1383803--3/13/2008--JMP_Group

related topics

{loss, insurance, financial}

{loan, real, estate}

{investment, property, distribution}

{interest, director, officer}

{competitive, industry, competition}

{financial, litigation, operation}

{personnel, key, retain}

{stock, price, share}

{system, service, information}

{condition, economic, financial}

{acquisition, growth, future}

{product, market, service}

{debt, indebtedness, cash}

{regulation, change, law}

{stock, price, operating}

Risks Related to Our Business We focus principally on specific sectors of the economy, and deterioration in the business environment in these sectors or a decline in the market for securities of companies within these sectors could harm our business. Our financial results from investment banking activities may fluctuate substantially from period to period, which may impair our stock price. Pricing and other competitive pressures may impair the revenues of our sales and trading business. We have made and may make principal investments in relatively high-risk, illiquid assets that often have significantly leveraged capital structures, and we may fail to realize any profits from these activities for a considerable period of time or lose some or all of the principal amount we invest in these activities. Our ability to retain our senior professionals and recruit additional professionals is critical to the success of our business, and our failure to do so may adversely affect our reputation, business, results of operations and financial condition. Our adherence to an internal policy governing compensation and benefits expense may hinder our ability to retain our professionals and recruit additional professionals. We face strong competition from larger firms, some of which have greater resources and name recognition than we do, which may impede our ability to grow our business. We face strong competition from middle-market investment banks. Our corporate finance and strategic advisory engagements are singular in nature and do not generally provide for subsequent engagements. Larger and more frequent capital commitments in our trading and underwriting businesses increase the potential for significant losses. The asset management business is intensely competitive. Poor investment performance may decrease assets under management and reduce revenues from and the profitability of our asset management business. The historical returns of our funds may not be indicative of the future results of our funds. Our asset management clients may generally redeem their investments, which could reduce our asset management fee revenues. We invest our own principal capital in equities that expose us to a significant risk of capital loss. We may make principal investments that have limited liquidity, which may reduce the return on those investments to our stockholders. We may experience writedowns of our investments and other losses related to the valuation of our investments and volatile and illiquid market conditions Limitations on our access to capital could impair our liquidity and our ability to conduct our businesses. There are contractual, legal and other restrictions that may prevent us from paying cash dividends on our common stock and, as a result, you may not receive any return on investment unless you sell your common stock for a price greater than the price for which you paid. We may incur losses as a result of ineffective risk management processes and strategies. Our risk management policies and procedures may leave us exposed to unidentified or unanticipated risks. Our operations and infrastructure and those of the service providers upon which we rely may malfunction or fail. We are subject to risks in using prime brokers and custodians. The demands of running a public company could result in additional costs and require our senior management to devote more time to regulatory and other requirements. Strategic investments or acquisitions and joint ventures, or our entry into new business areas, may result in additional risks and uncertainties in our business. Risks Related to Our Investment in New York Mortgage Trust, Inc. Market developments have reduced and could in the future reduce the amount of liquidity available to NMTR and have caused and could in the future cause NMTR lenders to require NMTR to pledge additional cash or assets as collateral. If NMTR is unable to obtain sufficient short-term financing or NMTR assets are insufficient to meet the collateral requirements, then NMTR may be compelled to liquidate particular assets at an inopportune time and realize significant losses. As credit conditions for mortgage-related securities are tightening and may worsen in the future, the asset values of NMTR s securities may decline and the margin requirements for financing facilities may increase. NMTR s loan delinquencies may increase as a result of significantly increased monthly payments required from ARM borrowers after the initial fixed interest period. NMTR may be required to repurchase loans if NMTR breached representations and warranties from loan sale transactions, which could harm NMTR profitability and financial condition. NMTR may incur increased borrowing costs related to repurchase agreements, which would harm NMTR profitability. Risks Related to Our Industry Difficult market conditions could adversely affect our business in many ways. Significantly expanded corporate governance and public disclosure requirements may result in fewer initial public offerings and discourage companies from engaging in capital market transactions, which may reduce the number of investment banking opportunities available to pursue. Financial services firms have been subject to increased scrutiny over the last several years, increasing the risk of financial liability and reputational harm resulting from adverse regulatory actions. Our exposure to legal liability is significant, and damages and other costs that we may be required to pay in connection with litigation and regulatory inquiries, and the reputational harm that could result from legal action against us, could adversely affect our businesses. Our failure to deal appropriately with conflicts of interest could damage our reputation and adversely affect our business. Misconduct by our employees or by the employees of our business partners could harm us and is difficult to detect and prevent. We may be required to make payments under certain indemnification agreements. If we were deemed an investment company under the Investment Company Act of 1940, applicable restrictions could make it impractical for us to continue our business as contemplated and could have an adverse effect on our business. Our historical financial information may not permit you to predict our costs of operations.

Full 10-K form ▸

1383803--3/13/2008--JMP_Group_Inc.