Net revenues were $1.4 million for the quarter ended June 30, 2012, a decline of $1.2 million compared to the first quarter of 2012 and $0.3 million compared to the second quarter of 2011. The reduction in net revenues when compared to the first quarter of 2012 is due to lower net interest income. Net revenues were lower when compared to the second quarter of 2011, primarily due to the changes in value of the Company’s FATV investment.
Consolidated Compensation and Benefits Expenses (including Non-GAAP results)
Compensation and benefits expense was $32.6 million for the second quarter of 2012, a decline of $11.1 million ($9.5 million on a non-GAAP basis) compared to compensation and benefits expense in the first quarter of 2012, and a decline of $4.7 million ($3.0 million on a non-GAAP basis) compared to compensation and benefits expense in the second quarter of 2011.Compensation and benefits expense as a percentage of net revenues was 73.0% for the second quarter of 2012, compared to 67.5% (65.0% on a non-GAAP basis) for the first quarter of 2012 and 66.1% (63.1% on a non-GAAP basis) for the second quarter of 2011. The adverse period-to-period changes in the Company’s compensation as a percentage of revenue was impacted during the second quarter of 2012, by the decline in revenues of the MBS & Rates division, driven by lower net interest income on lower inventory levels, as well as the disruption in sales and trading activities previously described. To a lesser extent, the ratio was also affected by the lower net revenues of ClearPoint when compared to the first quarter of 2012. The Company’s compensation and benefits as a percentage of net revenues was 69.8% (68.3% on a non-GAAP basis) for the six months ended June 30, 2012, compared to 66.1% for the prior-year period.
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