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<SEC-DOCUMENT>0000791963-03-000017.txt : 20030812
<SEC-HEADER>0000791963-03-000017.hdr.sgml : 20030812
<ACCEPTANCE-DATETIME>20030812105705
ACCESSION NUMBER:		0000791963-03-000017
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20030630
FILED AS OF DATE:		20030812

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:		03836313

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

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

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VINER E A HOLDINGS LTD
		DATE OF NAME CHANGE:	19880622

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GOLDALE INVESTMENTS LTD
		DATE OF NAME CHANGE:	19861030
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>sec603.htm
<TEXT>
<!DOCTYPE HTML PUBLIC "-//IETF//DTD HTML//EN">
<html>


<body bgcolor="#FFFFFF" link="#0000FF" vlink="#7F007F">

<p align="center"><font size="3"><b>UNITED STATES</b></font></p>

<p align="center"><font size="3"><b>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">[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE </font></p>

<p><font size="3">SECURITIES EXCHANGE ACT OF 1934 </font></p>

<p><font size="3">For the Quarterly Period ended <b>June 30, 2003</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</font></p>

<p><font size="3">SECURITIES EXCHANGE ACT OF 1934 </font></p>

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

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

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

<p align="center"><font size="3"><b>FAHNESTOCK VINER HOLDINGS
INC.</b></font></p>

<p align="center"><font size="3">(Exact name of registrant as
specified in its charter)</font></p>

<p><font size="3">Ontario, Canada 98-0080034</font></p>

<p><font size="3">(State or other jurisdiction of (I.R.S.
Employer</font></p>

<p><font size="3">incorporation or organization) Identification
No.)</font></p>

<p align="center"><font size="3">P.O. Box 2015, Suite 1110</font></p>

<p align="center"><font size="3">20 Eglinton Avenue West</font></p>

<p align="center"><font size="3">Toronto, Ontario, Canada M4R 1K8</font></p>

<p align="center"><font size="3">(Address of principal executive
offices)</font></p>

<p align="center"><font size="3">(Zip Code)</font></p>

<p align="center"><font size="3">416-322-1515</font></p>

<p align="center"><font size="3">(Registrant&#146;s telephone
number, including area code)</font></p>

<p align="center"><font size="3">Not applicable</font></p>

<p align="center"><font size="3">(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">Indicate by check mark whether the registrant
is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes [X] No [ ]</font></p>

<p><font size="3">The number of shares of the Company&#146;s
Class A non-voting shares and Class B voting shares (being the
only classes of common stock of the Company) outstanding on
August 6, 2003 was 12,729,918 and 99,680 shares, respectively.</font></p>

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

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

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

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

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

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

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

<p><font size="3" face="Helvetica">Condensed Consolidated Balance
Sheets as of June 30, 2003 and December 31, 2002</font></p>

<p><font size="3" face="Helvetica">Condensed Consolidated
Statements of Operations for the three and six months ended June
30, 2003 and 2002 </font></p>

<p><font size="3" face="Helvetica">Condensed Consolidated
Statements of Cash Flows for the three and six months ended June
30, 2003 and 2002 </font></p>

<p><font size="3" face="Helvetica">Condensed Consolidated
Statements of Changes in Shareholders&#146; Equity for the three
and six months ended June 30, 2003 and 2002</font></p>

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

<p><font size="3" face="Helvetica">Item 2. Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations</font></p>

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

<p><font size="3" face="Helvetica">Item 4. Controls and
Procedures </font></p>

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

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

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

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

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

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

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

<p><font size="3" face="Helvetica">SIGNATURES </font></p>

<p align="center"><font size="3" face="Helvetica"><b>PART 1 </b></font></p>

<p align="center"><font size="3" face="Helvetica"><b>FINANCIAL
INFORMATION</b></font></p>

<p><font size="3" face="Helvetica"><b>Item. 1 Financial
Statements </b></font></p>

<table border="0" cellpadding="0" width="602">
    <tr>
        <td valign="top" colspan="3" height="21"><p
        align="center"><font face="Helvetica">FAHNESTOCK VINER
        HOLDINGS INC.</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="3" height="21"><p
        align="center"><font face="Helvetica">CONDENSED
        CONSOLIDATED BALANCE SHEETS (unaudited)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21"><p
        align="center"><font size="2" face="Helvetica">June 30,</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p
        align="center"><font size="2" face="Helvetica">December
        31,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="22">&nbsp;</td>
        <td valign="top" width="18%" height="22"><p
        align="center"><font face="Helvetica">2003 </font></p>
        </td>
        <td valign="top" width="15%" height="22"><p
        align="center"><font face="Helvetica">2002</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="22"><font size="2"
        face="Helvetica"><i>Expressed in thousands of U.S.
        dollars</i></font></td>
        <td valign="top" width="18%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">ASSETS</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Current assets</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Cash and cash equivalents</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">$34,984</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">$16,115 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Restricted deposits</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">10,778</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">7,440 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Deposits with clearing organizations</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">10,651</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">3,606 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Receivable from brokers and clearing
        organizations</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">646,277</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">492,094 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Receivable from customers</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">943,772</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">392,929 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Securities owned including amounts
        pledged of $2,167</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">($1,078 in 2002), at market value</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">92,443</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">50,173 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Notes receivable</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">94,118</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">17,011</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Other</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">54,652</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">28,419 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">1,887,675</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">1,007,787</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Other assets</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="25"><font
        face="Helvetica">Stock exchange seats (approximate market
        value</font></td>
        <td valign="top" width="18%" height="25">&nbsp;</td>
        <td valign="top" width="15%" height="25">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">$5,198; $6,716 in 2002)</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">2,994</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">2,994</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Fixed assets, net of accumulated
        depreciation of</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">$27,333; $23,367 in 2002</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">21,292</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">8,488</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Intangible assets, net of amortization</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">36,225</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21"><font
        face="Helvetica">Goodwill</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">137,889</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">11,957</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">198,400</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">23,439</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="66%" height="22">&nbsp;</td>
        <td valign="top" width="18%" height="22"><p align="right"><font
        face="Helvetica">$2,086,075</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helvetica">$1,031,226 </font></p>
        </td>
    </tr>
</table>

<p><font size="2" face="Helvetica">The accompanying notes are an
integral part of these condensed consolidated financial
statements.</font></p>

