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Our results of operations may be materially affected by market fluctuations and by global and economic conditions and other factors, including changes in asset values.
−Removed: Our results of operations have been in the past and may, in the future, be materially affected by market fluctuations due to global financial markets, economic conditions, changes to global trade policies and tariffs and other factors, including the level and volatility of equity, fixed income and commodity prices, the level and term structure of interest rates, inflation and currency values, and the level of other market indices.
+Added: Our results of operations have been, in the past, and may, in the future, be materially affected by market fluctuations due to global financial markets, economic conditions, changes to global trade policies, tax legislation and tariffs and other factors, including the level and volatility of equity, fixed income and commodity prices, the level and term structure of interest rates, inflation and currency values, and the level of other market indices.
The results of our Capital Markets business segment, particularly results relating to our involvement in primary and secondary markets for all types of financial products, are subject to substantial market fluctuations due to a variety of factors that we cannot control or predict with great certainty.
1 unchanged sentence
Fluctuations also occur due to the level of global market activity, which, among other things, affects the size, number and timing of investment banking client assignments and transactions and the realization of returns from our principal investments.
−Removed: The Company may incur losses and be subject to reputational harm to the extent that, for any reason, it is unable to sell securities it purchased as an underwriter at anticipated price levels.
+Added: The Company may incur losses and be subject to reputational harm to the extent that, for any reason, it is unable to sell at anticipated price levels securities it purchased as an underwriter.
As an underwriter, the Company is subject to heightened standards regarding liability for material misstatements or omissions in prospectuses and other offering documents relating to offerings it underwrites.
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Changes in interest rates (especially if such changes are rapid), sustained low or high interest rates or uncertainty regarding the future direction of interest rates, may create a less favorable environment for certain of the Company's businesses, particularly its fixed income business, resulting in reduced business volume and reduced revenue.
−Removed: The reduction of interest rates substantially reduced the interest profits available to the Company through its margin lending and also reduced profit contributions from cash sweep products such as the FDIC-insured Bank Deposit program.
−Removed: If interest rates remain at low levels, the Company's profitability will be negatively impacted.
+Added: Prior to the Federal Reserve increasing the federal funds rate by 425 basis points during 2022, the historical low interest rate environment substantially reduced the interest profits available to the Company through its margin lending and also reduced profit contributions from cash sweep products such as the FDIC-insured Bank Deposit program.
+Added: If interest rates decrease from current levels and/or balances within our cash sweep products decrease, the Company's profitability will be negatively impacted.
Credit risk may expose the Company to losses caused by the inability of borrowers or other third parties to satisfy their obligations.
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This is sometimes referred to as "systemic risk" and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges with which the Company interacts on a daily basis, and therefore could adversely affect the Company.
+Added: The development and use of digital currencies may create additional credit risks.
+Added: Recent failures of enterprises central to the functioning of that market have created uncertainty as to the impact of this market on currency markets and the general economy.
Liquidity Risk
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Our liquidity could be negatively affected by our inability to raise funding in the long-term or short-term debt capital markets, our inability to access the secured lending markets, or unanticipated outflows of cash or collateral by customers or clients.
−Removed: Factors that we cannot control, such as disruption of the financial markets or negative views about the financial services industry generally, including concerns regarding fiscal matters in the U.S.
+Added: Factors that we cannot control, such as disruption of the financial markets or negative views about the financial services
+Added: industry generally, including concerns regarding fiscal matters in the U.S.
and other geographic areas, could impair our ability to raise funding.
In addition, our ability to raise funding could be impaired if investors or lenders develop a negative perception of our long-term or short-term financial prospects due to factors such as an incurrence of large trading losses, a downgrade by
−Removed: the rating agencies, a decline in the level of our business activity, if regulatory authorities take significant action against us or our industry, or we discover significant employee misconduct or illegal activity.
−Removed: If we are unable to raise funding using the
−Removed: methods described above, we would likely need to finance or liquidate unencumbered assets, such as our investment portfolios or trading assets, to meet maturing liabilities or other obligations.
+Added: the rating agencies, or a decline in the level of our business activity, if regulatory authorities take significant action against us or our industry, or we discover significant employee misconduct or illegal activity.
+Added: If we are unable to raise funding using the methods described above, we would likely need to finance or liquidate unencumbered assets, such as our investment portfolios or trading assets, to meet maturing liabilities or other obligations.
We may be unable to sell some of our assets or we may have to sell assets at a discount to market value, either of which could adversely affect our results of operations, cash flows and financial condition.
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The rating agencies continue to monitor certain company-specific and industry-wide factors that are important to the determination of our credit ratings.
−Removed: These include governance, the level and quality of earnings, capital adequacy, liquidity and funding, risk appetite and management, asset quality, strategic direction, business mix, regulatory or legislative changes, macroeconomic environment, and perceived levels of support, and it is possible that they could downgrade our ratings and those of similar institutions.
+Added: These include governance, the level and quality of earnings, capital adequacy, liquidity and funding, risk appetite and management, asset quality, strategic direction, business mix, regulatory or legislative changes, macroeconomic environment, and perceived levels of support.
+Added: It is possible that the rating agencies could downgrade our ratings and those of similar institutions.
Our long-term borrowing costs will continue to remain high given the Company's current rating levels.
Any future downgrades would increase these borrowing costs and may impact our ability to access the debt capital markets in future periods.
−Removed: If the Company is unable to repay its outstanding indebtedness when due, its operations may be materially adversely effected.
+Added: If the Company is unable to repay its outstanding indebtedness when due, its operations may be materially adversely affected.
The Company cannot assure that its operations will generate funds sufficient to repay its existing debt obligations as they come due.
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As a participant in the global capital markets, we face the risk of incorrect valuation or risk management of our trading positions due to flaws in data, models, electronic trading systems or processes or due to fraud or cyber-attack.
+Added: The adoption of shortened settlement cycles in the execution and settlement of securities transactions places increased burdens on participants including the adoption of new processes and procedures to facilitate such settlement.
+Added: A failure to successfully adopt such procedures and technology within the mandated adoption period could negatively impact our business, our clients and our reputation.
We also face the risk of operational failure or disruption of any of the clearing agents, exchanges, clearing houses or other financial intermediaries we use to facilitate our lending and securities transactions.
In the event of a breakdown or improper operation of our or a direct or indirect third party’s systems (or third parties thereof) or processes or improper or unauthorized action by third parties, including consultants and subcontractors or our employees, we could suffer financial loss, an impairment to our liquidity position, a disruption of our businesses, regulatory sanctions or damage to our reputation.
−Removed: In addition, the interconnectivity of multiple financial institutions with central agents, exchanges and clearing houses, and the increased importance of these entities, increases the risk that an operational failure at one institution or entity may cause an industry-wide operational failure that could materially impact our ability to conduct business.
+Added: In addition, the
+Added: interconnectivity of multiple financial institutions with central agents, exchanges and clearing houses, and the increased importance of these entities, increases the risk that an operational failure at one institution or entity may cause an industry-wide operational failure that could materially impact our ability to conduct business.
Furthermore, the concentration of Company and personal information held by a handful of third parties increases the risk that a breach at a key third party may cause an industry-wide data breach that could significantly increase the cost and risk of conducting business.
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Failure of our technology systems, which could result from events beyond our control, or an inability to effectively upgrade those systems or implement new technology-driven products or services, could result in financial losses, liability to clients, and violations of applicable privacy and other applicable laws and regulatory sanctions.
−Removed: Cybersecurity - Security breaches of our technology systems, or those of our clients or other third-party vendors we rely on, could subject us to significant liability and harm our reputation.
+Added: Cybersecurity - Security breaches of our technology systems, or those of our clients or other third-party vendors we rely on, may expose us to significant liability and harm our reputation.
The expectations of sound operational and informational security practices have risen among our clients and vendors, the public at large and regulators.
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Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks.
−Removed: Although cybersecurity incidents among financial services firms are on the rise, we have not experienced any material losses relating to cyber-attacks or other information security breaches.
+Added: Although cybersecurity incidents among financial
+Added: services firms are on the rise, we have not experienced any material losses relating to cyber-attacks or other information security breaches.
However, there can be no assurance that we will not suffer such losses in the future.
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Any of these events may increase our costs, including our costs to insure against these events.
+Added: Additionally, climate change may pose longer-terms risks that could impact the broader economy, necessitating our re-assessment of asset values, reliability of cash flows and business continuity.
Climate change may also have a negative impact on the financial condition of our clients, which may decrease revenues from those clients and increase the credit exposures to those clients.
Additionally, our reputation and client relationships may be damaged as a result of our involvement, or our clients’ involvement, in certain industries associated with causing or exacerbating, or alleged to cause or exacerbate, climate change.
+Added: Reporting requirements in connection with climate change may place an increased burden on our business including adopting processes and procedures at increased cost to meet the data reporting measures that may be required.
We also may be negatively impacted by any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change.
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.
−Removed: Environmental, Social and Governance (ESG) Risks
+Added: Environmental, Social and Governance (ESG) Risks - We are subject to risks relating to environmental, social, and governance (“ESG”) matters that could adversely affect our reputation, business, financial condition, and results of operations, as well as the price of our common stock.
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.
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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.
−Removed: LEGAL, REGULATORY AND COMPLIANCE RISKS
+Added: We are subject to risks, including reputational risk, associated with ESG issues.
+Added: The public holds diverse and often conflicting views on ESG topics.
+Added: As a financial institution, we have multiple stakeholders, including our shareholders, clients, associates, federal and state regulatory authorities, as well as the communities in which we operate, and these stakeholders will often have differing priorities and expectations regarding ESG issues.
+Added: If we take action in conflict with one or another of those stakeholders’ expectations, we could experience an increase in client complaints, a loss of business, or reputational harm.
+Added: We could also face negative publicity or reputational harm based on the identity of those with whom we choose to do business.
+Added: Any adverse publicity in connection with ESG issues could damage our reputation, and negatively impact our ability to attract and retain clients and associates, compete effectively, and grow our business.
+Added: In addition, proxy advisory firms and certain institutional investors who manage investments in public companies are increasingly integrating ESG factors into their investment analysis.
+Added: The consideration of ESG factors in making investment and voting decisions is relatively new.
+Added: Accordingly, the frameworks and methods for assessing ESG policies are not fully developed, vary considerably among the investment community, and will likely continue to evolve over time.
+Added: Moreover, the subjective nature of methods used by various stakeholders to assess a company with respect to ESG criteria could result in erroneous perceptions or a misrepresentation of our actual ESG policies and practices.
+Added: Organizations that provide ratings information to investors on ESG matters may also assign unfavorable ratings to us.
+Added: Certain of our clients might also require that we implement additional ESG procedures or standards in order to continue to do business with them.
+Added: If we fail to comply with specific ESG-related investor or client expectations and standards, or to provide the disclosure relating to ESG issues that any third parties may believe is necessary or appropriate (regardless of whether there is a legal requirement to do so), our reputation, business, financial condition, and/or results of operations, as well as the price of our common stock could be negatively impacted.
+Added: Moreover, there has been increased regulatory focus on ESG-related practices of investment managers.
+Added: A growing interest on the part of investors and regulators in ESG factors, and increased demand for, and scrutiny of, ESG-related disclosures by asset managers has likewise increased the risk that we could be perceived as, or accused of, making inaccurate or misleading statements regarding the investment strategies offered to our clients or of our ESG efforts or initiatives, commonly referred to
+Added: as “greenwashing.” Such perceptions or accusations could damage our reputation, result in litigation or regulatory enforcement actions, and adversely affect our business.
+Added: REGULATORY AND COMPLIANCE RISKS
The Company is subject to extensive securities regulation and the failure to comply with these regulations could subject it to monetary penalties or sanctions.
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We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and SROs.
−Removed: 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
−Removed: operating particular businesses.
+Added: 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, as amended (the "1940 Act"), could result in investigations, sanctions and reputational damage.
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and may be limited or modified in the future The use of various mutual fund share classes has come under significant regulatory scrutiny.
−Removed: The SEC recently completed its Mutual Fund Share Class Disclosure Initiative pursuant to which the SEC found that firm's investment management disclosure relating to 12b-1 fees was deficient resulting in restitution of fees to investment management clients.
+Added: The SEC found in conjunction with its Mutual Fund Share Class Disclosure Initiative that the firm's investment management disclosure relating to 12b-1 fees was deficient resulting in restitution of fees to investment management clients.
Furthermore, new regulations regarding the management of hedge funds and the use of certain investment products may impact our investment management business and result in increased costs.
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The effective compliance date for Reg BI was June 30, 2020.
−Removed: It is too early to predict what effects Reg BI and associated rules will have on the Company.
−Removed: However, there is a need for enhanced documentation for recommendations of securities transactions to broker-dealer retail clients as well as the cessation of certain practices and limitations on certain kinds of transactions previously conducted in the normal course of business.
The new rules and processes related thereto will likely limit revenue and most likely involve increased costs, including, but not limited to, compliance costs associated with new or enhanced technology as well as increased litigation costs.
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Each of these factors increases the likelihood that an underwriter may be required to contribute to an adverse judgment or settlement of a securities lawsuit.
+Added: The Company is exposed to litigation and arbitration risks, which may adversely affect our reputation, financial position and results of operations.
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.
−Removed: 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
−Removed: 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.
+Added: The risks associated with litigation, claims and assessments are oftentimes difficult to quantify.
+Added: 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
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The Company seeks to monitor and control its risk exposure through a variety of separate but complementary financial, credit, operational, compliance and legal reporting systems.
−Removed: The Company believes that it effectively evaluates and manages the market, credit and other risks to which it is exposed.
+Added: The Company believes that it effectively evaluates and manages the market, credit, liquidity and other risks to which it is exposed.
Nonetheless, the effectiveness of the Company’s ability to manage risk exposure can never be completely or accurately predicted or fully assured, and there can be no guarantee that the Company’s risk management will be successful.
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There can be no guarantee that the operation of these systems will allow the Company to prevent or mitigate the various risks faced by its businesses.
−Removed: Various regulators periodically review companies’ risk control practices, and, if found inadequate, bring enforcement actions and sanctions against such firms.
+Added: Various regulators periodically review the companies’ risk control practices, and, if found inadequate, bring enforcement actions and sanctions against such firms.
RISKS ASSOCIATED WITH THE COMPANY’S COMMON STOCK
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The voting power associated with the Class B Stock allows holders of Class B Stock to effectively exercise control over all matters requiring stockholder approval, including the election of all directors and approval of significant corporate transactions, and other matters affecting the Company.
−Removed: Approximately 98% of the Class B voting shares are held by an entity controlled by Mr.
+Added: Approximately 98% of the Class B Stock is held by an entity controlled by Mr.
Albert Lowenthal, the Chairman and CEO of the Company, which allows Mr.
Lowenthal to control all matters requiring stockholder approval.
−Removed: Due to the lack of voting power, the Class A stockholders have limited influence on corporate matters.
−Removed: This Class B voting power may have the effect of depressing the price of the Company's Class A Stock, delaying or preventing a change in control of the Company or may result in the receipt of a "control premium" by the controlling stockholder which premium would not be received by the holders of the Class A Stock.
−Removed: The controlling stockholder may have potential conflicts of interest with other stockholders including the ability to determine the outcome of "say on pay" provisions at the Company.
+Added: Due to the lack of voting power, the holders of the Class A Stock have limited influence on corporate matters.
+Added: The voting power of the holders of Class B Stock may have the effect of depressing the price of the Company's Class A Stock, delaying or preventing a change in control of the Company or may result in the receipt of a "control premium" by the controlling stockholder which premium would not be received by the holders of the Class A Stock.
+Added: The controlling stockholder may have potential conflicts of interest with other stockholders including the ability to determine the outcome of "say on pay" votes at the Company.
The trading volume in the Company's Class A Stock is less than that of larger financial services companies.
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Given the lower trading volume of the Company's Class A Stock, significant sales of shares of the Company's Class A Stock, or the expectation of these sales, could cause the Company's Class A Stock price to fall and increase the volatility of the Class A Stock generally.
+Added: We may be removed from market indices.
+Added: Our Class A Stock is listed on the New York Stock Exchange and is included as a component in various market indices.
+Added: At any given time, a company may be added, dropped, or retained as a component of a market index.
+Added: The factors governing whether a company is added, dropped, or retained as a component of a market index may be unique to that index, and may change over time.
+Added: Because certain funds track market indices, changes in constituent components of a tracked index will necessitate purchase or divestitures of shares of the company being added or dropped from the index.
+Added: Consequently, any removal of us from an index of which we are currently a constituent component may result in the sale of our Class A Stock by these funds which may negatively impact the liquidity of our Class A stock.
+Added: We are currently a constituent component of, among others, the Russell 3000 index.
+Added: We have been informed that because voting rights are exclusively associated with our Class B Stock, which does not publically trade, we will be removed from this index in or about May, 2023.
+Added: The Company is the holding company of several operating subsidiaries, and is reliant on dividends and other sources of funding from those subsidiaries to pay dividends to holders of Class A Stock and meet our debt service and other obligations.
+Added: As a holding company, we are dependent on dividends and other sources of liquidity from our various operating subsidiaries in order to meet our debt service obligations, make dividend payments to holders of Class A Stock once declared by our Board of Directors and meet our other obligations.
+Added: Some of our operating subsidiaries are subject to laws and regulations that may restrict the timing and/or amount of dividends that can be distributed to the Company, or provide the regulators such as the SEC or FINRA with the ability to prohibit or reduce the amount of any planned dividend distributions to the Parent.
+Added: Such restrictions could adversely impact the price of the Company’s Class A Stock and/or could impair our ability to pay dividends to holders of Class A Stock.
+Added: Our ability to pay future dividends to holders of Class A Stock is subject to the Board of Directors’ discretion and may be impacted by our financial and operating results.
+Added: Our Board of Directors declared cash dividends of $0.15 per share each quarter in 2022 to holders of Class A and Class B Stock and also authorized the Company to repurchase shares of its Class A Stock.
+Added: The declaration and payment of future cash dividends and authorization of future share repurchases is subject to the Board of Director’s discretion and may be impacted by a number of factors, including but not limited to our net income levels, ability to generate positive operating cash flows, compliance with the Indenture for our Senior Secured Notes, subsidiary capital requirements and general financial and business conditions.
GENERAL BUSINESS AND ECONOMIC RISKS
+Added: Preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that may differ from actual results.
+Added: Additionally, new accounting standards adopted by the relevant standard-setting authorities could impact future reported results.
+Added: The preparation of our consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods.
+Added: In presenting the consolidated financial statements, management makes estimates regarding valuations of financial instruments, loans and allowances for credit losses, the outcome of legal and regulatory matters, goodwill and other intangible assets, share-based compensation plans and income taxes.
+Added: Estimates, by their nature, are based on judgment and available information and may require management to make difficult, subjective and/or complex judgments.
+Added: If management’s estimates and assumptions are inaccurate, our financial position and results could be materially and adversely impacted.
+Added: At times, the Financial Accounting Standards Board (the “FASB”) and the SEC may amend or introduce new accounting standards or interpretive guidance that could impact the preparation of our financial statements.
+Added: The nature and timing of these changes can be difficult to predict and can have a material impact on our financial statements.
+Added: In some cases, the new or revised accounting standard may require retrospective application, which would result in us restating prior-period financial statements.
The effects of the outbreak of the novel coronavirus (COVID-19) have negatively affected the global economy, the United States economy and the global financial markets, and may disrupt our operations and our clients’ operations, which could have an adverse effect on our business, financial condition and results of operations.
The ongoing COVID-19 global and national health emergency has caused significant disruption in the international and United States economies and financial markets.
−Removed: On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.
The spread of COVID-19 has caused widespread illness and death, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, unemployment, labor shortages, supply chain interruptions and overall economic and financial market instability in the United States.
3 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.
−Removed: The ongoing COVID-19 pandemic has impacted stock prices for many companies, and may negatively affect the trading prices for our own securities.
−Removed: 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.
−Removed: This would likely result in a decline in demand for our products and services, which would negatively impact our liquidity position and our growth strategy.
−Removed: 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.
−Removed: The introduction of new vaccines to treat COVID-19 offer the likelihood of the retreat of the pandemic sometime during 2022.
−Removed: 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”.
−Removed: 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.
−Removed: 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.
