What changed in this filing

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Item 1A. Risk Factors

2022-02-28 compared with 2021-03-01 · 36 added, 37 removed, 382 unchanged (16% of the section changed)

16 unchanged sentences

During periods of unfavorable market or economic conditions, the level of individual investor participation in the global markets, as well as the level of client assets, may also decrease, which would negatively impact the results of our Private Client and Asset Management business segments.

Substantial market fluctuations could also cause variations in the value of our investments in our funds, the flow of investment capital into or from Asset Under Management ("AUM"), and the way customers allocate capital among money market, equity, fixed income or other investment alternatives, which could negatively impact our Private Client and Asset Management business segments.

Substantial market fluctuations could also cause variations in the value of our investments in our funds, the flow of investment capital into or from Assets Under Management ("AUM"), and the way customers allocate capital among money market, equity, fixed income or other investment alternatives, which could negatively impact our Private Client and Asset Management business segments.

The value of our financial instruments may be materially affected by market fluctuations.

45 unchanged sentences

The Company cannot assure that its operations will generate funds sufficient to repay its existing debt obligations as they come due.

The Company's failure to repay its indebtedness and make interest payments as required by its debt obligations could have a material adverse effect on its results of operations and financial condition, including the acceleration of the payment of debt.

The Company's failure to repay its indebtedness and make interest payments as required by our debt obligations could have a material adverse effect on our results of operations and financial condition, including the acceleration of the payment of debt.

Financial markets are susceptible to severe events such as dislocations which may lead to reduced liquidity.

7 unchanged sentences

The trend toward direct access to automated, electronic markets and the move to more automated trading platforms has resulted in the use of increasingly complex technology that relies on the continued effectiveness of the programming code and integrity of the data to process the trades.

We rely on the ability of our employees, consultants, and our internal systems to operate our different businesses and process a high volume of transactions.

We rely on the ability of our employees, consultants, and internal systems to operate our different businesses and process a high volume of transactions.

Additionally, we are subject to complex and evolving laws and regulations governing cybersecurity, privacy and data protection, which may differ and potentially conflict, in various jurisdictions.

14 unchanged sentences

hurricanes and wildfires);

electrical outage;

environmental hazard;

electrical outages;

environmental hazards;

computer servers;

49 unchanged sentences

The federally mandated Consolidated Audit Trail ("CAT") program which requires that client personally identifiable information be submitted to a database not controlled by us may expose us to liability for breaches of that data base not under our control.

See “Business -- REGULATION – Consolidated Audit Trail” in Part I, Item 1.

As a result of the foregoing, the Company has and is likely to incur significant costs in preparing its infrastructure and maintaining it to resist any such attacks.

In addition to personnel dedicated to overseeing the infrastructure and systems to defend against cybersecurity incidents, senior management is regularly briefed on issues, preparedness and any incidents requiring response.

At its regularly scheduled meetings, the Audit Committee of the Board of Directors and the Board of Directors are briefed and brought up to date on cybersecurity.

At their regularly scheduled meetings, the Audit Committee of the Board of Directors and the Board of Directors are briefed and brought up to date on cybersecurity.

The Company continually encounters technological change

16 unchanged sentences

New regulations or guidance relating to climate change, as well as the perspectives of shareholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products.

Environmental, Social and Governance (ESG) Risks

Increasingly our society and our business are faced with challenges associated with the implementation of policies and practices that are supportive of concerns related to environmental, social and governance (ESG) issues.

We continue to explore implementing ESG considerations across our business practices and operations, a task complicated by the lack of consensus around a defining standard of ESG.

We continue to focus on improving the resilience of our operations, fostering an inclusive workforce and maintaining a system of good corporate governance.

However, our efforts in this regard may be insufficient and may expose the Company to reputational risk from entities purporting to "grade" ESG platforms, reductions in business with certain clients demanding greater ESG efforts or to regulatory expectation and enforcement if such practices become the subject of rule-making by regulators to whom we are subject.

LEGAL, REGULATORY AND COMPLIANCE RISKS

18 unchanged sentences

We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and SROs.

Each of the regulatory bodies with jurisdiction over us has regulatory powers dealing with many different aspects of financial services, including, but not limited to, the authority to fine us and to grant, cancel, restrict or otherwise impose conditions on the right to continue operating particular businesses.

For example, the failure to comply with the obligations imposed by the Exchange Act on broker-dealers and the Advisers Act on investment advisers, including recordkeeping, registration, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, or by the Investment Company Act of 1940 (the "1940 Act"), could result in investigations, sanctions and reputational damage.