<p><font face="Helvetica"></font>&nbsp;</p>

<table border="0" cellpadding="0" width="602">
    <tr>
        <td valign="top" colspan="3" height="23"><p
        align="center"><font face="Helvetica">FAHNESTOCK VINER
        HOLDINGS INC.</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="3" height="22"><p
        align="center"><font face="Helvetica">CONDENSED
        CONSOLIDATED BALANCE SHEETS (unaudited)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="22">&nbsp;</td>
        <td valign="top" width="18%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="22">&nbsp;</td>
        <td valign="top" width="18%" height="22"><p
        align="center"><font size="2" face="Helvetica">June 30,</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p
        align="center"><font size="2" face="Helvetica">December
        31,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="22">&nbsp;</td>
        <td valign="top" width="18%" height="22"><p
        align="center"><font face="Helvetica">2003 </font></p>
        </td>
        <td valign="top" width="15%" height="22"><p
        align="center"><font face="Helvetica">2002</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="22"><font size="2"
        face="Helvetica"><i>Expressed in thousands of U.S.
        dollars</i></font></td>
        <td valign="top" width="18%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">LIABILITIES AND SHAREHOLDERS' EQUITY</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Current liabilities</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Drafts payable</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">$59,817</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">$21,653</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Bank call loans</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">178,194</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">16,200</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Payable to brokers and clearing
        organizations</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">644,203</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">520,743</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Payable to customers</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">583,522</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">162,343</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Securities sold, but not yet purchased,
        at market value</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">12,884</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">9,606</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Accounts payable and other liabilities</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">101,394</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">50,745</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Income taxes payable</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">5,445</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">2,057</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Current portion of long term debt</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">14,690</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">1,600,149</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">783,347</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Long term liabilities</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Bank loans payable</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">12,024</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Long term debt</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">204,301</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Deferred income taxes</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">2,464</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">243</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">218,789</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">243</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">1,818,938</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">783,590</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Shareholders' equity</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Share capital</font></td>
        <td valign="top" width="18%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="22"><font
        face="Helvetica">12,721,563 Class A non-voting shares</font></td>
        <td valign="top" width="18%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="20"><font
        face="Helvetica">(2002 - 12,397,007 shares)</font></td>
        <td valign="top" width="18%" height="20"><p align="right"><font
        face="Helvetica">39,978</font></p>
        </td>
        <td valign="top" width="15%" height="20"><p align="right"><font
        face="Helvetica">34,338</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">99,680 Class B voting shares</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">133</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">133</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21">&nbsp;</td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">40,111</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">34,471</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="21"><font
        face="Helvetica">Contributed capital</font></td>
        <td valign="top" width="18%" height="21"><p align="right"><font
        face="Helvetica">5,783</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helvetica">5,028</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="22"><font
        face="Helvetica">Retained earnings</font></td>
        <td valign="top" width="18%" height="22"><p align="right"><font
        face="Helvetica">221,243</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helvetica">208,137</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="22">&nbsp;</td>
        <td valign="top" width="18%" height="22"><p align="right"><font
        face="Helvetica">267,137</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helvetica">247,636</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="22">&nbsp;</td>
        <td valign="top" width="18%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="67%" height="23">&nbsp;</td>
        <td valign="top" width="18%" height="23"><p align="right"><font
        face="Helvetica">$2,086,075</font></p>
        </td>
        <td valign="top" width="15%" height="23"><p align="right"><font
        face="Helvetica">$1,031,226 </font></p>
        </td>
    </tr>
</table>

<p><font size="2" face="Helvetica">The accompanying notes are an
integral part of these condensed consolidated financial
statements.</font></p>

<p>&nbsp;</p>

<table border="0" cellpadding="0" width="601">
    <tr>
        <td valign="top" colspan="5" height="21"><p
        align="center"><font face="Helv">FAHNESTOCK VINER
        HOLDINGS INC.</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5" height="21"><p
        align="center"><font face="Helv">CONDENSED CONSOLIDATED
        STATEMENTS OF OPERATIONS (unaudited)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21">&nbsp;</td>
        <td valign="top" colspan="2" width="29%" height="21"><p
        align="center"><font size="2" face="Helv">Three Months
        ended </font></p>
        <p align="center"><font size="2" face="Helv">June 30, </font></p>
        </td>
        <td valign="top" colspan="2" width="28%" height="21"><p
        align="center"><font size="2" face="Helv">Six Months
        ended </font></p>
        <p align="center"><font size="2" face="Helv">June 30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22"><p
        align="center"><font size="2" face="Helv">2003</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p
        align="center"><font size="2" face="Helv">2002</font></p>
        </td>
        <td valign="top" width="13%" height="22"><p
        align="center"><font size="2" face="Helv">2003</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p
        align="center"><font size="2" face="Helv">2002 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5" height="22"><font size="2"
        face="Helv">Expressed in thousands of U.S. dollars,
        except per share amounts</font></td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">REVENUE:</font></td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Commissions</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$78,830</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">$33,904 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">$147,154</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$68,890 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Principal transactions, net</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">40,109</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">11,891 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">66,207</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">25,540 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Interest</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">10,547</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">6,953 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">21,166</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">13,595 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Underwriting fees</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">12,534</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">5,786 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">27,395</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">10,535 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Advisory fees</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">14,571</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">5,971 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">29,760</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">13,454 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Arbitration award</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">-</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">-</font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">21,750</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Other</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">7,806</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">3,639 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">11,816</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">6,647 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">164,397</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">68,144 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">325,248</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">138,661 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">EXPENSES:</font></td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Compensation and related </font></td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">expenses</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">101,467</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">40,525 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">198,963</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">84,390 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Clearing and exchange fees</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">5,740</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">2,283 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">12,722</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">4,273 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Communications</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">16,010</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">8,961 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">27,782</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">16,909 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Occupancy costs</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">10,815</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">5,779 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">21,269</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">11,819 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Interest</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">4,331</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">1,871 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">7,492</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">3,817 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Other</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">12,433</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">6,813 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">30,522</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">12,935 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">150,796</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">66,232 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">298,750</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">134,143 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Profit before income taxes</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">13,601</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">1,912 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">26,498</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">4,518 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Income tax provision</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">5,682</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">1,029 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">11,092</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">2,003 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Profit before cumulative effect of a change
        in accounting principle</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">7,919</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">883</font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">15,406</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">2,515</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="22"><font
        face="Helv">Cumulative effect of a change in accounting
        principle</font></td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">-</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p align="right"><font
        face="Helv">-</font></p>
        </td>
        <td valign="top" width="13%" height="22"><p align="right"><font
        face="Helv">-</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">1,774</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="22"><font
        face="Helv">NET PROFIT FOR PERIOD</font></td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">$7,919</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p align="right"><font
        face="Helv">$883 </font></p>
        </td>
        <td valign="top" width="13%" height="22"><p align="right"><font
        face="Helv">$15,406</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">$4,289 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
        <td valign="top" width="14%" height="22">&nbsp;</td>
        <td valign="top" width="13%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="22"><font
        face="Helv">Basic earnings per share (note 3)</font></td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">$0.62</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p align="right"><font
        face="Helv">$0.07 </font></p>
        </td>
        <td valign="top" width="13%" height="22"><p align="right"><font
        face="Helv">$1.21</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">$0.34 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="22"><font
        face="Helv">- Operations</font></td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">$0.62</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p align="right"><font
        face="Helv">$0.07</font></p>
        </td>
        <td valign="top" width="13%" height="22"><p align="right"><font
        face="Helv">$1.21</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">$0.20</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="22"><font
        face="Helv">- Cumulative effect of a change in accounting
        principle</font></td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">-</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p align="right"><font
        face="Helv">-</font></p>
        </td>
        <td valign="top" width="13%" height="22"><p align="right"><font
        face="Helv">-</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">$0.14</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Diluted earnings per share</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$0.43</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">$0.07 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">$0.84</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$0.33 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%" height="21"><font
        face="Helv">Dividends declared per share</font></td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$0.09</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">$0.09</font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">$0.18</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$0.18</font></p>
        </td>
    </tr>
</table>

<p><font size="2" face="Helvetica">The accompanying notes are an
integral part of these condensed consolidated financial
statements.</font></p>

<p><font size="2" face="Helvetica"></font>&nbsp;</p>

<table border="0" cellpadding="0" width="601">
    <tr>
        <td valign="top" colspan="5" height="21"><p
        align="center"><font size="2" face="Helv">FAHNESTOCK
        VINER HOLDINGS INC.</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5" height="21"><p
        align="center"><font size="2" face="Helv">CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21">&nbsp;</td>
        <td valign="top" colspan="2" width="23%" height="21"><p
        align="center"><font size="2" face="Helv">Three Months
        ended </font></p>
        <p align="center"><font size="2" face="Helv">June 30, </font></p>
        </td>
        <td valign="top" colspan="2" width="23%" height="21"><p
        align="center"><font size="2" face="Helv">Six Months
        ended </font></p>
        <p align="center"><font size="2" face="Helv">June 30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="22">&nbsp;</td>
        <td valign="top" width="11%" height="22"><p
        align="center"><font size="2" face="Helv">2003</font></p>
        </td>
        <td valign="top" width="12%" height="22"><p
        align="center"><font size="2" face="Helv">2002</font></p>
        </td>
        <td valign="top" width="11%" height="22"><p
        align="center"><font size="2" face="Helv">2003</font></p>
        </td>
        <td valign="top" width="12%" height="22"><p
        align="center"><font size="2" face="Helv">2002 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5" height="22"><font size="2"
        face="Helv">Expressed in thousands of U.S. dollars</font></td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Cash flows from operating activities:</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Net profit for the period</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">$7,919</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">$883</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">$15,406</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">$4,289</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Adjustments to reconcile net profit to net
        cash provided </font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">by (used in) operating activities:</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Non-cash items included in net profit:</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Depreciation and amortization</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">2,075</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">1,453</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">4,341</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">2,522</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Write off of unamortized negative goodwill</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(1,774)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Deferred tax liability</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">1,111</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">2,464</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Tax benefit from employee stock options
        exercised</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">95</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">93</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">755</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">608</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Decrease (increase) in operating assets,</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">net of the effect of acquisitions:</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Restricted deposits</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(2,033)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(200)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(3,338)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">12</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Deposits with clearing organizations</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(5,554)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(1,354)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(7,045)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">2,522</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Receivable from brokers and clearing</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">organizations</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(347,154)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(115,013)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(154,183)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(94,474)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Receivable from customers</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(549,080)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">50,742</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(550,843)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">24,296</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Securities owned</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(26,805)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">1,637</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(29,487)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">4,318</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Notes receivable</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">5,050</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(872)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(11,594)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(3,521)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Other assets</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(9,929)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">4,666</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(18,960)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(2,243)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Increase (decrease) in operating</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">liabilities, net of the effect of
        acquisitions:</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Drafts payable</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">34,001</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">1,626</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">38,164</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">955</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Payable to brokers and clearing organizations</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">362,159</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">94,364</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">123,460</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">107,844</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="22"><font size="2"
        face="Helv">Payable to customers</font></td>
        <td valign="top" width="11%" height="22"><p align="right"><font
        size="2" face="Helv">427,345</font></p>
        </td>
        <td valign="top" width="12%" height="22"><p align="right"><font
        size="2" face="Helv">(15,481)</font></p>
        </td>
        <td valign="top" width="11%" height="22"><p align="right"><font
        size="2" face="Helv">421,179</font></p>
        </td>
        <td valign="top" width="12%" height="22"><p align="right"><font
        size="2" face="Helv">(52,146)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Securities sold, but not yet purchased</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">682</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">573</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">3,278</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(1,026)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Accounts payable and other liabilities</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(259)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(6,832)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">33,674</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(8,326)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Income taxes payable</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">2,187</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">80</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">3,388</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(189)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><p align="right"><font
        size="2" face="Helv">Cash (used in) provided by operating
        activities</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(98,190)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">16,365</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(129,341)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(16,333)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Cash flows from investing activities:</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Purchase of the business of Oppenheimer &amp;
        Co.</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(4,031)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(16,690)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Purchase of the business of BUYandHOLD</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(2,297)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Purchase of fixed assets</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(4,635)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(321)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(5,113)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(907)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><p align="right"><font
        size="2" face="Helv">Cash used in investing activities</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(8,666)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(321)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(21,803)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(3,204)</font></p>
        </td>
    </tr>
</table>

<p>&nbsp;</p>

<table border="0" cellpadding="0" width="601">
    <tr>
        <td valign="top" colspan="5" height="21"><p
        align="center"><font size="2" face="Helv">FAHNESTOCK
        VINER HOLDINGS INC.</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5" height="21"><p
        align="center"><font size="2" face="Helv">CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21">&nbsp;</td>
        <td valign="top" colspan="2" width="23%" height="21"><p
        align="center"><font size="2" face="Helv">Three Months
        ended</font></p>
        <p align="center"><font size="2" face="Helv">June 30,</font></p>
        </td>
        <td valign="top" colspan="2" width="23%" height="21"><p
        align="center"><font size="2" face="Helv">Six Months
        ended</font></p>
        <p align="center"><font size="2" face="Helv">June 30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21"><p
        align="center"><font size="2" face="Helv">2003</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p
        align="center"><font size="2" face="Helv">2002</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p
        align="center"><font size="2" face="Helv">2003</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p
        align="center"><font size="2" face="Helv">2002 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Cash flows from financing activities:</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Cash dividends paid on Class A non-voting</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">and Class B shares</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(1,151)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(1,132)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(2,300)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(2,261)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Issuance of Class A non-voting shares</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">647</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">390</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">6,225</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">2,645</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Repurchase of Class A non-voting shares</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">for cancellation</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(132)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(1,834)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(585)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(1,834)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Zero coupon promissory note repayments</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(5,023)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(7,345)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Proceeds from issuance of bank loans</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">25,000</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Bank loan repayments</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(2,024)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">(2,857)</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Increase in bank call loans</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">129,175</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(16,139)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">151,875</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">20,008</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><p align="right"><font
        size="2" face="Helv">Cash provided by (used in) financing
        activities</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">121,492</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(18,715)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">170,013</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">18,558</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Net increase (decrease) in cash and cash
        equivalents</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">14,636</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(2,671)</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">18,869</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">(979)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Cash and cash equivalents, beginning of
        period</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">20,348</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">25,909</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">16,115</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">24,217</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helv">Cash and cash equivalents, end of period</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">$34,984</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">$23,238</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">$34,984</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">$23,238</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helvetica">Supplemental Disclosure of cash flow
        information:</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helvetica">Cash paid for:</font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helvetica">Interest</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">$2,394</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">$1,891</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">$3,507</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">$3,929</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helvetica">Income taxes</font></td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">$2,314</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">$905</font></p>
        </td>
        <td valign="top" width="11%" height="21"><p align="right"><font
        size="2" face="Helv">$2,338</font></p>
        </td>
        <td valign="top" width="12%" height="21"><p align="right"><font
        size="2" face="Helv">$4,524</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%" height="21"><font size="2"
        face="Helvetica">Non-cash acquisition activity (see note
        11) </font></td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
        <td valign="top" width="11%" height="21">&nbsp;</td>
        <td valign="top" width="12%" height="21">&nbsp;</td>
    </tr>
</table>

<p>&nbsp;</p>

<p><font size="1" face="Helvetica"></font>&nbsp;</p>

<p><font size="1" face="Helvetica"></font>&nbsp;</p>

<p><font size="1" face="Helvetica"></font>&nbsp;</p>

<p><font size="1" face="Helvetica"></font>&nbsp;</p>

<pre><font face="Helvetica">The accompanying notes are an integral part of these condensed consolidated financial statements.</font></pre>

<p>&nbsp;</p>

<p>&nbsp;</p>

<table border="0" cellpadding="0" width="619">
    <tr>
        <td valign="top" colspan="5" height="21"><p
        align="center"><font face="Helv">FAHNESTOCK VINER
        HOLDINGS INC.</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5" height="21"><p
        align="center"><font face="Helv">CONDENSED CONSOLIDATED
        STATEMENTS OF </font></p>
        <p align="center"><font face="Helv">CHANGES IN
        SHAREHOLDERS&#146; EQUITY (unaudited)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21">&nbsp;</td>
        <td valign="top" colspan="2" width="30%" height="21"><p
        align="center"><font face="Helv">Three Months ended </font></p>
        <p align="center"><font face="Helv">June 30,</font></p>
        </td>
        <td valign="top" colspan="2" width="26%" height="21"><p
        align="center"><font face="Helv">Six Months ended</font></p>
        <p align="center"><font face="Helv">June 30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="22">&nbsp;</td>
        <td valign="top" width="16%" height="22"><p align="right"><font
        face="Helv">2003</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">2002 </font></p>
        </td>
        <td valign="top" width="13%" height="22"><p align="right"><font
        face="Helv">2003</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p align="right"><font
        face="Helv">2002 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="2" width="59%" height="21"><font
        size="2" face="Helv">Expressed in thousands of U.S.
        dollars</font></td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv"><b>Share capital</b></font></td>
        <td valign="top" width="16%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv">Balance at beginning of period</font></td>
        <td valign="top" width="16%" height="21"><p align="right"><font
        face="Helv">$39,596</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$36,512 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">34,471</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">$34,257 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv">Issue of Class A non-voting shares</font></td>
        <td valign="top" width="16%" height="21"><p align="right"><font
        face="Helv">647</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">390 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">6,225</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">2,645 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="22"><font
        face="Helv">Repurchase of Class A non-voting shares for
        cancellation</font></td>
        <td valign="top" width="16%" height="22"><p align="right"><font
        face="Helv">(132)</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">(1,834)</font></p>
        </td>
        <td valign="top" width="13%" height="22"><p align="right"><font
        face="Helv">(585)</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p align="right"><font
        face="Helv">(1,834)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="23"><font
        face="Helv">Balance at end of period</font></td>
        <td valign="top" width="16%" height="23"><p align="right"><font
        face="Helv">$40,111</font></p>
        </td>
        <td valign="top" width="15%" height="23"><p align="right"><font
        face="Helv">$35,068 </font></p>
        </td>
        <td valign="top" width="13%" height="23"><p align="right"><font
        face="Helv">$40,111</font></p>
        </td>
        <td valign="top" width="14%" height="23"><p align="right"><font
        face="Helv">$35,068 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="22">&nbsp;</td>
        <td valign="top" width="16%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
        <td valign="top" width="13%" height="22">&nbsp;</td>
        <td valign="top" width="14%" height="22">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21">&nbsp;</td>
        <td valign="top" width="16%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv"><b>Contributed capital</b></font></td>
        <td valign="top" width="16%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv">Balance at beginning of period</font></td>
        <td valign="top" width="16%" height="21"><p align="right"><font
        face="Helv">$5,688</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$4,628 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">$5,028</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">$4,113 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv">Tax benefit from employee stock options
        exercised</font></td>
        <td valign="top" width="16%" height="21"><p align="right"><font
        face="Helv">95</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">93 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">755</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">608 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="22"><font
        face="Helv">Balance at end of period</font></td>
        <td valign="top" width="16%" height="22"><p align="right"><font
        face="Helv">$5,783</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">$4,721 </font></p>
        </td>
        <td valign="top" width="13%" height="22"><p align="right"><font
        face="Helv">$5,783</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p align="right"><font
        face="Helv">$4,721 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="22">&nbsp;</td>
        <td valign="top" width="16%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
        <td valign="top" width="13%" height="22">&nbsp;</td>
        <td valign="top" width="14%" height="22">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv"><b>Retained earnings</b></font></td>
        <td valign="top" width="16%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv">Balance at beginning of period</font></td>
        <td valign="top" width="16%" height="21"><p align="right"><font
        face="Helv">$214,475</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$205,602 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">$208,137</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">$203,325 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv">Net profit for the period</font></td>
        <td valign="top" width="16%" height="21"><p align="right"><font
        face="Helv">7,919</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">883 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">15,406</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">4,289 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv">Dividends</font></td>
        <td valign="top" width="16%" height="21"><p align="right"><font
        face="Helv">(1,151)</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">(1,132)</font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">(2,300)</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">(2,261)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="22"><font
        face="Helv">Balance at end of period</font></td>
        <td valign="top" width="16%" height="22"><p align="right"><font
        face="Helv">$221,243</font></p>
        </td>
        <td valign="top" width="15%" height="22"><p align="right"><font
        face="Helv">$205,353 </font></p>
        </td>
        <td valign="top" width="13%" height="22"><p align="right"><font
        face="Helv">$221,243</font></p>
        </td>
        <td valign="top" width="14%" height="22"><p align="right"><font
        face="Helv">$205,353 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="22">&nbsp;</td>
        <td valign="top" width="16%" height="22">&nbsp;</td>
        <td valign="top" width="15%" height="22">&nbsp;</td>
        <td valign="top" width="13%" height="22">&nbsp;</td>
        <td valign="top" width="14%" height="22">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21"><font
        face="Helv">TOTAL SHAREHOLDERS' EQUITY</font></td>
        <td valign="top" width="16%" height="21"><p align="right"><font
        face="Helv">$267,137</font></p>
        </td>
        <td valign="top" width="15%" height="21"><p align="right"><font
        face="Helv">$245,142 </font></p>
        </td>
        <td valign="top" width="13%" height="21"><p align="right"><font
        face="Helv">$267,137</font></p>
        </td>
        <td valign="top" width="14%" height="21"><p align="right"><font
        face="Helv">$245,142 </font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="44%" height="21">&nbsp;</td>
        <td valign="top" width="16%" height="21">&nbsp;</td>
        <td valign="top" width="15%" height="21">&nbsp;</td>
        <td valign="top" width="13%" height="21">&nbsp;</td>
        <td valign="top" width="14%" height="21">&nbsp;</td>
    </tr>
</table>

<p><font size="2" face="Helvetica"></font>&nbsp;</p>

<p><font size="2" face="Helvetica"></font>&nbsp;</p>

<p><font size="2" face="Helvetica">The accompanying notes are an
integral part of these condensed consolidated financial
statements.</font></p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p align="center"><font face="Helvetica">FAHNESTOCK VINER
HOLDINGS INC.</font></p>

<p align="center"><font face="Helvetica">Notes to Condensed
Consolidated Financial Statements (Unaudited)</font></p>

<p><font face="Helvetica"><b>1. Summary of significant accounting
policies</b></font></p>

<p><font face="Helvetica">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 subsidiary of FVH is
Fahnestock &amp; Co. Inc. (&quot;Fahnestock&quot;), a registered
broker-dealer in securities. Fahnestock operates under its own
name and as the Oppenheimer &amp; Co. division of Fahnestock.
Fahnestock owns Freedom Investments, Inc., a registered broker
dealer in securities, which operates its BUYandHOLD division,
offering online discount brokerage and dollar-based investing
services. 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), research, market-making, and
investment advisory and asset management services. </font></p>

<p><font face="Helvetica">The Company&#146;s condensed
consolidated financial statements have been prepared in
accordance with accounting principles (GAAP) generally accepted
in the United States of America. These accounting principles are
set out in the notes to the Company&#146;s consolidated financial
statements for the year ended December 31, 2002 included in its
Annual Report on Form 10-K for the year ended December 31, 2002.
Disclosures reflected in these condensed consolidated financial
statements comply in all material respects with those required
pursuant to the rules and regulations of the United States
Securities and Exchange Commission (&quot;SEC&quot;) with respect
to quarterly financial reporting.</font></p>

<p><font face="Helvetica">The financial statements include all
adjustments, which in the opinion of management are normal and
recurring and necessary for a fair statement 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.</font></p>

<p><font face="Helvetica">Certain prior period amounts have been
reclassified to conform to the current year presentation.</font></p>

<p><font face="Helvetica">These condensed consolidated financial
statements are presented in U.S. dollars.</font></p>

<p><font face="Helvetica">The following is a summary of
significant accounting policies followed in the preparation of
these consolidated financial statements:</font></p>

<p><font face="Helvetica"><i>(a) Basis of consolidation</i></font></p>

<p><font face="Helvetica">The consolidated financial statements
include the accounts of the Company and all subsidiaries. The
major subsidiaries, wholly-owned and operated in the United
States of America, are as follows:</font></p>

<blockquote>
    <blockquote>
        <p><font face="Helvetica">Fahnestock &amp; Co. Inc.
        -broker/dealer in securities</font></p>
        <p><font face="Helvetica">Freedom Investments, Inc.
        -discount broker in securities</font></p>
    </blockquote>
</blockquote>

<p><font face="Helvetica">Significant intercompany balances and
transactions have been eliminated in the preparation of the
consolidated financial statements.</font></p>

<p><font face="Helvetica"><i>(b) Brokerage operations</i></font></p>

<p><font face="Helvetica">Transactions in proprietary securities
and related revenues and expenses are recorded on a trade date
basis. Customers&#146; securities and commodities transactions
are reported on a settlement date basis, which is generally three
business days after trade date. Related commission income and
expense is recorded on a trade date basis. Securities owned and
securities sold, but not yet purchased, are reported at market
value generally based upon quoted prices. Realized and unrealized
changes in market value are recognized in net trading revenues in
the year in which the change occurs. Other financial instruments
are carried at fair value or amounts that approximate fair value.</font></p>

<p><font face="Helvetica"><i>(c) Cash and cash equivalents</i></font></p>

<p><font face="Helvetica">The Company defines cash equivalents as
highly liquid investments with original maturities of less than
90 days that are not held for sale in the ordinary course of
business.</font></p>

<p><font face="Helvetica"><i>(d) Drafts payable</i></font></p>

<p><font face="Helvetica">Drafts payable represent amounts drawn
by the Company against a bank.</font></p>

<p><font face="Helvetica"><i>(e) Goodwill </i></font></p>

<p><font face="Helvetica">Goodwill arose upon the acquisitions of
Fahnestock, First of Michigan Capital Corporation, Josephthal
&amp; Co. Inc., Grand Charter Group Incorporated and the
Oppenheimer &amp; Co. division. Goodwill is subject to an annual
test for impairment to determine if the fair value of goodwill of
a reporting unit is less than its carrying amount. Goodwill
recorded as at December 31, 2002 has been tested for impairment
and no such impairment was recorded.</font></p>

<p><font face="Helvetica">(f) <i>Intangible Assets </i></font></p>

<p><font face="Helvetica">Intangible assets are comprised of
customer relationships and trademarks and trade names arising
upon the acquisition of the Oppenheimer &amp; Co. division.
Amortization of customer relationships is provided on a
straight-line basis over 80 months. The amortization expense
relating to intangible assets for each of the five succeeding
years approximates $750,000. Trademarks and trade names, which
are not amortized, are subject to an annual test for impairment
to determine if the fair value is less than its carrying amount.</font></p>

<p><font face="Helvetica"><i>(g) Property, plant and equipment</i></font></p>

<p><font face="Helvetica">Furniture, fixtures, proprietary
software and leasehold improvements and stock exchange seats are
stated at cost. Depreciation of furniture, fixtures and
proprietary software is provided on a straight-line basis
generally over three to seven years. Leasehold improvements are
amortized on a straight-line basis over the shorter of the life
of the asset or the life of the lease. </font></p>

<p><font face="Helvetica"><i>(h) Foreign currency translations</i></font></p>

<p><font face="Helvetica">Canadian currency balances have been
translated into U.S. dollars as follows: monetary assets and
liabilities at exchange rates prevailing at period end; revenue
and expenses at average rates for the period; and non-monetary
assets and share capital at historical rates.</font></p>

<p><font face="Helvetica"><i>(i) Income taxes</i></font></p>

<p><font face="Helvetica">The Company accounts for income taxes
in accordance with Statement of Financial Accounting Standards
No. 109, &quot;Accounting for Income Taxes&quot;. Deferred income
tax assets and liabilities arise from &quot;temporary
differences&quot; between the tax basis of an asset or liability
and its reported amount in the consolidated financial statements.
Deferred tax balances are determined by applying the enacted tax
rates.</font></p>

<p><font face="Helvetica"><i>(j)Securities lending activities</i></font></p>

<p><font face="Helvetica">Securities borrowed and securities
loaned are carried at the amounts of cash collateral advanced or
received.</font></p>

<p><font face="Helvetica">Securities borrowed transactions
require the Company to deposit cash or other collateral with the
lender. The Company receives cash or collateral in an amount
generally in excess of the market value of securities loaned.</font></p>

<p><font face="Helvetica">The Company monitors the market value
of securities borrowed and loaned on a daily basis and may
require counterparties to deposit additional collateral or return
collateral pledged, when appropriate.</font></p>

<p><font face="Helvetica">Included in receivable from brokers and
clearing organizations are deposits paid for securities borrowed
of $530,906,000 (as at December 31, 2002 - $480,938,000).
Included in payable to brokers and clearing organizations are
deposits received for securities loaned of $572,118,000 (as at
December 31, 2002 - $514,213,000).</font></p>

<p><font face="Helvetica"><i>(k) Resale and repurchase agreements</i></font></p>

<p><font face="Helvetica">Transactions involving purchases of
securities under agreements to resell (&quot;reverse repurchase
agreements&quot;) or sales of securities under agreements to
repurchase (&quot;repurchase agreements&quot;) are treated as
collateralized financing transactions and recorded at their
contractual resale or repurchase amounts plus accrued interest.</font></p>

<p><font face="Helvetica">The Company obtains possession of
collateral with a market value equal to or in excess of the
principal amount loaned under reverse repurchase agreements.
Collateral is valued daily and adjusted when appropriate.</font></p>

<p><font face="Helvetica">(l) <i>Revenues</i></font></p>

<p><font face="Helvetica">Investment banking fees are recorded on
offering date, sales concessions on settlement date and
underwriting fees at the time the transaction is substantially
completed and income is reasonably determinable. </font></p>

<p><font face="Helvetica">Asset management fees are generally
recognized over the period the related service is provided based
upon average net asset values. In certain circumstances, the firm
is entitled to receive incentive fees when the return on assets
under management exceeds certain benchmark returns or other
performance targets. Incentive fees are generally based on
investment performance over a 12-month period and are not subject
to adjustment once the measurement period ends. Accordingly,
incentive fees are recognized in the consolidated statements of
earnings when the measurement period ends. Asset management fees
and incentive fees are included in &quot;Advisory fees&quot; in
the consolidated statements of earnings</font><font size="2">.</font></p>

<p><font face="Helvetica"><i>(m) Interest expense</i></font></p>

<p><font face="Helvetica">Included in interest expense is
interest on bank loans, debt, payments in lieu of interest on
securities loaned and interest paid with respect to repurchase
agreements.</font></p>

<p><font face="Helvetica"><i>(n)</i> <i>Stock-based compensation
plans</i></font></p>

<p><font face="Helvetica">The Company has a stock-based
compensation plan. No compensation expense is recognized for this
plan when stock options are issued to employees as the options
are exercisable at the fair value at the date of grant. Any
consideration paid by employees on the exercise of stock options
or purchase of stock is credited to share capital.</font></p>

<p><font face="Helvetica"><b>2. Recent Accounting Pronouncements</b></font></p>

<p><font face="Helvetica">The Financial Accounting Standards
Board issued SFAS No. 146, &quot;Accounting for Costs Associated
with Exit or Disposal Activities&quot;, FIN No. 45,
&quot;Guarantor&#146;s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others&quot;, FIN No. 46, &quot;Consolidation of Variable
Interest Entities&quot;, SFAS No 149, &quot;Amendment of
Statement 133 on Derivative Instruments and Hedging
Activities&quot;, and SFAS No. 150, &quot;Accounting for Certain
Financial Instruments with Characteristics of both Liabilities
and Equity&quot;. The Company has reviewed these statements and
interpretations and does not expect their adoption to have a
material impact on its financial results. The Company has
reviewed SFAS No. 148, &quot;Accounting for Stock-Based
Compensation &#150; Transition and Disclosure&quot; and has
adopted the disclosure provisions, but does not intend to adopt
the other provisions of this standard in fiscal 2003.</font></p>

<p><font face="Helvetica"><b>3. Earnings per share</b></font></p>

<p><font face="Helvetica">Earnings per share was computed by
dividing net profit by the weighted average number of Class A
non-voting shares (&quot;Class A Shares&quot;) and Class B shares
(&quot;Class B Shares&quot;) outstanding. Diluted earnings per
share includes the weighted average Class A and Class B Shares
outstanding and the effects of exchangeable debentures using the
if converted method and Class A Share options using the treasury
stock method. </font></p>

<p><font face="Helvetica">Earnings per share has been calculated
as follows:</font></p>
<div align="center"><center>

<table border="0" cellpadding="0" width="546">
    <tr>
        <td valign="top" width="40%" height="16">&nbsp;</td>
        <td valign="top" colspan="2" width="31%" height="16"><p
        align="center"><font size="2" face="Helvetica">Three
        Months ended</font></p>
        <p align="center"><font size="2" face="Helvetica">June
        30,</font></p>
        </td>
        <td valign="top" colspan="2" width="30%" height="16"><p
        align="center"><font size="2" face="Helvetica">Six Months
        ended</font></p>
        <p align="center"><font size="2" face="Helvetica">June
        30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16">&nbsp;</td>
        <td valign="top" width="16%" height="16"><p
        align="center"><font size="2" face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p
        align="center"><font size="2" face="Helvetica">2002</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p
        align="center"><font size="2" face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p
        align="center"><font size="2" face="Helvetica">2002</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="43"><font size="2"
        face="Helvetica">Basic weighted average number of shares
        outstanding</font></td>
        <td valign="top" width="16%" height="43"><p align="right"><font
        size="2" face="Helvetica">12,803,430</font></p>
        </td>
        <td valign="top" width="14%" height="43"><p align="right"><font
        size="2" face="Helvetica">12,576,771</font></p>
        </td>
        <td valign="top" width="14%" height="43"><p align="right"><font
        size="2" face="Helvetica">12,717,516</font></p>
        </td>
        <td valign="top" width="15%" height="43"><p align="right"><font
        size="2" face="Helvetica">12,559,595</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16"><font size="2"
        face="Helvetica">Net effect, if converted method</font></td>
        <td valign="top" width="16%" height="16"><p align="right"><font
        size="2" face="Helvetica">6,932,000</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">6,932,000</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16"><font size="2"
        face="Helvetica">Net effect, treasury method</font></td>
        <td valign="top" width="16%" height="16"><p align="right"><font
        size="2" face="Helvetica">300,780</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">264,162</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">249,469</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p align="right"><font
        size="2" face="Helvetica">356,382</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="17"><font size="2"
        face="Helvetica">Diluted common shares (1)</font></td>
        <td valign="top" width="16%" height="17"><p align="right"><font
        size="2" face="Helvetica">20,036,210</font></p>
        </td>
        <td valign="top" width="14%" height="17"><p align="right"><font
        size="2" face="Helvetica">12,840,933</font></p>
        </td>
        <td valign="top" width="14%" height="17"><p align="right"><font
        size="2" face="Helvetica">19,898,985</font></p>
        </td>
        <td valign="top" width="15%" height="17"><p align="right"><font
        size="2" face="Helvetica">12,915,977</font></p>
        </td>
    </tr>
</table>
</center></div><div align="center"><center>

<table border="0" cellpadding="0" cellspacing="1" width="546"
bordercolor="#000000">
    <tr>
        <td valign="top" width="40%" height="16"><font size="2"
        face="Helvetica">Net profit for the period, as reported</font></td>
        <td valign="top" width="16%" height="16"><p align="right"><font
        size="2" face="Helvetica">$7,919,000</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$883,000</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$15,406,000</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p align="right"><font
        size="2" face="Helvetica">$4,289,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16"><font size="2"
        face="Helvetica">Effect of dilutive exchangeable
        debentures</font></td>
        <td valign="top" width="16%" height="16"><p align="right"><font
        size="2" face="Helvetica">661,000</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">1,360,000</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16"><font size="2"
        face="Helvetica">Net profit, available to shareholders
        and assumed conversions </font></td>
        <td valign="top" width="16%" height="16"><p align="right"><font
        size="2" face="Helvetica">$8,580,000</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$883,000</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$16,766,000</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p align="right"><font
        size="2" face="Helvetica">$4,289,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16">&nbsp;</td>
        <td valign="top" width="16%" height="16">&nbsp;</td>
        <td valign="top" width="14%" height="16">&nbsp;</td>
        <td valign="top" width="14%" height="16">&nbsp;</td>
        <td valign="top" width="15%" height="16">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16"><font size="2"
        face="Helvetica">Basic earnings per share</font></td>
        <td valign="top" width="16%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.62</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.07</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$1.21</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.34</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16"><font size="2"
        face="Helvetica">- Before cumulative effect of a change
        in accounting principle</font></td>
        <td valign="top" width="16%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.62</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.07</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$1.21</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.20</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16"><font size="2"
        face="Helvetica">- Cumulative effect of a change in
        accounting principle</font></td>
        <td valign="top" width="16%" height="16"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.14</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%" height="16"><font size="2"
        face="Helvetica">Diluted earnings per share</font></td>
        <td valign="top" width="16%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.43</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.07</font></p>
        </td>
        <td valign="top" width="14%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.84</font></p>
        </td>
        <td valign="top" width="15%" height="16"><p align="right"><font
        size="2" face="Helvetica">$0.33</font></p>
        </td>
    </tr>
</table>
</center></div>

<blockquote>
    <blockquote>
        <p><font face="Helvetica">(1) The diluted EPS
        computations do not include the antidilutive effect of
        the following options:</font></p>
    </blockquote>
</blockquote>
<div align="center"><center>

<table border="0" cellpadding="0" width="546">
    <tr>
        <td valign="top" width="40%">&nbsp;</td>
        <td valign="top" colspan="2" width="31%"><p
        align="center"><font size="2" face="Helvetica">Three
        Months ended</font></p>
        <p align="center"><font size="2" face="Helvetica">June
        30,</font></p>
        </td>
        <td valign="top" colspan="2" width="30%"><p
        align="center"><font size="2" face="Helvetica">Six Months
        ended</font></p>
        <p align="center"><font size="2" face="Helvetica">June
        30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%">&nbsp;</td>
        <td valign="top" width="16%"><p align="center"><font
        size="2" face="Helvetica">2002</font></p>
        </td>
        <td valign="top" width="14%"><p align="center"><font
        size="2" face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="15%"><p align="center"><font
        size="2" face="Helvetica">2002</font></p>
        </td>
        <td valign="top" width="14%"><p align="center"><font
        size="2" face="Helvetica">2003</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="14%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
        <td valign="top" width="14%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="40%">Number of antidilutive
        options, end of period</td>
        <td valign="top" width="16%"><p align="right">298,000</p>
        </td>
        <td valign="top" width="14%"><p align="right">520,000</p>
        </td>
        <td valign="top" width="15%"><p align="right">373,000</p>
        </td>
        <td valign="top" width="14%"><p align="right">376,000</p>
        </td>
    </tr>
</table>
</center></div>

<p>&nbsp;</p>

<p><font face="Helvetica"><i>Stock based compensation</i></font></p>

<p><font face="Helvetica">The following presents pro forma income
and earnings per share impact, using a fair-value-based
calculation, of the Company&#146;s stock-based compensation.
Amounts are expressed in thousands of U.S. dollars except per
share amounts.</font></p>

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

<table border="0" cellpadding="0" width="638">
    <tr>
        <td valign="top" width="40%">&nbsp;</td>
        <td valign="top" colspan="2" width="30%"><p
        align="center"><font size="2" face="Helvetica">Three
        Months ended</font></p>
        <p align="center"><font size="2" face="Helvetica">June
        30,</font></p>
        </td>
        <td valign="top" colspan="2" width="30%"><p
        align="center"><font size="2" face="Helvetica">Six Months
        ended</font></p>
        <p align="center"><font size="2" face="Helvetica">June
        30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%">&nbsp;</td>
        <td valign="top" width="15%"><p align="center"><font
        size="2" face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="15%"><p align="center"><font
        size="2" face="Helvetica">2002</font></p>
        </td>
        <td valign="top" width="15%"><p align="center"><font
        size="2" face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="15%"><p align="center"><font
        size="2" face="Helvetica">2002</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%"><font size="2"
        face="Helvetica">Net profit, as reported</font></td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$7,919,000</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$883,000</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$15,406,000</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$4,289,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%"><font size="2"
        face="Helvetica">Stock-based employee compensation
        expense included in reported net income</font></td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%"><font size="2"
        face="Helvetica">Additional compensation expense</font></td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">451,000</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">470,000</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">896,000</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">939,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%"><font size="2"
        face="Helvetica">Pro forma net profit</font></td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$7,468,000</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$413,000</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$14,510,000</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$3,350,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="40%"><font size="2"
        face="Helvetica">Basic profit per share, as reported</font></td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.62</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.07</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$1.21</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.34</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%"><font size="2"
        face="Helvetica">Diluted profit per share, as reported</font></td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.43</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.07</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.84</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.33</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="40%"><font size="2"
        face="Helvetica">Pro forma basic profit per share</font></td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.58</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.03</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$1.14</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.27</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="40%"><font size="2"
        face="Helvetica">Pro forma diluted profit per share</font></td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.41</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.03</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.80</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        size="2" face="Helvetica">$0.26</font></p>
        </td>
    </tr>
</table>

<p><font face="Helvetica"></font>&nbsp;</p>

<p><font face="Helvetica">For purposes of the pro forma
presentation, the Company determined fair value using the
Black-Scholes option pricing model. The weighted average fair
value of options granted during the three and six months ended
June 30, 2003 and 2002 was $142,000 and $1,104,000, and $12,000
and $1,469,000, respectively. The fair value is being amortized
over five years on an after-tax basis, where applicable, for
purposes of pro forma presentation. Stock options generally
expire five years after the date of grant or three months after
the date of retirement, if earlier. Stock options generally vest
over a five year period with 0% vesting in year one, 25% of the
shares becoming exercisable on each of the next three
anniversaries of the grant date and the balance vesting in the
last six months of the option life. The vesting period is at the
discretion of the Compensation and Stock Option Committee and is
determined at the time of grant.</font></p>

<p><font face="Helvetica">The calculation of fair value in this
pro forma presentation is not indicative of future amounts
because it does not take into consideration future grants, or any
difference between actual and assumed forfeitures.</font></p>

<p><font face="Helvetica"></font>&nbsp;</p>

<p><font face="Helvetica"><b>4. Securities owned and securities
sold, but not yet purchased (at fair market value)</b></font></p>

<table border="0" cellpadding="0" width="564">
    <tr>
        <td valign="top" width="54%">&nbsp;</td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">June 30, 2003</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">December 31, 2002</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">Securities
        owned consist of:</font></td>
        <td valign="top" width="18%">&nbsp;</td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">Corporate
        equities</font></td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">$32,888,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">$11,467,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">Corporate
        and sovereign debt</font></td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">25,599,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">16,522,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">U.S.
        government and agency and state and municipal government
        obligations</font></td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">31,212,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">22,103,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">Money
        market funds </font></td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">2,729,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">Options
        and other</font></td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">15,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">81,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%">&nbsp;</td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">$92,443,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">$50,173,000</font></p>
        </td>
    </tr>
</table>

<p>&nbsp;</p>

<table border="0" cellpadding="0" width="564">
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">Securities
        sold, but not yet purchased consist of:</font></td>
        <td valign="top" width="18%">&nbsp;</td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">Corporate
        equities</font></td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">$5,443,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">$5,049,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">Corporate
        debt </font></td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">5,958,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">3,935,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%"><font face="Helvetica">U.S.
        government and agency and state and municipal government
        obligations and other</font></td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">1,483,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">622,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="54%">&nbsp;</td>
        <td valign="top" width="18%"><p align="right"><font
        face="Helvetica">$12,884,000</font></p>
        </td>
        <td valign="top" width="5%">&nbsp;</td>
        <td valign="top" width="22%"><p align="right"><font
        face="Helvetica">$9,606,000</font></p>
        </td>
    </tr>
</table>

<p><font face="Helvetica">Securities owned and securities sold,
but not yet purchased, consist of trading securities at fair
market values. Included in securities owned at June 30, 2003 are
securities with fair market values of approximately $14,006,000,
which are related to deferred compensation liabilities to
Oppenheimer &amp; Co. Inc. division employees. At June 30, 2003,
the Company has pledged securities owned of approximately
$2,167,000 ($1,078,000 at December 31, 2002) as collateral to
counterparties for stock loan transactions, which can be sold or
repledged. </font></p>

