1292426--3/1/2007--GFI_Group

related topics

{system, service, information}

{acquisition, growth, future}

{financial, litigation, operation}

{personnel, key, retain}

{stock, price, operating}

{competitive, industry, competition}

{debt, indebtedness, cash}

{stock, price, share}

{product, market, service}

{condition, economic, financial}

{control, financial, internal}

{property, intellectual, protect}

{provision, law, control}

{regulation, government, change}

Economic, political and market factors beyond our control could reduce trading volumes, securities prices and demand for our brokerage services, which could harm our business and our profitability. We face substantial competition that could negatively impact our market share and our profitability. Because competition for the services of brokers is intense, we may not be able to attract and retain the highly skilled brokers we need to support our business or we may be required to incur additional expense to do so. We are dependent on our management team, and the loss of any key member of our team may prevent us from executing our business strategy effectively. If we are unable to continue to identify and exploit new market opportunities, our ability to maintain and grow our business may be adversely affected. If we are unable to manage the risks of international operations effectively, our business could be adversely affected. Our clients financial or other problems could adversely affect our business. The securities settlement process exposes us to risks that may impact our liquidity and profitability. In addition, liability for unmatched trades could adversely affect our results of operations and balance sheet. We have market risk exposure from unmatched principal transactions entered into by some of our equity and credit product brokerage desks. Financial problems experienced by third parties could affect the markets in which we provide brokerage services. In addition, a disruption in the credit derivative market could affect our brokerage revenues. We operate in a highly regulated industry and we may face restrictions with respect to the way we conduct certain of our operations. Our regulated subsidiaries are subject to risks associated with net capital requirements, and we may not be able to engage in operations that require significant capital. We are subject to new requirements that we evaluate our internal controls over financial reporting under Section 404 of the Sarbanes-Oxley Act and other corporate governance initiatives that may expose us to certain risks. Our investments in expanding our brokerage and market data and analytics services may not produce substantial revenue or profit. We may have difficulty managing our growth effectively. If we acquire other companies or businesses, or if we hire new brokerage personnel, we may have difficulty integrating their operations. In the event of employee misconduct or error, our business may be harmed. Our credit agreement contains restrictive covenants which may limit our working capital and corporate activities. Computer systems failures, capacity constraints and breaches of security could increase our operating costs and cause us to lose clients. We depend on third-party software licenses. The loss of any of our key licenses could adversely affect our ability to provide our brokerage services. We operate in a rapidly evolving business and technological environment and we must adapt our business effectively and keep up with rapid technological changes in order to compete effectively. We may not be able to obtain additional financing, if needed, on terms that are acceptable. Seasonal fluctuations in trading may cause our quarterly operating results to fluctuate. We may not be able to protect our intellectual property rights or may be prevented from using intellectual property necessary for our business. Consolidation among our clients may cause our revenue to be dependent on a smaller number of clients and may result in additional pricing pressure. Jersey Partners has significant voting power and may take actions that may not be in the best interest of our other stockholders. Provisions of our certificate of incorporation and bylaws, agreements to which we are a party, regulations to which we are subject and provisions of our stock option plans could delay or prevent a change in control of our company and entrench current management. We do not expect to pay any dividends for the foreseeable future. The market price of our common stock may fluctuate in the future, and future sales of our shares could adversely affect the market price of our common stock.

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1292426--3/1/2007--GFI_Group_Inc.