Increasingly, regulators have instituted a practice of regulation by enforcement" where new interpretation of existing regulations are introduced by bringing enforcement actions against securities firms for activities that occurred in the past but were not then thought to be problematic.

operating particular businesses.

For example, the failure to comply with the obligations imposed by the Exchange Act on broker-dealers and the Advisers Act on investment advisers, including recordkeeping, registration, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, or by the Investment Company Act of 1940, as amended (the "1940 Act"), could result in investigations, sanctions and reputational damage.

Increasingly, regulators have instituted a practice of "regulation by enforcement" where new interpretations of existing regulations are introduced by bringing enforcement actions against securities firms for activities that occurred in the past but were not then thought to be problematic.

We also may be adversely affected as a result of new or revised legislation or regulations imposed by the SEC, other U.S.

2 unchanged sentences

Numerous regulatory changes, and enhanced regulatory and enforcement activity, relating to the asset management business may increase our compliance and legal costs and otherwise adversely affect our business.

The SEC has proposed certain measures that would establish a new framework to replace the requirements of Rule 12b-1 under the 1940 Act with respect to how mutual funds pay fees to cover the costs of selling and marketing their shares.

The staff of the SEC's Office of Compliance, Inspections and Examinations has indicated that it is reviewing the use of fund assets to pay for fees to sub-transfer agents and sub-administrators for services that may be deemed to be distribution-related.

As these measures are neither final nor undergoing implementation throughout the financial services industry, their impact cannot be fully ascertained at this time.

As this regulatory trend continues, it could adversely affect our operations and, in turn, our financial results.

and foreign governments have taken regulatory actions impacting the investment management industry, and may continue to take further actions, including expanding current (or enacting new) standards, requirements and rules that may be applicable to us and our subsidiaries, particularly those subsidiaries that are SEC registered investment advisers.

26 unchanged sentences

In the normal course of business, the operating subsidiaries have been and continue to be the subject of numerous civil actions and arbitrations arising out of customer complaints relating to our activities as a broker-dealer and investment adviser, as an employer and as a result of other business activities.

If the Company misjudged the amount of damages that may be assessed against it from pending or threatened claims, or if the Company is unable to adequately estimate the amount of damages that will be assessed against it from claims that arise in the future and reserve accordingly, its financial condition and results of operations may be materially adversely affected.

If the Company misjudged the amount of damages that may be assessed against it from pending or threatened claims, or if the Company is unable to adequately estimate the amount of damages that

will be assessed against it from claims that arise in the future and reserve accordingly, its financial condition and results of operations may be materially adversely affected.

RISK MANAGEMENT

41 unchanged sentences

However, no assurance can be given that the steps being taken will be deemed to be adequate or appropriate, nor can we predict the level of disruption which will occur to our employees’ ability to provide customer support and service.

The ongoing COVID-19 pandemic has resulted in meaningfully lower stock prices for many companies, and may negatively affect the trading prices for our own securities.

The ongoing COVID-19 pandemic has impacted stock prices for many companies, and may negatively affect the trading prices for our own securities.

The further spread of the COVID-19 outbreak may materially disrupt banking and other financial activity generally and in the areas in which we operate.

1 unchanged sentence

Any one or more of these developments could have a material adverse effect on our business, operations, consolidated financial condition, and consolidated results of operations.

The introduction of new vaccines to treat COVID-19 offer the likelihood of the end of the pandemic sometime during 2021.

The ability to eliminate the virus will depend upon the availability of the vaccines to the general population in sufficient quantities and for the political will to overcome the logistical issues in delivering and inoculating the populations so as to reach “herd immunity” at an early date in the foreseeable future.

The introduction of new vaccines to treat COVID-19 offer the likelihood of the retreat of the pandemic sometime during 2022.

The ability to reduce the impact of the virus will depend upon the availability of the vaccines to the general population in sufficient quantities and for the political will to overcome the logistical issues in delivering and inoculating the populations as well as the willingness of those potentially impacted to utilize any such vaccines so as to reach “herd immunity”.

Adverse changes in general political conditions and social unrest could adversely affect business and our operating results should recent demonstrations and issues of uncontrolled violence become more manifest.

There is no way to predict the impact that political activity, the pandemic and the influence of social media have had on these societal issues.

There is no way to predict the impact that political activity, the pandemic and the influence of social media may have on these societal issues.

Developments in market and economic conditions have adversely affected, and may in the future adversely affect, the Company's business and profitability.

22 unchanged sentences

The number of engagements the Company has at any given time is subject to change and may not necessarily result in future revenues.