+Added: We implemented certain elements of our business
+Added: continuity plan in response to the pandemic, and we continue to rely on the related processes and technologies that were established.
+Added: While these plans have been effective, i f COVID-19 or another highly infectious or contagious disease continues to spread, if the response to contain it is unsuccessful, or if there are adverse changes in political conditions or social unrest as a result of the response, we may experience adverse effects on our business, financial condition, liquidity, and/or results of operations.
Developments in market and economic conditions have adversely affected, and may in the future adversely affect, the Company's business and profitability.
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Changes in the Federal Reserve's policies are beyond our control and, consequently, the impact of these changes on our activities and results of our operations are difficult to predict.
−Removed: While global financial markets have shown signs of improvement in recent years, uncertainty remains.
+Added: While many global financial markets have shown signs of improvement in recent years, uncertainty remains.
A period of sustained downturns and/or volatility in the securities markets, and/or prolonged levels of increasing interest rates, could lead to a return to increased credit market dislocations, reductions in the value of real estate, and other negative market factors which could significantly impair our revenues and profitability.
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Concerns about the European Union ("EU"), including Britain's recent exit from the EU ("Brexit"), and the stability of the EU's sovereign debt, has caused uncertainty and disruption for financial markets globally.
+Added: Hostilities between Russia and Ukraine have created uncertainties around the spread of the conflict, the use of nuclear weapons as well as its impact on global supply chains impacting energy supplies and food supplies throughout the world.
+Added: These issues could have unforeseen and negative impacts upon the markets and the Company and its operations.
Continued uncertainties loom over the outcome of the EU's financial support programs.
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The number of engagements the Company has at any given time is subject to change and may not necessarily result in future revenues.
−Removed: 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.
−Removed: We cannot assure that the high level of transactions for SPACs and corresponding high fees will continue indefinitely.
+Added: During 2022, assignments related to special purpose acquisition companies ("SPACs") decreased significantly from the prior year.
+Added: We cannot assure that the volume of transactions for SPACs and corresponding fees will return to prior year's record levels.
Additionally, our investments in SPACs, may be subject to forfeiture, potential regulatory scrutiny and litigation that could negatively affect our financial results.
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These arrangements have increased the competitive pressures on sales commissions and have affected the value the Company's clients place on high-quality research.
−Removed: Moreover, the Company's inability to reach agreement regarding the terms of unbundling
−Removed: 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.
+Added: 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.
−Removed: 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.
+Added: The 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.
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As the costs of doing business increase, the Company may not be able to continue to grow its revenues through “organic” growth (the growth attendant to hiring one employee at a time or through expanding into a new business line through a limited investment in technology and employment).
−Removed: In lieu of organic growth, it becomes increasingly necessary to grow through the acquisition of a business or businesses that fulfill the Company’s strategic decisions for growth.
+Added: In lieu of organic
+Added: growth, it becomes increasingly necessary to grow through the acquisition of a business or businesses that fulfill the Company’s strategic decisions for growth.
However, due to competition or the cost of such acquisitions, such expansion may not be available on a profitable basis and may threaten the Company’s ongoing ability to expand its business.
3 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.
−Removed: The United Kingdom’s recent exit from the EU could impact our overseas operations.
+Added: The United Kingdom’s 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.
−Removed: The withdrawal, among other outcomes, has disrupted the free movement of goods,
−Removed: 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.
+Added: 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.
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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.
−Removed: 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.
+Added: The Company has reviewed 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.
+Added: We presently plan to have an EU office in Portugal to be able to continue to service various constituencies operating inside the EU.
+Added: There is no assurance that this strategy will be successful or effective.
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.
26 unchanged sentences
The Company maintains key man insurance on the life of its CEO.
−Removed: Approximately 98% of the shares of Class B voting Stock are held by Phase II Financial Inc.
+Added: Approximately 98% of the shares of Class B Stock are held by Phase II Financial Inc.
("Phase II"), a Delaware corporation controlled by Mr.
26 unchanged sentences
While the Company has adopted a Code of Conduct and instituted training for its employees, it is difficult to predict when an employee may deviate from acceptable practices and open the Company to liability either from actions taken by other employees or by authorities.
−Removed: 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.
−Removed: 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.