<SEC-DOCUMENT>0000791963-01-500016.txt : 20011101
<SEC-HEADER>0000791963-01-500016.hdr.sgml : 20011101
ACCESSION NUMBER:		0000791963-01-500016
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010930
FILED AS OF DATE:		20011031

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FAHNESTOCK VINER HOLDINGS INC
		CENTRAL INDEX KEY:			0000791963
		STANDARD INDUSTRIAL CLASSIFICATION:	SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211]
		IRS NUMBER:				980080034
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12043
		FILM NUMBER:		1771280

	BUSINESS ADDRESS:	
		STREET 1:		SUITE 1110, P.O. BOX 2015
		STREET 2:		20 EGLINTON AVE. WEST M4R 1K8
		CITY:			TORONTO
		STATE:			A0
		BUSINESS PHONE:		(416)322-1515

	MAIL ADDRESS:	
		STREET 1:		PO BOX 2015 SUITE 1110
		STREET 2:		20 EGLINTON AVENUE WEST
		CITY:			TORONTO M4R 1K8
		STATE:			A6

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GOLDALE INVESTMENTS LTD
		DATE OF NAME CHANGE:	19861030

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VINER E A HOLDINGS LTD
		DATE OF NAME CHANGE:	19880622
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>fq901c.htm
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<p align="center"><font size="3"><b>UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION</b></font></p>

<p align="center"><font size="3"><b>Washington, D.C. 20549</b></font></p>

<p align="center"><font size="3"><b>FORM 10-Q</b></font></p>

<p><font size="3"></font>&nbsp;</p>

<p><font size="3">[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </font></p>

<p><font size="3">For the Quarterly Period ended <b>September 30,
2001</b></font></p>

<p><font size="3">or</font></p>

<p><font size="3">[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </font></p>

<p><font size="3">for the transition period from ___to___</font></p>

<p><font size="3">Commission File Number: 1-12043</font></p>

<p align="center"><font size="3"><b>FAHNESTOCK VINER HOLDINGS
INC.<br>
</b>(Exact name of registrant as specified in its charter)</font></p>

<p><font size="3">Ontario, Canada <br>
(State or other jurisdiction of <br>
incorporation or organization) </font></p>

<p><font size="3">98-0080034<br>
(I.R.S. Employer Identification No.)</font></p>

<p align="center"><font size="3">P.O. Box 2015, Suite 1110<br>
20 Eglinton Avenue West<br>
Toronto, Ontario, Canada M4R 1K8<br>
(Address of principal executive offices) (Zip Code)</font></p>

<p align="center"><font size="3">416-322-1515<br>
(Registrant's telephone number, including area code)</font></p>

<p align="center"><font size="3">Not applicable<br>
(Former name, former address and former fiscal year, if changed
since last report)</font></p>

<p><font size="3">Indicate by check mark whether registrant (1)
has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [ ]</font></p>

<p><font size="3"></font>&nbsp;</p>

<p><font size="3">The number of shares of the Company's Class A
non-voting shares and Class B voting shares (being the only
classes of common stock of the Company), outstanding on October
18, 2001 was 12,303,670 and 99,680 shares, respectively.</font></p>

<p align="center"><font size="3"></font>&nbsp;</p>

<p align="center"><font size="4">FAHNESTOCK VINER HOLDINGS INC.</font></p>

<p align="center"><font size="4">INDEX</font></p>

<p align="center"><font size="3"></font>&nbsp;</p>

<p><font size="3">/ Page No.</font></p>

<p><font size="3">PART I FINANCIAL INFORMATION</font></p>

<p><font size="3">Item 1. Financial Statements (unaudited)</font></p>

<p><font size="3">Condensed Consolidated Balance Sheets as of
September 30, 2001and December 31, 2000 2</font></p>

<p><font size="3">Condensed Consolidated Statements of Operations
for the three and nine months periods ended September 30, 2001
and 2000 4</font></p>

<p><font size="3">Condensed Consolidated Statements of Cash Flows
for the nine month period ended September 30, 2001 and 2000 5</font></p>

<p><font size="3">Notes to Condensed Consolidated Financial
Statements 6</font></p>

<p><font size="3">Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10</font></p>

<p><font size="3">Item 3. Quantitative and Qualitative
Disclosures About Market Risk 12</font></p>

<p><font size="3">PART II OTHER INFORMATION</font></p>

<p><font size="3">Item 1. Legal Proceedings 14</font></p>

<p><font size="3">Item 2. Changes in Securities and Use of
Proceeds 14</font></p>

<p><font size="3">Item 3. Defaults Upon Senior Securities 14</font></p>

<p><font size="3">Item 4. Submission of Matters to a Vote of
Security-Holders 14</font></p>

<p><font size="3">Item 5. Other Information 14 </font></p>

<p><font size="3">Item 6. Exhibits and Reports on Form 8-K 14</font></p>

<p><font size="3">SIGNATURES 15</font></p>

<p><font size="3"></font>&nbsp;</p>

<p><font size="3"></font>&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" width="95%"
bordercolor="#000000">
    <tr>
        <td colspan="4" height="17"><p align="center">FAHNESTOCK
        VINER HOLDINGS INC.</p>
        </td>
    </tr>
    <tr>
        <td colspan="4" height="17"><p align="center">CONDENSED
        CONSOLIDATED BALANCE SHEETS (Unaudited)</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">&nbsp;</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="18">&nbsp;</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18"><p align="right">SEPTEMBER
        30, </p>
        <p align="right">2001</p>
        </td>
        <td width="19%" height="18"><p align="right">DECEMBER 31,
        2000 </p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="18"><i>Expressed in thousands of
        U.S. dollars</i></td>
        <td colspan="3" width="42%" height="18">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="18">&nbsp;</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18">&nbsp;</td>
        <td width="19%" height="18">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="18">ASSETS</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18">&nbsp;</td>
        <td width="19%" height="18">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">Current assets</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">Cash and short-term deposits</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">$11,548</p>
        </td>
        <td width="19%" height="17"><p align="right">$14,669</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Restricted deposits</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">2,224</p>
        </td>
        <td width="19%" height="17"><p align="right">2,712</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Securities purchased under
        agreement to resell</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">2,000</p>
        </td>
        <td width="19%" height="17"><p align="right">23,500</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Deposits with clearing
        organizations</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">4,805</p>
        </td>
        <td width="19%" height="17"><p align="right">5,917</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Receivable from brokers and
        clearing organizations</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">188,601</p>
        </td>
        <td width="19%" height="17"><p align="right">130,657</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Receivable from customers</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">319,722</p>
        </td>
        <td width="19%" height="17"><p align="right">428,582</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Securities owned, including
        amounts pledged of</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">$136 ($532 in 2000), at
        market value</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">42,153</p>
        </td>
        <td width="19%" height="17"><p align="right">51,543</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Other</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">37,693</p>
        </td>
        <td width="19%" height="17"><p align="right">23,050</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">&nbsp;</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">608,746</p>
        </td>
        <td width="19%" height="17"><p align="right">680,630</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Other assets</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">Stock exchange seats
        (approximate market value</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">$8,611; $8,258 in 2000)</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">3,018</p>
        </td>
        <td width="19%" height="17"><p align="right">3,018</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Fixed assets, net of
        accumulated depreciation of</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">$17,194; $14,961 in 2000</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">10,903</p>
        </td>
        <td width="19%" height="17"><p align="right">9,687</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Goodwill, at amortized cost</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">4,602</p>
        </td>
        <td width="19%" height="17"><p align="right">4,147</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">&nbsp;</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">18,523</p>
        </td>
        <td width="19%" height="17"><p align="right">16,852</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">&nbsp;</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="18">&nbsp;</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18"><p align="right">$627,269</p>
        </td>
        <td width="19%" height="18"><p align="right">$697,482</p>
        </td>
    </tr>
</table>

<p>The accompanying notes are an integral part of these condensed
consolidated financial statements.</p>