Assignments related to special purpose acquisition companies ("SPACs") grew our investment banking pipeline and fees in the third and fourth quarter of 2020 and has continued into the first quarter of 2021.

Assignments related to special purpose acquisition companies ("SPACs") grew our investment banking pipeline and fees in the third and fourth quarter of 2021 and have continued into the first quarter of 2022.

We cannot assure that the high level of transactions for SPACs and corresponding high fees will continue indefinitely.

19 unchanged sentences

These arrangements have increased the competitive pressures on sales commissions and have affected the value the Company's clients place on high-quality research.

Moreover, the Company's inability to reach agreement regarding the terms of unbundling arrangements with institutional clients who are actively seeking such arrangements could result in the loss of those clients, which would likely reduce the level of institutional commissions.

Moreover, the Company's inability to reach agreement regarding the terms of unbundling

arrangements with institutional clients who are actively seeking such arrangements could result in the loss of those clients, which would likely reduce the level of institutional commissions.

The Company believes that price competition and pricing pressures in these and other areas will continue as institutional investors continue to reduce the amounts they are willing to pay, including reducing the number of brokerage firms they use, and some of our competitors seek to obtain market share by reducing fees, commissions or margins.

The recent announcement by several large securities firms that they will not charge any fee to retail investors to execute equity transactions will only add to this pressure, especially the firms likes ours that cater to retail investors as well.

The recent announcement by several large securities firms as well as a similar “no commission” offering by retail firms utilizing the internet and electronic trading has proven popular among retail clients both new to securities markets as well as some experienced investors and will only add to this pricing pressure, especially on the firms likes ours that cater to retail investors.

Additional pressure on sales and trading revenue may impair the profitability of the Company's business.

15 unchanged sentences

If the Company is unable to manage these risks relating to its foreign operations effectively, its reputation and results of operations could be harmed.

England’s recent exit from the EU could impact our overseas operations.

The United Kingdom’s recent exit from the EU could impact our overseas operations.

In June 2016, the UK held a referendum in which voters approved an exit from the EU, commonly referred to as “Brexit,” and

the UK exited the EU in January 2020.

The withdrawal could, among other outcomes, disrupt the free movement of goods,

services and people between the UK and the EU, undermine bilateral cooperation in key policy areas and significantly disrupt

trade between the UK and the EU.

The UK exited the EU without a continuing agreement covering many aspects of its relationship, at least as that relates to financial services, which could be significantly disruptive to the economies of both parties

and may negatively affect our business.

We may also face new regulatory costs and challenges as a result of Brexit that could

have a negative effect on our operations.

In addition, Brexit could lead to legal uncertainty and potentially divergent national

laws and regulations as the UK determines which EU laws to replace or replicate.

Given the lack of comparable precedent, it is

unclear what financial, regulatory, trade and legal implications the withdrawal of the UK from the EU will have and how such

withdrawal will affect us.

We have operations in other foreign countries and may move elements of our UK operations to a yet to be determined other location within the EU.

In particular, it is possible that the level of economic activity in the UK and the rest of Europe will be adversely impacted and that we will face increased regulatory and legal complexities, including those related to tax, trade, security and employee relations as a result of Brexit.

The withdrawal, among other outcomes, has disrupted the free movement of goods,

services and people between the UK and the EU, undermined bilateral cooperation in key policy areas and significantly disrupted trade between the UK and the EU.

The UK exited the EU without a continuing agreement covering many aspects of its relationship, at least as that relates to financial services, which has been disruptive to the economies of both parties and has negatively affected our business conducted in the EU.

We may also face new regulatory costs and challenges as a result of Brexit that could have a negative effect on our operations.

In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replace or replicate.

Given the lack of comparable precedent, it is unclear what financial, regulatory, trade and legal implications the withdrawal of the UK from the EU will continue to have and how such withdrawal will continue to affect us.

The Company is reviewing various strategies to be able to continue its relationships with clients within the EU, including becoming domiciled in one or more EU countries and becoming subject to their respective regulations.

It is possible that the level of economic activity in the UK and the rest of Europe will be adversely impacted and that we will face increased regulatory and legal complexities, including those related to tax, trade, security and employee relations as a result of Brexit.

Such changes could be costly and potentially disruptive to our operations and business relationships in affected regions.

55 unchanged sentences

The “#Me Too” movement has also opened up liability for actions that may have occurred many years ago, but have an increased likelihood of present day action.

The Company could also become liable for its actions in enforcing its rules of conduct by former employees who disagree with the Company’s actions.

The Company could also become liable for its actions in enforcing its rules of conduct on former employees who disagree with the Company’s actions.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors