Sep. 30, 2011

Restructuring Charges

Restructuring Charges

(3) Restructuring Charges

2011 Restructuring

In the second quarter of 2011, the Company decided to implement a restructuring plan to improve margins and enhance stockholder returns primarily focused on reducing workforce, consulting and infrastructure costs in the U.S. and Europe. The following table summarizes the pre-tax charges by segment (dollars in thousands).  Employee severance costs relate to the termination of approximately 100 employees and the lease consolidation costs relate to office space that was vacated. These charges are classified as restructuring charges in the Condensed Consolidated Statements of Operations.

	U.S. Operations		Canadian Operations		European Operations		Asia Pacific Operations		Consolidated
Employee separation and related costs	15,444		685		1,235		—		17,364
Consolidation of leased facilities	—		—		—		314		314
Total	$	15,444	$	685	$	1,235	$	314	$	17,678

Most of the accrued costs are expected to be paid in 2011, except payments related to the vacated leased facilities, which will continue until March 2013, certain cash severance payments which will continue until August 2012 and the settlement of restricted share awards which will continue through February 2014.

Activity and liability balances recorded as part of the 2011 restructuring plan through September 30, 2011 are as follows:

	Employee separation and related costs			Consolidation of leased facilities			Total
Balance at June 30, 2011	$	17,364		$	314		$	17,678
Cash payments	(9,812		)	(72		)	(9,884		)
Acceleration of share-based compensation in additional paid-in capital	(2,298		)	—			(2,298		)
Other	(56		)	7			(49		)
Balance at September 30, 2011	$	5,198		$	249		$	5,447

Westchester Office Closing - 2010

In the fourth quarter of 2010, the Company decided to close its Westchester, NY office, relocate the staff, primarily sales traders and support, to its New York City office, and incurred a restructuring charge of $2.3 million.  The restructuring charge consisted of lease abandonment costs ($2.2 million) and employee severance costs ($0.1 million).

The following table summarizes the changes in the Company’s liability balance related to the Westchester office restructuring plan, which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition (dollars in thousands):

	Employee separation and related costs			Consolidation of leased facilities			Total
Balance at December 31, 2010	$	90		$	2,164		$	2,254
Utilized — cash	(86		)	(378		)	(464		)
Balance at September 30, 2011	$	4		$	1,786		$	1,790

The remaining accrued costs related to employee separation are expected to be paid during 2011 while the payments related to the leased facilities will continue through 2016.

Asia Pacific Restructuring - 2010

In the second quarter of 2010, the Company implemented a plan to close its on-shore operations in Japan to lower costs and reduce capital requirements.  The annual expenses for the on-shore Japanese operations were approximately $4 million and the amount of regulatory capital deployed exceeded $20 million. In connection with this move, a one-time charge of $2.3 million was recorded for employee severance, contract termination costs and non-cash write-offs of fixed assets and capitalized software, which was partially offset in the fourth quarter of 2010 by $0.2 million for cumulative translation gains that were reclassified to operations following the substantial liquidation of the Japanese subsidiary.

The following table summarizes the changes in the Company’s liability balance related to the Asia Pacific restructuring plan, which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition (dollars in thousands):

	Contract termination charges
Balance at December 31, 2010	$	11
Utilized — cash	(11		)
Balance at September 30, 2011	$	—

2009 Restructuring

In the fourth quarter of 2009, the Company committed to a restructuring plan (aimed primarily at its U.S. Operations) to reengineer its operating model to focus on a leaner cost structure and a more selective deployment of resources towards those areas of our business that provide a sufficiently profitable return. As a result, a $25.4 million restructuring charge was recorded, which included costs related to employee separation, the consolidation of leased facilities and write-offs of capitalized software and certain intangible assets primarily due to changes in product priorities.  Employee separation and related costs pertain to the termination of 144 employees primarily from the U.S. Operations. The consolidation of leased facilities charges relate to non-cancelable leases which were vacated.

The following table summarizes the changes in the Company’s liability balance related to the 2009 restructuring plan included in accounts payable and accrued expenses in the Consolidated Statements of Financial Condition (dollars in thousands):

	Employee separation and related costs			Consolidation of leased facilities			Total
Balance at December 31, 2010	$	77		$	853		$	930
Utilized — cash	(27		)	(548		)	(575		)
Other	3			—			3
Balance at September 30, 2011	$	53		$	305		$	358

The remaining accrued costs relate to payments related to the leased facilities and the settlement of restricted share awards which will continue through April 2012.