<p>&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" width="95%"
bordercolor="#000000">
    <tr>
        <td colspan="4" height="18"><p align="center">FAHNESTOCK
        VINER HOLDINGS INC.</p>
        </td>
    </tr>
    <tr>
        <td colspan="4" height="18"><p align="center">CONDENSED
        CONSOLIDATED BALANCE SHEETS (Unaudited)</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="18">&nbsp;</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18">&nbsp;</td>
        <td width="19%" height="18">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="18">&nbsp;</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18"><p align="right">SEPTEMBER
        30,</p>
        <p align="right">2001</p>
        </td>
        <td width="19%" height="18"><p align="right">DECEMBER 31,
        2000 </p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="18"><i>Expressed in thousands of
        U.S. dollars</i></td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18">&nbsp;</td>
        <td width="19%" height="18">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="18">&nbsp;</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18">&nbsp;</td>
        <td width="19%" height="18">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="18">LIABILITIES AND SHAREHOLDERS'
        EQUITY</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18">&nbsp;</td>
        <td width="19%" height="18">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">Current liabilities</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="18">Drafts payable</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18"><p align="right">$11,174</p>
        </td>
        <td width="19%" height="18"><p align="right">$26,464</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="18">Bank call loans</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18"><p align="right">5,383</p>
        </td>
        <td width="19%" height="18"><p align="right">25,899</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Securities sold under
        agreement to repurchase</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">2,000</p>
        </td>
        <td width="19%" height="17"><p align="right">23,500</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Payable to brokers and
        clearing organizations</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">202,389</p>
        </td>
        <td width="19%" height="17"><p align="right">222,150</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Payable to customers</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">89,567</p>
        </td>
        <td width="19%" height="17"><p align="right">124,534</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Securities sold, but not yet
        purchased, at market value</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">8,395</p>
        </td>
        <td width="19%" height="17"><p align="right">8,153</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Accounts payable and other
        liabilities</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">64,653</p>
        </td>
        <td width="19%" height="17"><p align="right">40,003</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Income taxes payable</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">4,253</p>
        </td>
        <td width="19%" height="17"><p align="right">4,979</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">&nbsp;</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">387,814</p>
        </td>
        <td width="19%" height="17"><p align="right">475,682</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">&nbsp;</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">Shareholders' equity</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">Share capital</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">12,303,670 Class A non-voting
        shares</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="17">(2000 - 11,990,969 shares)</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">33,642</p>
        </td>
        <td width="19%" height="17"><p align="right">29,550</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">99,680 Class B voting shares</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">133</p>
        </td>
        <td width="19%" height="17"><p align="right">133</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">&nbsp;</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">33,775</p>
        </td>
        <td width="19%" height="17"><p align="right">29,683</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Contributed capital</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">4,019</p>
        </td>
        <td width="19%" height="17"><p align="right">3,499</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">Retained earnings</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">201,661</p>
        </td>
        <td width="19%" height="17"><p align="right">188,618</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">&nbsp;</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17"><p align="right">239,455</p>
        </td>
        <td width="19%" height="17"><p align="right">221,800</p>
        </td>
    </tr>
    <tr>
        <td width="58%" height="17">&nbsp;</td>
        <td width="1%" height="17">&nbsp;</td>
        <td width="22%" height="17">&nbsp;</td>
        <td width="19%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="58%" height="18">&nbsp;</td>
        <td width="1%" height="18">&nbsp;</td>
        <td width="22%" height="18"><p align="right">$627,269</p>
        </td>
        <td width="19%" height="18"><p align="right">$697,482</p>
        </td>
    </tr>
</table>

<p>The accompanying notes are an integral part of these condensed
consolidated financial statements.</p>

<p>&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" width="95%"
bordercolor="#000000">
    <tr>
        <td colspan="6" height="20"><p align="center">FAHNESTOCK
        VINER HOLDINGS INC.</p>
        </td>
    </tr>
    <tr>
        <td colspan="6" height="20"><p align="center">CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)</p>
        </td>
    </tr>
    <tr>
        <td colspan="6" height="20">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%" height="21"><i>Expressed in thousands of
        U.S.</i><p><i>dollars, except per share amounts</i></p>
        </td>
        <td colspan="2" width="33%" height="21"><p align="center">THREE
        MONTHS ENDED</p>
        <p align="center">SEPTEMBER 30,</p>
        </td>
        <td colspan="3" width="30%" height="21"><p align="center">NINE
        MONTHS ENDED</p>
        <p align="center">SEPTEMBER 30,</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="21">&nbsp;</td>
        <td width="17%" height="21"><p align="center">2001</p>
        </td>
        <td width="17%" height="21"><p align="center">2000</p>
        </td>
        <td colspan="2" width="15%" height="21"><p align="center">2001</p>
        </td>
        <td width="15%" height="21"><p align="center">2000</p>
        </td>
    </tr>
    <tr>
        <td colspan="6" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%" height="20">REVENUE:</td>
        <td width="17%" height="20">&nbsp;</td>
        <td width="17%" height="20">&nbsp;</td>
        <td colspan="2" width="15%" height="20">&nbsp;</td>
        <td width="15%" height="20">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%" height="20">Commissions</td>
        <td width="17%" height="20"><p align="right">$25,683</p>
        </td>
        <td width="17%" height="20"><p align="right">$30,099</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">$82,492</p>
        </td>
        <td width="15%" height="20"><p align="right">$98,147</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Principal transactions, net</td>
        <td width="17%" height="20"><p align="right">11,243</p>
        </td>
        <td width="17%" height="20"><p align="right">15,046</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">41,005</p>
        </td>
        <td width="15%" height="20"><p align="right">72,168</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Interest</td>
        <td width="17%" height="20"><p align="right">6,761</p>
        </td>
        <td width="17%" height="20"><p align="right">15,151</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">28,715</p>
        </td>
        <td width="15%" height="20"><p align="right">42,533</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Underwriting fees</td>
        <td width="17%" height="20"><p align="right">2,779</p>
        </td>
        <td width="17%" height="20"><p align="right">2,366</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">8,199</p>
        </td>
        <td width="15%" height="20"><p align="right">7,479</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Advisory fees</td>
        <td width="17%" height="20"><p align="right">5,462</p>
        </td>
        <td width="17%" height="20"><p align="right">5,275</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">16,978</p>
        </td>
        <td width="15%" height="20"><p align="right">16,068</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Other</td>
        <td width="17%" height="20"><p align="right">1,820</p>
        </td>
        <td width="17%" height="20"><p align="right">1,528</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">6,730</p>
        </td>
        <td width="15%" height="20"><p align="right">5,886</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">&nbsp;</td>
        <td width="17%" height="20"><p align="right">53,748</p>
        </td>
        <td width="17%" height="20"><p align="right">69,465</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">184,119</p>
        </td>
        <td width="15%" height="20"><p align="right">242,281</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">&nbsp;</td>
        <td width="17%" height="20">&nbsp;</td>
        <td width="17%" height="20">&nbsp;</td>
        <td colspan="2" width="15%" height="20">&nbsp;</td>
        <td width="15%" height="20">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%" height="20">EXPENSES:</td>
        <td width="17%" height="20">&nbsp;</td>
        <td width="17%" height="20">&nbsp;</td>
        <td colspan="2" width="15%" height="20">&nbsp;</td>
        <td width="15%" height="20">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%" height="20">Compensation and related
        expenses</td>
        <td width="17%" height="20"><p align="right">32,488</p>
        </td>
        <td width="17%" height="20"><p align="right">36,558</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">101,386</p>
        </td>
        <td width="15%" height="20"><p align="right">118,451</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Clearing and exchange fees</td>
        <td width="17%" height="20"><p align="right">1,440</p>
        </td>
        <td width="17%" height="20"><p align="right">1,184</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">3,981</p>
        </td>
        <td width="15%" height="20"><p align="right">5,091</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Communications</td>
        <td width="17%" height="20"><p align="right">5,118</p>
        </td>
        <td width="17%" height="20"><p align="right">5,593</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">16,629</p>
        </td>
        <td width="15%" height="20"><p align="right">17,506</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Occupancy costs</td>
        <td width="17%" height="20"><p align="right">3,178</p>
        </td>
        <td width="17%" height="20"><p align="right">2,889</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">8,826</p>
        </td>
        <td width="15%" height="20"><p align="right">9,371</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Interest</td>
        <td width="17%" height="20"><p align="right">1,857</p>
        </td>
        <td width="17%" height="20"><p align="right">7,349</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">12,236</p>
        </td>
        <td width="15%" height="20"><p align="right">19,904</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">Other</td>
        <td width="17%" height="20"><p align="right">4,010</p>
        </td>
        <td width="17%" height="20"><p align="right">4,028</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">12,933</p>
        </td>
        <td width="15%" height="20"><p align="right">11,364</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">&nbsp;</td>
        <td width="17%" height="20"><p align="right">48,091</p>
        </td>
        <td width="17%" height="20"><p align="right">57,601</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">155,991</p>
        </td>
        <td width="15%" height="20"><p align="right">181,687</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">&nbsp;</td>
        <td width="17%" height="20">&nbsp;</td>
        <td width="17%" height="20">&nbsp;</td>
        <td colspan="2" width="15%" height="20">&nbsp;</td>
        <td width="15%" height="20">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%" height="21">Profit before income taxes</td>
        <td width="17%" height="21"><p align="right">5,657</p>
        </td>
        <td width="17%" height="21"><p align="right">11,864</p>
        </td>
        <td colspan="2" width="15%" height="21"><p align="right">28,128</p>
        </td>
        <td width="15%" height="21"><p align="right">60,594</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="21">Income tax provision</td>
        <td width="17%" height="21"><p align="right">2,323</p>
        </td>
        <td width="17%" height="21"><p align="right">5,489</p>
        </td>
        <td colspan="2" width="15%" height="21"><p align="right">11,758</p>
        </td>
        <td width="15%" height="21"><p align="right">27,347</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="21">NET PROFIT FOR PERIOD</td>
        <td width="17%" height="21"><p align="right">$3,334</p>
        </td>
        <td width="17%" height="21"><p align="right">$6,375</p>
        </td>
        <td colspan="2" width="15%" height="21"><p align="right">$16,370</p>
        </td>
        <td width="15%" height="21"><p align="right">$33,247</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="21">&nbsp;</td>
        <td width="17%" height="21">&nbsp;</td>
        <td width="17%" height="21">&nbsp;</td>
        <td colspan="2" width="15%" height="21">&nbsp;</td>
        <td width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%" height="20">Profit per share</td>
        <td width="17%" height="20">&nbsp;</td>
        <td width="17%" height="20">&nbsp;</td>
        <td colspan="2" width="15%" height="20">&nbsp;</td>
        <td width="15%" height="20">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%" height="20">- basic</td>
        <td width="17%" height="20"><p align="right">$0.27</p>
        </td>
        <td width="17%" height="20"><p align="right">$0.53</p>
        </td>
        <td colspan="2" width="15%" height="20"><p align="right">$1.33</p>
        </td>
        <td width="15%" height="20"><p align="right">$2.74</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="20">- diluted</td>
        <td width="17%" height="20"><p align="right">$0.26</p>
        </td>
        <td colspan="2" width="17%" height="20"><p align="right">$0.51</p>
        </td>
        <td width="15%" height="20"><p align="right">$1.28</p>
        </td>
        <td width="15%" height="20"><p align="right">$2.69</p>
        </td>
    </tr>
    <tr>
        <td width="37%" height="24">&nbsp;</td>
        <td width="17%" height="24">&nbsp;</td>
        <td width="17%" height="24">&nbsp;</td>
        <td colspan="2" width="15%" height="24">&nbsp;</td>
        <td width="15%" height="24">&nbsp;</td>
    </tr>
</table>

<p>The accompanying notes are an integral part of these condensed
consolidated financial statements.</p>

<p>&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" width="95%"
bordercolor="#000000">
    <tr>
        <td colspan="3" height="16"><p align="center">FAHNESTOCK
        VINER HOLDINGS INC.</p>
        </td>
    </tr>
    <tr>
        <td colspan="3" height="16"><p align="center">CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)</p>
        </td>
    </tr>
    <tr>
        <td colspan="3" height="16"><p align="center">FOR THE
        NINE MONTHS ENDED SEPTEMBER 30, </p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16"><i>Expressed in thousands of
        U.S. dollars</i></td>
        <td width="15%" height="16"><p align="right">2001</p>
        </td>
        <td width="13%" height="16"><p align="right">2000</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Cash flows from operating
        activities:</td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">Net profit for the period</td>
        <td width="15%" height="16"><p align="right">$16,370</p>
        </td>
        <td width="13%" height="16"><p align="right">$33,247 </p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Adjustments to reconcile net
        profit to net cash provided by (used in)</td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">operating activities:</td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">Non-cash items included in
        net profit:</td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">Depreciation and amortization</td>
        <td width="15%" height="16"><p align="right">2,560</p>
        </td>
        <td width="13%" height="16"><p align="right">2,541 </p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Decrease (increase) in
        operating assets, net of the effect of </td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">acquisitions:</td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">Restricted deposits</td>
        <td width="15%" height="16"><p align="right">488</p>
        </td>
        <td width="13%" height="16"><p align="right">25</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Securities purchased under
        agreement to resell</td>
        <td width="15%" height="16"><p align="right">21,500</p>
        </td>
        <td width="13%" height="16"><p align="right">47,980</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Deposits with clearing
        organizations</td>
        <td width="15%" height="16"><p align="right">1,112</p>
        </td>
        <td width="13%" height="16"><p align="right">1,120</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Receivable from brokers and
        clearing organizations</td>
        <td width="15%" height="16"><p align="right">(51,519)</p>
        </td>
        <td width="13%" height="16"><p align="right">(30,391)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Receivable from customers</td>
        <td width="15%" height="16"><p align="right">108,860</p>
        </td>
        <td width="13%" height="16"><p align="right">(74,853)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Securities owned</td>
        <td width="15%" height="16"><p align="right">9,667</p>
        </td>
        <td width="13%" height="16"><p align="right">14,906</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Other assets</td>
        <td width="15%" height="16"><p align="right">(4,242)</p>
        </td>
        <td width="13%" height="16"><p align="right">1,880</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Increase (decrease) in
        operating liabilities, net of the effect of </td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">acquisitions:</td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">Drafts payable</td>
        <td width="15%" height="16"><p align="right">(15,290)</p>
        </td>
        <td width="13%" height="16"><p align="right">8,743</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Securities sold under
        agreement to repurchase</td>
        <td width="15%" height="16"><p align="right">(21,500)</p>
        </td>
        <td width="13%" height="16"><p align="right">(45,519) </p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Payable to brokers and
        clearing organizations</td>
        <td width="15%" height="16"><p align="right">(19,761)</p>
        </td>
        <td width="13%" height="16"><p align="right">116,152 </p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Payable to customers</td>
        <td width="15%" height="16"><p align="right">(34,967)</p>
        </td>
        <td width="13%" height="16"><p align="right">(18,308)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Securities sold, but not yet
        purchased</td>
        <td width="15%" height="16"><p align="right">22</p>
        </td>
        <td width="13%" height="16"><p align="right">(5,975)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Accounts payable and other
        liabilities</td>
        <td width="15%" height="16"><p align="right">985</p>
        </td>
        <td width="13%" height="16"><p align="right">(992)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Tax benefit from employee
        stock options exercised</td>
        <td width="15%" height="16"><p align="right">520</p>
        </td>
        <td width="13%" height="16"><p align="right">-</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Income taxes payable</td>
        <td width="15%" height="16"><p align="right">(726)</p>
        </td>
        <td width="13%" height="16"><p align="right">(8,089) </p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Cash provided by operating
        activities</td>
        <td width="15%" height="16"><p align="right">14,079</p>
        </td>
        <td width="13%" height="16"><p align="right">42,467</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Cash flows from investing
        activities:</td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">Net cash acquired on purchase
        of Josephthal Group, Inc., </td>
        <td width="15%" height="16"><p align="right">3,139</p>
        </td>
        <td width="13%" height="16"><p align="right">-</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Purchase of Propp &amp;
        Company, Inc., net of cash acquired</td>
        <td width="15%" height="16"><p align="right">-</p>
        </td>
        <td width="13%" height="16"><p align="right">(883)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Purchase of fixed assets</td>
        <td width="15%" height="16"><p align="right">(587)</p>
        </td>
        <td width="13%" height="16"><p align="right">(1,493)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Cash provided by (used in)
        investing activities</td>
        <td width="15%" height="16"><p align="right">2,552</p>
        </td>
        <td width="13%" height="16"><p align="right">(2,376)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Cash flows from financing
        activities:</td>
        <td width="15%" height="16">&nbsp;</td>
        <td width="13%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="72%" height="16">Cash dividends paid on Class
        A non-voting and Class B shares</td>
        <td width="15%" height="16"><p align="right">(3,327)</p>
        </td>
        <td width="13%" height="16"><p align="right">(2,790)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Issuance of Class A
        non-voting shares</td>
        <td width="15%" height="16"><p align="right">4,221</p>
        </td>
        <td width="13%" height="16"><p align="right">855</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Repurchase of Class A
        non-voting shares for cancellation</td>
        <td width="15%" height="16"><p align="right">(130)</p>
        </td>
        <td width="13%" height="16"><p align="right">(3,916)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Decrease in bank call loans</td>
        <td width="15%" height="16"><p align="right">(20,516)</p>
        </td>
        <td width="13%" height="16"><p align="right">(33,039)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Cash used in financing
        activities</td>
        <td width="15%" height="16"><p align="right">(19,752)</p>
        </td>
        <td width="13%" height="16"><p align="right">(38,890)</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Net (decrease) increase in
        cash and short-term deposits</td>
        <td width="15%" height="16"><p align="right">(3,121)</p>
        </td>
        <td width="13%" height="16"><p align="right">1,201</p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Cash and short-term deposits,
        beginning of period</td>
        <td width="15%" height="16"><p align="right">14,669</p>
        </td>
        <td width="13%" height="16"><p align="right">10,838 </p>
        </td>
    </tr>
    <tr>
        <td width="72%" height="16">Cash and short-term deposits,
        end of period</td>
        <td width="15%" height="16"><p align="right">$11,548</p>
        </td>
        <td width="13%" height="16"><p align="right">$12,039 </p>
        </td>
    </tr>
</table>

<p>The accompanying notes are an integral part of these condensed
consolidated financial statements.</p>

<p>&nbsp;</p>

<p align="center">FAHNESTOCK VINER HOLDINGS INC.<br>
Notes to Condensed Consolidated Financial Statements (Unaudited)</p>

<p>1. Basis of Presentation</p>

<p>The condensed consolidated financial statements include the
accounts of Fahnestock Viner Holdings Inc. (&quot;FVH&quot;) and
its subsidiaries (together, the &quot;Company&quot;). The
principal subsidiaries of FVH are Fahnestock &amp; Co. Inc.
(&quot;Fahnestock&quot;) and since September 17, 2001, Josephthal
&amp; Co. Inc. (&quot;Josephthal&quot;), registered
broker-dealers in securities. The Company engages in a broad
range of activities in the securities industry, including retail
securities brokerage, institutional sales and trading, investment
banking (both corporate and public finance), underwritings,
research, market-making, and investment advisory and asset
management services. The Company provides its services from 100
offices in 19 states located primarily in the Northeastern United
States, Michigan, the Midwest and Florida. Fahnestock also
conducts business in Toronto, Canada and in South America through
local broker-dealers. The Company employs approximately 1,850
people, of whom over 1,000 are financial consultants. </p>

<p>All material intercompany accounts have been eliminated in
consolidation. </p>

<p>The Company&#146;s condensed consolidated financial statements
have been prepared in accordance with the rules and regulations
of the Securities and Exchange Commission (&quot;SEC&quot;) with
respect to Form 10-Q and do not include all of the information
and footnotes required under accounting principles generally
accepted in the United States of America for complete financial
statements. These financial statements should be read in
conjunction with the Company&#146;s most recent annual report on
Form 10-K for the year ended December 31, 2000 including the
summary of significant accounting policies utilized by the
Company. </p>

<p>The financial statements include all adjustments which, in the
opinion of management, are normal and recurring and necessary for
a fair presentation of the results of operations, financial
position and cash flows for the interim periods presented. The
nature of the Company&#146;s business is such that the results of
operations for the interim periods are not necessarily indicative
of the results to be expected for a full year.</p>

<p>These condensed consolidated financial statements are
presented in U.S. dollars.</p>

<p>&nbsp;</p>

<p>2. Recent Accounting Pronouncements</p>

<p>In June 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 141,
&quot;Business Combinations&quot;, and No. 142, &quot;Goodwill
and Other Intangible Assets&quot;. SFAS 141 mandates the purchase
method of accounting be used for all business combinations
initiated after June 30, 2001 and establishes specific criteria
for the recognition of intangible assets separately from
goodwill. SFAS 142 addresses the accounting for goodwill and
other intangible assets subsequent to their acquisition. Under
the new rules, goodwill and other intangible assets deemed to
have indefinite lives will no longer be amortized but, instead,
will be tested at least annually for impairment. All other
intangible assets will continue to be amortized over their
estimated useful lives. The Company intends to fully adopt the
new rules on January 1, 2002, the beginning of fiscal 2002. The
Company has not yet determined the impact that these standards
could have on its consolidated financial position or results of
operations.</p>

<p>&nbsp;</p>

<p>3. Earnings per share</p>

<p>Basic earnings per share was computed by dividing net profit
by the weighted average number of Class A non-voting and Class B
shares outstanding. Diluted earnings per share includes the
weighted average Class A non-voting and Class B shares
outstanding and the effects of Class A non-voting share options
using the treasury stock method.</p>

<p>Earnings per share has been calculated as follows:</p>

<table border="0" cellpadding="0" cellspacing="0" width="95%"
bordercolor="#000000">
    <tr>
        <td width="34%" height="16">&nbsp;</td>
        <td colspan="2" width="33%" height="16"><p align="center">Three
        Months Ended September 30,</p>
        </td>
        <td colspan="2" width="34%" height="16"><p align="center">Nine
        Months ended </p>
        <p align="center">September 30,</p>
        </td>
    </tr>
    <tr>
        <td width="34%" height="16">&nbsp;</td>
        <td width="16%" height="16"><p align="right"><u>2001</u></p>
        </td>
        <td width="17%" height="16"><p align="right"><u>2000</u></p>
        </td>
        <td width="16%" height="16"><p align="right"><u>2001</u></p>
        </td>
        <td width="18%" height="16"><p align="right"><u>2000</u></p>
        </td>
    </tr>
    <tr>
        <td width="34%" height="16">&nbsp;</td>
        <td width="16%" height="16">&nbsp;</td>
        <td width="17%" height="16">&nbsp;</td>
        <td width="16%" height="16">&nbsp;</td>
        <td width="18%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="34%" height="16">Basic weighted average number
        of shares outstanding</td>
        <td width="16%" height="16"><p align="right">12,396,537</p>
        </td>
        <td width="17%" height="16"><p align="right">12,067,763</p>
        </td>
        <td width="16%" height="16"><p align="right">12,324,161</p>
        </td>
        <td width="18%" height="16"><p align="right">12,116,620</p>
        </td>
    </tr>
    <tr>
        <td width="34%" height="16">Net effect, treasury method</td>
        <td width="16%" height="16"><p align="right">459,069</p>
        </td>
        <td width="17%" height="16"><p align="right">410,142</p>
        </td>
        <td width="16%" height="16"><p align="right">445,599</p>
        </td>
        <td width="18%" height="16"><p align="right">242,721</p>
        </td>
    </tr>
    <tr>
        <td width="34%" height="17">Diluted common shares</td>
        <td width="16%" height="17"><p align="right">12,855,606</p>
        </td>
        <td width="17%" height="17"><p align="right">12,477,905</p>
        </td>
        <td width="16%" height="17"><p align="right">12,769,760</p>
        </td>
        <td width="18%" height="17"><p align="right">12,359,341</p>
        </td>
    </tr>
    <tr>
        <td width="34%" height="17">&nbsp;</td>
        <td width="16%" height="17">&nbsp;</td>
        <td width="17%" height="17">&nbsp;</td>
        <td width="16%" height="17">&nbsp;</td>
        <td width="18%" height="17">&nbsp;</td>
    </tr>
    <tr>
        <td width="34%" height="16">Net profit for the period</td>
        <td width="16%" height="16"><p align="right">$3,334,000</p>
        </td>
        <td width="17%" height="16"><p align="right">$6,375,000</p>
        </td>
        <td width="16%" height="16"><p align="right">$16,370,000</p>
        </td>
        <td width="18%" height="16"><p align="right">$33,247,000</p>
        </td>
    </tr>
    <tr>
        <td width="34%" height="16">&nbsp;</td>
        <td width="16%" height="16">&nbsp;</td>
        <td width="17%" height="16">&nbsp;</td>
        <td width="16%" height="16">&nbsp;</td>
        <td width="18%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td width="34%" height="16">Basic profit per share</td>
        <td width="16%" height="16"><p align="right">$0.27</p>
        </td>
        <td width="17%" height="16"><p align="right">$0.53</p>
        </td>
        <td width="16%" height="16"><p align="right">$1.33</p>
        </td>
        <td width="18%" height="16"><p align="right">$2.74</p>
        </td>
    </tr>
    <tr>
        <td width="34%" height="16">Diluted profit per share</td>
        <td width="16%" height="16"><p align="right">$0.26</p>
        </td>
        <td width="17%" height="16"><p align="right">$0.51</p>
        </td>
        <td width="16%" height="16"><p align="right">$1.28</p>
        </td>
        <td width="18%" height="16"><p align="right">$2.69</p>
        </td>
    </tr>
</table>

<p>&nbsp;</p>

<p>4. Net Capital Requirements</p>

<p>The Company's principal broker-dealer subsidiaries, Fahnestock
and Josephthal, are subject to the Uniform Net Capital Rule (the
&quot;Rule&quot;) of the SEC and the net capital rule of the New
York Stock Exchange (the &quot;NYSE&quot;). Fahnestock and
Josephthal have elected to use the alternative method permitted
by the Rule, which requires that they maintain minimum net
capital equal to 2% of aggregate debit items arising from
customer transactions, as defined. The NYSE may prohibit a member
firm from expanding its business or paying dividends if resulting
net capital would be less than 5% of aggregate debit items. </p>

<p>At September 30, 2001, the net capital of Fahnestock as
calculated under the Rule was $173,242,000 or 50% of Fahnestock's
aggregate debit items. This was $166,337,000 in excess of the
minimum required net capital. At September 30, 2001, the net
capital of Josephthal &amp; Co. Inc. as calculated under the Rule
was $1,727,000. This was $1,477,000 in excess of the minimum
required net capital.</p>

<p>&nbsp;</p>

<p>5. Segment Information</p>

<p>The table below presents information about the reported
operating income of the Company for the periods noted, in
accordance with the method described in the Company&#146;s Annual
Report on Form 10-K for the year ended December 31, 2000. The
Company&#146;s business is conducted primarily in the U.S. Asset
information by reportable segment is not reported, since the
Company does not produce such information for internal use.</p>

<table border="0" cellpadding="0" cellspacing="0" width="95%">
    <tr>
        <td width="37%"><i>Expressed in thousands of U.S. dollars</i></td>
        <td colspan="2" width="33%"><p align="center">Three
        Months ended </p>
        <p align="center">September 30,</p>
        </td>
        <td colspan="2" width="30%"><p align="center">Nine Months
        Ended</p>
        <p align="center">September 30,</p>
        </td>
    </tr>
    <tr>
        <td width="37%">&nbsp;</td>
        <td width="16%"><p align="center">2001</p>
        </td>
        <td width="17%"><p align="center">2000</p>
        </td>
        <td width="15%"><p align="right">2001</p>
        </td>
        <td width="16%"><p align="right">2000</p>
        </td>
    </tr>
    <tr>
        <td width="37%">Revenue:</td>
        <td width="16%">&nbsp;</td>
        <td width="17%">&nbsp;</td>
        <td width="15%">&nbsp;</td>
        <td width="16%">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%">Private Client</td>
        <td width="16%"><p align="right">$27,145</p>
        </td>
        <td width="17%"><p align="right">$34,965</p>
        </td>
        <td width="15%"><p align="right">$89,739</p>
        </td>
        <td width="16%"><p align="right">$120,429</p>
        </td>
    </tr>
    <tr>
        <td width="37%">Capital Markets</td>
        <td width="16%"><p align="right">15,014</p>
        </td>
        <td width="17%"><p align="right">15,843</p>
        </td>
        <td width="15%"><p align="right">51,251</p>
        </td>
        <td width="16%"><p align="right">68,039</p>
        </td>
    </tr>
    <tr>
        <td width="37%">Asset Management</td>
        <td width="16%"><p align="right">3,994</p>
        </td>
        <td width="17%"><p align="right">3,281</p>
        </td>
        <td width="15%"><p align="right">11,513</p>
        </td>
        <td width="16%"><p align="right">9,818</p>
        </td>
    </tr>
    <tr>
        <td width="37%">Interest</td>
        <td width="16%"><p align="right">6,483</p>
        </td>
        <td width="17%"><p align="right">14,369</p>
        </td>
        <td width="15%"><p align="right">27,046</p>
        </td>
        <td width="16%"><p align="right">40,449</p>
        </td>
    </tr>
    <tr>
        <td width="37%">Other</td>
        <td width="16%"><p align="right">1,112</p>
        </td>
        <td width="17%"><p align="right">1,007</p>
        </td>
        <td width="15%"><p align="right">4,570</p>
        </td>
        <td width="16%"><p align="right">3,546</p>
        </td>
    </tr>
    <tr>
        <td width="37%">&nbsp;</td>
        <td width="16%">&nbsp;</td>
        <td width="17%">&nbsp;</td>
        <td width="15%">&nbsp;</td>
        <td width="16%">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%">Total</td>
        <td width="16%"><p align="right">$53,748</p>
        </td>
        <td width="17%"><p align="right">$69,465</p>
        </td>
        <td width="15%"><p align="right">$184,119</p>
        </td>
        <td width="16%"><p align="right">$242,281</p>
        </td>
    </tr>
    <tr>
        <td width="37%">&nbsp;</td>
        <td width="16%">&nbsp;</td>
        <td width="17%">&nbsp;</td>
        <td width="15%">&nbsp;</td>
        <td width="16%">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%">Operating Income:</td>
        <td width="16%">&nbsp;</td>
        <td width="17%">&nbsp;</td>
        <td width="15%">&nbsp;</td>
        <td width="16%">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%">Private Client</td>
        <td width="16%"><p align="right">$(3,293)</p>
        </td>
        <td width="17%"><p align="right">$751</p>
        </td>
        <td width="15%"><p align="right">$(3,960)</p>
        </td>
        <td width="16%"><p align="right">$6,524</p>
        </td>
    </tr>
    <tr>
        <td width="37%">Capital Markets</td>
        <td width="16%"><p align="right">2,215</p>
        </td>
        <td width="17%"><p align="right">3,143</p>
        </td>
        <td width="15%"><p align="right">10,226</p>
        </td>
        <td width="16%"><p align="right">25,110</p>
        </td>
    </tr>
    <tr>
        <td width="37%">Asset Management</td>
        <td width="16%"><p align="right">2,748</p>
        </td>
        <td width="17%"><p align="right">1,987</p>
        </td>
        <td width="15%"><p align="right">7,896</p>
        </td>
        <td width="16%"><p align="right">6,053</p>
        </td>
    </tr>
    <tr>
        <td width="37%">Interest</td>
        <td width="16%"><p align="right">4,287</p>
        </td>
        <td width="17%"><p align="right">6,149</p>
        </td>
        <td width="15%"><p align="right">13,381</p>
        </td>
        <td width="16%"><p align="right">18,876</p>
        </td>
    </tr>
    <tr>
        <td width="37%">Other</td>
        <td width="16%"><p align="right">(300)</p>
        </td>
        <td width="17%"><p align="right">(166)</p>
        </td>
        <td width="15%"><p align="right">585</p>
        </td>
        <td width="16%"><p align="right">4,031</p>
        </td>
    </tr>
    <tr>
        <td width="37%">&nbsp;</td>
        <td width="16%">&nbsp;</td>
        <td width="17%">&nbsp;</td>
        <td width="15%">&nbsp;</td>
        <td width="16%">&nbsp;</td>
    </tr>
    <tr>
        <td width="37%">Total</td>
        <td width="16%"><p align="right">$5,657</p>
        </td>
        <td width="17%"><p align="right">$11,864</p>
        </td>
        <td width="15%"><p align="right">$28,128</p>
        </td>
        <td width="16%"><p align="right">$60,594</p>
        </td>
    </tr>
</table>

