1089044--3/17/2008--LABRANCHE_&_CO

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{stock, price, share}

{product, market, service}

{debt, indebtedness, cash}

{loss, insurance, financial}

{acquisition, growth, future}

{personnel, key, retain}

{system, service, information}

{cost, operation, labor}

{condition, economic, financial}

{regulation, government, change}

{investment, property, distribution}

{stock, price, operating}

{financial, litigation, operation}

{competitive, industry, competition}

The market structure in which we operate may continue to change or lose its viability, making it difficult for us to maintain our levels of profitability. The growth of electronic trading and the introduction of new technology may adversely affect our business and may increase competition. An inability to timely or successfully develop enhanced proprietary specialist trading systems to interact on the NYSE s HYBRID model, as well as the increase in electronic trading on other exchanges, may adversely affect our business and profitability. Our future success will depend on the ability to upgrade information and communications systems, and any failure to do so could harm our business and profitability. As markets become more automated and we are increasingly dependent on high frequency trading algorithms, failures in these algorithms and their development processes could adversely affect our trading and profitability. We are subject to extensive regulation under federal and state laws that could result in investigations, fines or other penalties. We cannot assure you that we will be able to detect or prevent all employee misconduct or rule violations. We also are subject to the risks of securities laws liability and related civil litigation. We may incur losses as a result of our large balance sheet and ineffective risk management processes and strategies. We may have insufficient capital in the future and may be unable to secure additional financing when we need it. Our revenues may decrease due to changes affecting the economy or changes affecting the securities markets, such as decreased volume, volatility or liquidity. Risks associated with our trading transactions could result in trading losses. Derivative transactions may expose us to unexpected risk and potential losses. Specialist and market-maker rules require us to make unprofitable trades and refrain from making profitable trades. Failure to comply with net capital and net liquid asset requirements may result in the revocation of our registration with the SEC or our expulsion from the NYSE and/or the AMEX. Failure to comply with undertakings set forth in the settlement with the NYSE and SEC could adversely affect us. We depend primarily on our specialist and market-making activities, and if they fail to generate revenues as anticipated, it would adversely affect our financial condition and results of operations. We cannot assure you that we will continue to be able to effectively compete in the specialist and market-making industry. We have significant debt obligations that can adversely impact our margins and flexibility of operations. Our ability to take certain actions may be restricted by the terms of our outstanding indebtedness. We may not be able to generate sufficient cash flows to meet our debt service obligations, including payments on the outstanding senior notes. We may not be able to finance a change of control offer required by the indenture governing the outstanding senior notes. Our success depends on our ability to accurately process and record our transactions, and any failure to do so could subject us to losses. If we lose the services of our key personnel or cannot hire additional qualified personnel, our business will be harmed. We may have difficulty successfully managing the evolution of our business. Three of our current or former executive officers are in a position to substantially affect matters requiring a stockholder vote. Risks Associated with the NYSE Acquisitions and Merger of NYSE Regulation and the NASD Regulation The value of the NYSE Euronext Inc. stock we continue to hold following the NYSE/Archipelago merger and NYSE/Euronext merger may significantly lose value. The regulatory environment following the NYSE s completed mergers and the merger of NYSE Regulation s and NASD Regulation could change and thereby adversely affect our compliance and strategic efforts. The role of the specialist on the NYSE may substantially change following the NYSE/Archipelago and NYSE/Euronext mergers and we may not be able to timely adapt. NYSE Euronext, Inc. may not achieve the anticipated cost savings, technology improvements, growth opportunities and other benefits anticipated from the merger transactions, which could adversely affect the operations of the NYSE specialist firms following the mergers.

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1089044--3/17/2008--LABRANCHE_&_CO_INC