The financial services industry has experienced substantial consolidation over the past ten years. During this consolidation, a number of growth-focused investment banks were acquired by larger commercial banks with broader platforms. It is believed that large investment banks often under-serve clients considered to be small- or mid-capitalization.

In addition, many large investment banks have responded to pricing pressure within their equity brokerage divisions by reducing research coverage, particularly for smaller companies, consolidating sales and trading services, and reducing headcount of more experienced sales and trading professionals in order to transition to a commoditized brokerage model focused increasingly on large market capitalization companies.

The Company has created two research products that highlight its analysts\\\' proprietary information and investment ideas to its clients: The Non-Consensus Idea Series and The Investment Controversies Series. The Non-Consensus Idea Series features stocks where the Company’s analysts\\\' opinions diverge from the prevailing views in the marketplace.

The Company’s team of sales and trading professionals are focused on institutional investor clients in the U.S. and internationally. The Company trades both common and convertible securities on behalf its clients and has relationships with over 1,000 institutional investor clients.

The Company’s trading professionals trade over 2,000 listed stocks and make markets in approximately 1,200 Nasdaq stocks. For Nasdaq listed stocks, the Company continuously makes bids and offers on those stocks in which it makes markets, requiring some capital commitment to support resulting inventories. Similarly, for listed stocks, the Company provides market liquidity for institutional investor clients by buying or selling blocks of shares from those clients without necessarily having identified the other side of the trade at execution. These positions are typically of very short duration, usually intra-day, and are taken in the context of the overall economic relationship the Company has with a specific institutional investor client.

The Company’s investment banking professionals are focused on providing strategic advisory and capital raising services to public and private companies in the healthcare, TMT and consumer sectors.

The Company provides a broad range of advice to its clients in relation to mergers, acquisitions and similar corporate finance matters and are involved at each stage of these transactions, from initial structuring to final execution. When the Company advises companies in the potential acquisition of another company or certain assets, its services may include evaluating potential acquisition targets; providing valuation analyses; evaluating and proposing financial and strategic alternatives; rendering, if appropriate, fairness opinions;

providing advice regarding the timing, structure and pricing of a proposed acquisition; and assisting in negotiating and closing the acquisition.

The Company also manages a portfolio of merchant banking investments on behalf of Société Générale. The assets under management are primarily private investments made by SGC Partners I, LLC, an indirect subsidiary of Société Générale.

Investment banking revenues increased $12.5 million, or 11.0%, to $126.3 million for the year ended December 31, 2005 compared with $113.8 million in the prior year.

Interest and dividend income increased $7.7 million, or 82.5%, to $17.0 million for the year ended December 31, 2005 compared with $9.3 million in 2004.

Floor brokerage and trade execution fees decreased $6.1 million, or 37.9%, to $10.0 million for the year ended December 31, 2005 compared with $16.1 million in 2004.

Marketing and business development expense increased $0.3 million, or 2.4%, to $12.4 million for the year ended December 31, 2005 compared with $12.1 million in 2004.