<p>&nbsp;</p>

<p>6. Acquisitions</p>

<p>On September 17, 2001, the Company, through an indirect
wholly-owned subsidiary, acquired substantially all of the
outstanding common shares of Josephthal Group, Inc., which
indirectly owns 100% of Josephthal &amp; Co., Inc, a private New
York-based, full service broker-dealer with approximately 265
financial consultants in 25 offices across the United States. The
results of Josephthal&#146;s operations have been included in the
consolidated financial statements since that date. Josephthal was
founded in 1910 and is a member of the New York Stock Exchange
and other principal exchanges. With this acquisition, the Company
has in its employ over 1,000 financial consultants in 100
offices, and has combined client assets under administration in
excess of $20 billion.</p>

<p>The following table summarizes the estimated fair values of
assets acquired and liabilities assumed at the date of
acquisition. The Company is currently assessing the valuation of
potential intangible assets, other than goodwill and of certain
liabilities and thus, the summary of fair values is subject to
change.</p>

<p align="center">Josephthal Group, Inc.<br>
Balance Sheet<br>
As at September 17, 2001</p>
<div align="center"><center>

<table border="0" cellpadding="0" cellspacing="0" width="95%">
    <tr>
        <td width="82%">&nbsp;</td>
        <td width="18%">&nbsp;</td>
    </tr>
    <tr>
        <td width="82%" height="15">Cash and cash equivalents</td>
        <td width="18%" height="15"><p align="right">$3,139,000</p>
        </td>
    </tr>
    <tr>
        <td width="82%">Securities owned, at market</td>
        <td width="18%"><p align="right">277,000</p>
        </td>
    </tr>
    <tr>
        <td width="82%">Receivable from brokers, dealers and
        clearing organizations</td>
        <td width="18%"><p align="right">6,425,000</p>
        </td>
    </tr>
    <tr>
        <td width="82%">Furniture, equipments and leasehold
        improvements, net</td>
        <td width="18%"><p align="right">2,864,000</p>
        </td>
    </tr>
    <tr>
        <td width="82%">Deposits and other assets</td>
        <td width="18%"><p align="right">10,400,000</p>
        </td>
    </tr>
    <tr>
        <td width="82%">&nbsp;</td>
        <td width="18%">&nbsp;</td>
    </tr>
    <tr>
        <td width="82%">&nbsp;</td>
        <td width="18%"><p align="right">23,105,000</p>
        </td>
    </tr>
    <tr>
        <td width="82%">Deduct:</td>
        <td width="18%">&nbsp;</td>
    </tr>
    <tr>
        <td width="82%">Securities sold, but not yet purchased,
        at market</td>
        <td width="18%"><p align="right">(220,000)</p>
        </td>
    </tr>
    <tr>
        <td width="82%">Accounts payable, accrued expenses and
        other liabilities</td>
        <td width="18%"><p align="right">(23,665,000)</p>
        </td>
    </tr>
    <tr>
        <td width="82%">&nbsp;</td>
        <td width="18%">&nbsp;</td>
    </tr>
    <tr>
        <td width="82%">Excess of cost over fair value of assets
        acquired, preliminarily allocated to goodwill</td>
        <td width="18%"><p align="right">$780,000</p>
        </td>
    </tr>
    <tr>
        <td width="82%">&nbsp;</td>
        <td width="18%">&nbsp;</td>
    </tr>
</table>
</center></div>

<p>Presented below are the unaudited proforma consolidated
results of operations which give effect to the acquisition of
Josephthal as if the transaction was consummated at the beginning
of each of the periods presented. The proforma information is for
comparative purposes only and is not necessarily indicative
either of the actual results that would have occurred if the
acquisition had been consummated at the beginning of the period
presented, or of future operations of the combined companies. The
Company has not yet determined the amount, if any, to be
allocated to intangible assets other than goodwill and thus, the
results do not include any amortization of such intangible
assets, if any.</p>

<table border="0" cellpadding="0" cellspacing="0" width="95%">
    <tr>
        <td width="22%">&nbsp;</td>
        <td colspan="2" width="39%">Three months ended September
        30,</td>
        <td colspan="2" width="39%">Nine months ended September
        30,</td>
    </tr>
    <tr>
        <td width="22%">&nbsp;</td>
        <td width="20%"><p align="center">2001</p>
        </td>
        <td width="20%"><p align="center">2000</p>
        </td>
        <td width="20%"><p align="center">2001</p>
        </td>
        <td width="20%"><p align="center">2000</p>
        </td>
    </tr>
    <tr>
        <td width="22%">&nbsp;</td>
        <td width="20%">&nbsp;</td>
        <td width="20%">&nbsp;</td>
        <td width="20%">&nbsp;</td>
        <td width="20%">&nbsp;</td>
    </tr>
    <tr>
        <td width="22%">Revenue</td>
        <td width="20%"><p align="right">$71,475</p>
        </td>
        <td width="20%"><p align="right">$98,173</p>
        </td>
        <td width="20%"><p align="right">$247,740</p>
        </td>
        <td width="20%"><p align="right">$360,622</p>
        </td>
    </tr>
    <tr>
        <td width="22%">Profit before extraordinary items</td>
        <td width="20%"><p align="right">$1,857</p>
        </td>
        <td width="20%"><p align="right">$9,882</p>
        </td>
        <td width="20%"><p align="right">$18,921</p>
        </td>
        <td width="20%"><p align="right">$63,922</p>
        </td>
    </tr>
    <tr>
        <td width="22%">Profit before tax</td>
        <td width="20%"><p align="right">$1,857</p>
        </td>
        <td width="20%"><p align="right">$9,882</p>
        </td>
        <td width="20%"><p align="right">$18,921</p>
        </td>
        <td width="20%"><p align="right">$63,922</p>
        </td>
    </tr>
    <tr>
        <td width="22%">Net profit</td>
        <td width="20%"><p align="right">$1,170</p>
        </td>
        <td width="20%"><p align="right">$5,142</p>
        </td>
        <td width="20%"><p align="right">$11,054</p>
        </td>
        <td width="20%"><p align="right">$34,327</p>
        </td>
    </tr>
    <tr>
        <td width="22%">Earnings per share</td>
        <td width="20%">&nbsp;</td>
        <td width="20%">&nbsp;</td>
        <td width="20%">&nbsp;</td>
        <td width="20%">&nbsp;</td>
    </tr>
    <tr>
        <td width="22%">Basic</td>
        <td width="20%"><p align="right">$0.09</p>
        </td>
        <td width="20%"><p align="right">$0.43</p>
        </td>
        <td width="20%"><p align="right">$0.90</p>
        </td>
        <td width="20%"><p align="right">$2.83</p>
        </td>
    </tr>
    <tr>
        <td width="22%">Diluted</td>
        <td width="20%"><p align="right">$0.09</p>
        </td>
        <td width="20%"><p align="right">$0.41</p>
        </td>
        <td width="20%"><p align="right">$0.87</p>
        </td>
        <td width="20%"><p align="right">$2.78</p>
        </td>
    </tr>
</table>

<p>&nbsp;</p>

<p>7. Subsequent Events</p>

<p>In October, 2001, the Company agreed to acquire Grand Charter
Group, Incorporated, which owns 100% of Prime Charter Ltd., a
twelve year old full service securities firm with approximately
100 financial consultants headquartered in New York City. Prime
Charter is a member firm of the NASD and operates from two
offices in New York City and Boca Raton, Florida. </p>

<p>&nbsp;</p>

<p>ITEM 2. Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations</p>

<p>The securities industry is directly affected by general
economic and market conditions, including fluctuations in volume
and price levels of securities and changes in interest rates, all
of which have an impact on commissions and firm trading and
investment income as well as on liquidity. Substantial
fluctuations can occur in revenues and net income due to these
and other factors.</p>

<p>Results of Operations</p>

<p>Net profit was U.S.$3,334,000 or $0.27 per share for the third
quarter ended September 30, 2001 compared to U.S.$6,375,000 or
$0.53 per share for the third quarter of 2000, a decrease of 48%
in net profit. Revenue for the third quarter of 2001 was
U.S.$53,748,000, a decrease of 23% compared to revenue of
U.S.$69,465,000 in the third quarter of 2000.</p>

<p>On September 11, 2001, attacks by terrorists on the World
Trade Center and the Pentagon irretrievably damaged North
America&#146;s sense of invulnerability at home. The
repercussions have had and will have far reaching consequences
going beyond the personal losses experienced by many Americans
and their families. An already fragile economic environment
probably has tipped into recession. Despite continuing interest
rate reductions and calls to resume normal behavior, investors
remain skittish and markets are extremely volatile. Only time
will tell what the long-term impact of these events will be on
investors, the economy, and North American society.</p>

<p>Weak and uncertain markets, together with the fact that
markets in the United States were closed for four days in
September 2001 following the terrorist bombings, had a drastic
effect on the Company&#146;s revenues from commissions and
principal transactions in the third quarter of 2001 compared to
the third quarter of 2000. Declining interest rates throughout
2001 and lower customer margin balances reduced net interest
income in the third quarter of 2001 compared to the same period
in 2000. </p>

<p>On September 17, 2001 the Company purchased substantially all
of the outstanding shares of Josephthal Group, Inc., the parent
of Josephthal &amp; Co. Inc., a full service securities firm
headquartered in New York City with approximately 265 financial
consultants in 25 offices across the United States. Josephthal
was founded in 1910 and is a member of the New York Stock
Exchange and other principal exchanges. The consolidated results
of operations for the third quarter 2001 include the operations
of Josephthal Group from the date of acquisition. Josephthal is
currently operating at a loss. The pretax impact of the
Josephthal acquisition in the Company&#146;s consolidated results
for the third quarter 2001 is a loss of approximately $1,140,000.
The Company has plans to assume the clearing of the Josephthal
client accounts in early November and every effort is being made
to streamline the combined operations and effect cost savings as
quickly and efficiently as possible.</p>

<p>Commission income and to a large extent, income from principal
transactions, depend on market volume levels. Commission revenue
decreased by 15% in the third quarter of 2001 compared to the
third quarter of 2000 with markets generating lower volumes in
2001 compared to 2000 as a result both of reduced investor
activity during the summer of 2001 and a complete halt in all
activity for four days in September following the terrorist
attacks on September 11<sup>th</sup> partially offset by
commission income contributed by Josephthal in the
post-acquisition period. Net revenue from principal transactions
decreased by 25% compared to the third quarter of 2000 due to
market volatility, significantly reduced activity, and reduced
spreads (the difference between bid and ask) in the NASDAQ
markets resulting from the decimalization of NASDAQ markets which
became effective in the third quarter of 2001. For these reasons,
the Company reduced the number of securities in which it makes
markets. It may increase or decrease this number from time to
time as market conditions warrant. Investment banking revenues
increased by 17% in the third quarter of 2001 compared with the
third quarter of 2000 as a result of several merger and
acquisition assignments that closed during the 2001 quarter.
Advisory fees increased by 4% in the third quarter of 2001
compared to the third quarter of 2000 as a result of increased
fees from increased balances in money market funds. Net interest
revenue (interest revenue less interest expense) decreased by 37%
in the third quarter of 2001 compared to the third quarter of
2000 as a result of significantly lower U.S. interest rates and
lower customer margin balances. </p>

<p>Expenses decreased by 17% in the third quarter of 2001
compared to the third quarter of 2000. Compensation expense has
volume-related components and, therefore, with the decreased
level of business conducted in the third quarter of 2001 compared
to the third quarter of 2000, decreased by 11%, partially offset
by the increased compensation costs resulting from the
post-acquisition operations of Josephthal. The cost of
communications and technology decreased 8% in the third quarter
of 2001 compared to the third quarter of 2000 due to benefits
derived from reductions in telecommunications costs from vendors,
which more than offset the effect of the acquisition of
Josephthal on September 17, 2001. Occupancy costs increased by
10% in the third quarter of 2001 compared to the third quarter of
2000 reflecting the addition of 25 locations with the acquisition
of Josephthal in September 2001. </p>

<p>Liquidity and Capital Resources</p>

<p>Total assets at September 30, 2001 were $627,269,000, a
decrease of approximately 10% from $697,482,000 at December 31,
2000 due primarily to lower customer balances, as well as the
discontinuation of the Company&#146;s matched book business and
reduced stock borrow/stock loan activity. Liquid assets accounted
for 97% of total assets, consistent with year-end levels. The
Company satisfies its need for funds from its own cash resources,
internally-generated funds, subordinated borrowings,
collateralized borrowings consisting primarily of bank loans, and
uncommitted lines of credit. The amount of Fahnestock's bank
borrowings fluctuates in response to changes in the level of the
Company's securities inventories and customer margin debt as well
as changes in stock loan balances. Fahnestock has arrangements
with banks for borrowings on a fully collateralized as well as
unsecured basis. At September 30, 2001, $5,383,000 of such
borrowings were outstanding, a decrease of 79% compared to
outstanding borrowings at December 31, 2000. At September 30,
2001 the Company had available collateralized and
uncollateralized letters of credit of $26,500,000.</p>

<p>Management believes that funds from operations, combined with
Fahnestock's capital base and available credit facilities, are
sufficient for the Company's liquidity needs in the foreseeable
future.</p>

<p>On February 23, 2001, May 18, 2001 and August 17, 2001, the
Company paid cash dividends of $0.09 per Class A non-voting and
Class B share totaling $3,327,000 from available cash on hand.</p>

<p>On October 18, 2001, the Board of Directors declared a regular
quarterly cash dividend of U.S.$0.09 per Class A non-voting and
Class B share payable on November 16, 2001 to shareholders of
record on November 2, 2001.</p>

<p>The book value of the Company&#146;s Class A non-voting and
Class B shares was $19.31 at September 30, 2001 compared to
$17.78 at September 30, 2000, based on total outstanding shares
of 12,403,350 and 12,082,149, respectively.</p>

<p>&nbsp;</p>

<p>Factors Affecting &quot;Forward-Looking Statements&quot;</p>

<p>This report on Form 10-Q contains &quot;forward-looking
statements&quot; within the meaning of Section 27A of the
Securities Act of 1933, as amended ( the &quot;Act&quot;), and
Section 21E of the Exchange Act. These forward-looking statements
relate to anticipated financial performance, future revenues or
earnings, business prospects and anticipated market performance
of the Company. The Private Securities Litigation Reform Act of
1995 provides a safe harbor for forward-looking statements. In
order to comply with the terms of the safe harbor, the Company
cautions readers that a variety of factors could cause the
Company&#146;s actual results to differ materially from the
anticipated results or other expectations expressed in the
Company&#146;s forward-looking statements. These risks and
uncertainties, many of which are beyond the Company&#146;s
control, include, but are not limited to: (i) transaction volume
in the securities markets, (ii) the volatility of the securities
markets, (iii) fluctuations in interest rates, (iv) changes in
regulatory requirements which could affect the cost and manner of
doing business, (v) fluctuations in currency rates, (vi) general
economic conditions, both domestic and international, (vii)
changes in the rate of inflation and the related impact on the
securities markets, (viii) competition from existing financial
institutions and other new participants in the securities
markets, (ix) legal developments affecting the litigation
experience of the securities industry, and (x) changes in federal
and state tax laws which could affect the popularity of products
sold by the Company. There can be no assurance that the Company
has correctly or completely identified and assessed all of the
factors affecting the Company&#146;s business. The Company does
not undertake any obligation to publicly update or revise any
forward-looking statements.</p>

<p>&nbsp;</p>

<p>ITEM 3. Quantitative and Qualitative Disclosures About Market
Risk</p>

<p>Risk Management</p>

<p>The Company&#146;s principal business activities by their
nature involve significant market and credit risks. The
Company&#146;s effectiveness in managing these risks is critical
to its success and stability. </p>

<p>As part of its normal business operations, the Company engages
in the trading of both fixed income and equity securities in both
a proprietary and market-making capacity. The Company makes
markets in over-the-counter equities in order to facilitate order
flow and accommodate its institutional and retail customers. The
Company also makes markets in municipal bonds, mortgage-backed
securities, government bonds and high yield bonds.</p>

<p>Market risk generally means the risk of loss that may result
from the potential change in the value of a financial instrument
as a result of fluctuations in interest and currency exchange
rates and in equity and commodity prices. Market risk is inherent
in all types of financial instruments, including both derivatives
and non-derivatives. The Company&#146;s exposure to market risk
arises from its role as a financial intermediary for its
customers&#146; transactions and from its proprietary trading and
arbitrage activities. </p>

<p>In addition, the Company&#146;s activities expose it to
operational risk, legal risk and funding risk. Operational risk
generally means the risk of loss resulting from improper
processing of transactions or deficiencies in the Company&#146;s
operating systems or internal controls. With respect to its
trading activities, the Company has procedures designed to ensure
that all transactions are accurately recorded and properly
reflected on the Company&#146;s books on a timely basis. With
respect to client activities, the Company operates a system of
internal controls designed to ensure that transactions and other
account activity (new account solicitation, transaction
authorization, transaction processing, billing and collection)
are properly approved, processed, recorded and reconciled. Legal
risk generally includes the risk of non-compliance with legal and
regulatory requirements and the risk that a counterparty&#146;s
obligations are unenforceable. The Company is subject to
extensive regulation in the various jurisdictions in which it
conducts its business. Through its legal advisors and its
compliance department, the Company has established routines to
ensure compliance with regulatory capital requirements, sales and
trading practices, new products, use and safekeeping of customer
securities and funds, granting of credit, collection activities,
and record keeping. The Company has procedures designed to assess
and monitor counterparty credit risk. </p>

<p>Value-at-Risk </p>

<p>Value-at-risk is a statistical measure of the potential loss
in the fair value of a portfolio due to adverse movements in
underlying risk factors. In response to the SEC&#146;s market
risk disclosure requirements, the Company has performed a
value-at-risk analysis of its trading financial instruments and
derivatives. The value -at-risk calculation uses standard
statistical techniques to measure the potential loss in fair
value based upon a one-day holding period and a 95% confidence
level. The calculation is based upon a variance-covariance
methodology, which assumes a normal distribution of changes in
portfolio value. The forecasts of variances and co-variances used
to construct the model for the market factors relevant to the
portfolio were generated from historical data. Although
value-at-risk models are sophisticated tools, their use can be
limited as historical data is not always an accurate predictor of
future conditions. The Company attempts to manage its market
exposure using other methods, including trading authorization and
concentration limits.</p>

<p>At September 30, 2001 and 2000, the Company&#146;s
value-at-risk for each component of market risk was as follows:</p>
<div align="center"><center>

<table border="0" cellpadding="0" cellspacing="0" width="95%">
    <tr>
        <td width="70%">&nbsp;</td>
        <td colspan="2" width="30%"><p align="center">September
        30,</p>
        </td>
    </tr>
    <tr>
        <td width="70%"><i>Expressed in thousands of U.S. dollars</i></td>
        <td width="13%"><p align="right"><u>2001</u></p>
        </td>
        <td width="17%"><p align="right"><u>2000</u></p>
        </td>
    </tr>
    <tr>
        <td width="70%">&nbsp;</td>
        <td width="13%">&nbsp;</td>
        <td width="17%">&nbsp;</td>
    </tr>
    <tr>
        <td width="70%">Interest rate risk</td>
        <td width="13%"><p align="right">$148</p>
        </td>
        <td width="17%"><p align="right">$105</p>
        </td>
    </tr>
    <tr>
        <td width="70%">Equity price risk</td>
        <td width="13%"><p align="right">193</p>
        </td>
        <td width="17%"><p align="right">492</p>
        </td>
    </tr>
    <tr>
        <td width="70%">Diversification benefit</td>
        <td width="13%"><p align="right">(67)</p>
        </td>
        <td width="17%"><p align="right">(310)</p>
        </td>
    </tr>
    <tr>
        <td width="70%">&nbsp;</td>
        <td width="13%">&nbsp;</td>
        <td width="17%">&nbsp;</td>
    </tr>
    <tr>
        <td width="70%">Total</td>
        <td width="13%"><p align="right">$274</p>
        </td>
        <td width="17%"><p align="right">$287</p>
        </td>
    </tr>
</table>
</center></div>

<p>The potential future loss presented by the total value-at-risk
generally falls within predetermined levels of loss that should
not be material to the Company&#146;s results of operations,
financial condition or cash flows. The changes in the
value-at-risk amounts reported as at September 30, 2001 compared
to those reported as at September 30, 2000 reflect reductions in
the size and changes in the composition of the Company&#146;s
trading portfolio. The weighting of the portfolio at September
30, 2001 shifted towards debt and away from equities compared to
the relative portfolio composition for the comparable period in
2000. From time to time the Company modifies its risk exposure
with hedging positions and this affects the diversification
benefit in the value-at-risk calculation.</p>

<p>The value-at-risk estimate has limitations that should be
considered in evaluating the Company&#146;s potential future
losses based on the period-end portfolio positions. Recent market
conditions, including increased volatility, may result in
statistical relationships that result in higher value-at-risk
than would be estimated from the same portfolio under different
market conditions, or the converse may be true. Critical risk
management strategy involves the active management of portfolio
levels to reduce market risk. The Company&#146;s market risk
exposure is continuously monitored as the portfolio risks and
market conditions change.</p>

<p>&nbsp;</p>

<p>PART II OTHER INFORMATION</p>

<p>ITEM 1. Legal Proceedings</p>

<blockquote>
    <p>The Company's subsidiaries are parties to legal
    proceedings incidental to<br>
    their respective businesses. In management's opinion, there
    are no legal<br>
    proceedings to which the Company or its subsidiaries are
    parties or to<br>
    which any of their respective properties are subject which
    are material to<br>
    the Company's financial position. The potential significance
    of legal<br>
    matters on the Company's future operating results depends on
    the level of<br>
    future results of operations as well as the timing and
    ultimate outcome of<br>
    such legal matters.<br>
    </p>
</blockquote>

<p>ITEM 2. Changes in Securities and Use of Proceeds</p>

<p>Not applicable</p>

<p>ITEM 3. Defaults Upon Senior Securities</p>

<p>Not applicable</p>

<p>ITEM 4. Submission of Matters to a Vote of Security-Holders</p>

<p>None</p>

<p>ITEM 5. Other Information</p>

<p>None</p>

<p>ITEM 6. Exhibits and Reports on Form 8-K</p>

<blockquote>
    <p>(a) Exhibits - None</p>
</blockquote>

<blockquote>
    <p>(b) Reports on Form 8-K - None</p>
</blockquote>

<p>&nbsp;</p>

<p align="center"><b>SIGNATURES</b></p>

<p>Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized, in the
City of Toronto, Ontario, Canada on the 30th day of October,
2001.</p>

<p>FAHNESTOCK VINER HOLDINGS INC.</p>

<p>By: &quot;A.G. Lowenthal&quot;<br>
A.G.Lowenthal, Chairman <br>
(Principal Financial Officer)</p>

<p>By: &quot;E.K. Roberts&quot;<br>
E.K.Roberts, President<br>
(Duly Authorized Officer) </p>
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</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