<p><font face="Helvetica"><b>5. Long term debt </b></font></p>

<table border="0" cellpadding="0" width="638">
    <tr>
        <td valign="top" width="43%"><font face="Helvetica">Issued</font></td>
        <td valign="top" width="17%"><p align="center"><font
        face="Helvetica">Maturity Date</font></p>
        </td>
        <td valign="top" width="16%"><p align="center"><font
        face="Helvetica">Interest Rate</font></p>
        </td>
        <td valign="top" width="19%"><p align="center"><font
        face="Helvetica">June 30, 2003</font></p>
        </td>
        <td valign="top" width="6%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" colspan="5"><font face="Helvetica">Zero
        Coupon Promissory Note, </font></td>
    </tr>
    <tr>
        <td valign="top" width="43%"><font face="Helvetica">issued
        January 2, 2003 <b>(a)</b></font></td>
        <td valign="top" width="17%"><p align="center"><font
        face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="16%"><p align="center"><font
        face="Helvetica">0%</font></p>
        </td>
        <td valign="top" width="19%"><p align="right"><font
        face="Helvetica">$58,169,000</font></p>
        </td>
        <td valign="top" width="6%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" colspan="3" width="75%"><font
        face="Helvetica">Less current portion</font></td>
        <td valign="top" width="19%"><p align="right"><font
        face="Helvetica">(14,690,000)</font></p>
        </td>
        <td valign="top" width="6%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%"><font face="Helvetica">Long
        term portion</font></td>
        <td valign="top" width="17%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="19%"><p align="right"><font
        face="Helvetica">43,479,000</font></p>
        </td>
        <td valign="top" width="6%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" colspan="5">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" colspan="5">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%"><font face="Helvetica">First
        Variable Rate Exchangeable </font><p><font
        face="Helvetica">Debenture<b>, </b>issued<b> </b></font></p>
        <p><font face="Helvetica">January 6, 2003 <b>(b)</b></font></p>
        </td>
        <td valign="top" width="17%"><p align="center"><font
        face="Helvetica">January 2, 2013</font></p>
        </td>
        <td valign="top" width="16%"><p align="center"><font
        face="Helvetica">3%</font></p>
        </td>
        <td valign="top" width="19%"><p align="right"><font
        face="Helvetica">69,981,000</font></p>
        </td>
        <td valign="top" width="6%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" colspan="5">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%"><font face="Helvetica">Second
        Variable Rate Exchangeable Debenture, issued</font><p><font
        face="Helvetica">May 12, 2003 <b>(c)</b></font></p>
        </td>
        <td valign="top" width="17%"><p align="center"><font
        face="Helvetica">January 2, 2013</font></p>
        </td>
        <td valign="top" width="16%"><p align="center"><font
        face="Helvetica">3%</font></p>
        </td>
        <td valign="top" width="19%"><p align="right"><font
        face="Helvetica">90,841,000</font></p>
        </td>
        <td valign="top" width="6%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%">&nbsp;</td>
        <td valign="top" width="17%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="19%">&nbsp;</td>
        <td valign="top" width="6%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="43%">&nbsp;</td>
        <td valign="top" width="17%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="19%"><p align="right"><font
        face="Helvetica">$204,301,000</font></p>
        </td>
        <td valign="top" width="6%">&nbsp;</td>
    </tr>
</table>

<blockquote>
    <blockquote>
        <p><font face="Helvetica"><b>(a) </b>The Zero Coupon
        Promissory Note is repayable as related employee notes
        receivable, which are assigned to Fahnestock, become due
        and are forgiven. Such payments are to be made
        notwithstanding whether any of the employees&#146; loans
        default.</font></p>
        <p><font face="Helvetica"><b>(b) </b>The First Variable
        Rate Exchangeable Debenture is exchangeable for
        approximately 3.1 million Class A Shares of the Company
        at the rate of $23.20 per share. The annual interest rate
        is 3% in the first year, 4% in years two through four,
        and 5% in years five through maturity. The First Variable
        Rate Exchangeable Debenture, which matures on January 2,
        2013, contains a retraction clause, which may be
        activated by the holder for a period of 120 days at the
        end of year seven. Interest is payable semi-annually in
        June and December.</font></p>
        <p><font face="Helvetica"><b>(c) </b>The Second Variable
        Rate Exchangeable Debenture was issued upon the
        conversion of a U.S. $90,841,000 Convertible Debenture
        due 2006 following the approval of the holders of the
        Class A and Class B Shares of the Company of such
        conversion on May 12, 2003. The Second Variable Rate
        Exchangeable Debenture is exchangeable for approximately
        3.8 million Class A Shares of the Company, on the same
        terms as the First Variable Rate Exchangeable Debenture
        described in (b) above. </font></p>
    </blockquote>
</blockquote>

<p><font face="Helvetica"><b>6. Net Capital Requirements</b></font></p>

<p><font face="Helvetica">The Company's major subsidiaries,
Fahnestock and Freedom, are subject to the uniform net capital
requirements of the SEC under Rule 15c3-1 (the &quot;Rule&quot;).
Fahnestock computes its net capital requirements under the
alternative method provided for in the Rule which requires that
Fahnestock maintain net capital equal to two percent of aggregate
customer-related debit items, as defined in SEC Rule 15c3-3. At
June 30, 2003, the net capital of Fahnestock as calculated under
the Rule was $77,783,000 or 6% of Fahnestock's aggregate debit
items. This was $51,592,000 in excess of the minimum required net
capital. Freedom computes its net capital requirement under the
basic method provided for in the Rule, which requires that
Freedom maintain net capital equal to the greater of $250,000 or
6 2/3% of aggregate indebtedness, as defined. At June 30, 2003,
Freedom had net capital of $3,850,000, which was $3,600,000 in
excess of the $250,000 required to be maintained at that date.</font></p>

<blockquote>
    <blockquote>
        <p><font face="Helvetica"><b>7. Commitments and
        contingencies</b></font></p>
    </blockquote>
</blockquote>

<p><font face="Helvetica">The Company and its subsidiaries have
operating leases for office space and capital leases for
equipment expiring at various dates through 2013. Future minimum
rental commitments under such office and equipment leases as at
June 30, 2003 are as follows:</font></p>
<div align="center"><center>

<table border="0" cellpadding="0" cellspacing="1" width="378">
    <tr>
        <td valign="top" width="65%"><font face="Helvetica">Balance
        of 2003</font></td>
        <td valign="top" width="35%"><p align="right"><font
        face="Helvetica">$12,399,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="65%"><font face="Helvetica">2004</font></td>
        <td valign="top" width="35%"><p align="right"><font
        face="Helvetica">22,249,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="65%"><font face="Helvetica">2005</font></td>
        <td valign="top" width="35%"><p align="right"><font
        face="Helvetica">19,813,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="65%"><font face="Helvetica">2006</font></td>
        <td valign="top" width="35%"><p align="right"><font
        face="Helvetica">18,308,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="65%"><font face="Helvetica">2007</font></td>
        <td valign="top" width="35%"><p align="right"><font
        face="Helvetica">16,633,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="65%"><font face="Helvetica">2008
        and thereafter</font></td>
        <td valign="top" width="35%"><p align="right"><font
        face="Helvetica">63,284,000</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="65%"><font face="Helvetica">Total</font></td>
        <td valign="top" width="35%"><p align="right"><font
        face="Helvetica">$152,686,000</font></p>
        </td>
    </tr>
</table>
</center></div>

<p><font face="Helvetica">Certain of the leases contain
provisions for rent escalation based on increases in costs
incurred by the lessor.</font></p>

<p><font face="Helvetica">The Company&#146;s rent expense for the
three and six months ended June 30, 2003 and 2002 was $7,844,000
and $15,971,000, respectively, and $3,399,000 and $6,959,000,
respectively.</font></p>

<blockquote>
    <blockquote>
        <p><font face="Helvetica"><b>8. Financial instruments
        with off-balance sheet risk and concentration of credit
        risk</b></font></p>
    </blockquote>
</blockquote>

<p><font face="Helvetica">In the normal course of business, the
Company's securities activities involve execution, settlement and
financing of various securities transactions for customers. These
activities may expose the Company to risk in the event customers,
other brokers and dealers, banks, depositories or clearing
organizations are unable to fulfill their contractual
obligations.</font></p>

<p><font face="Helvetica">The Company is exposed to off-balance
sheet risk of loss on unsettled transactions in the event
customers and other counterparties are unable to fulfill their
contractual obligations. It is the Company's policy to
periodically review, as necessary, the credit standing of each
counterparty with which it conducts business.</font></p>

<p><font face="Helvetica">Securities sold, but not yet purchased,
represent obligations of the Company to deliver the specified
security at the contracted price and thereby create a liability
to repurchase the security in the market at prevailing prices.
Accordingly, these transactions result in off-balance-sheet risk,
as the Company's ultimate obligation to satisfy the sale of
securities sold, but not yet purchased, may exceed the amount
recognized on the balance sheet. Securities positions are
monitored on a daily basis.</font></p>

<p><font face="Helvetica">The Company's customer financing and
securities lending activities require the Company to pledge
customer securities as collateral for various financing sources
such as bank loans and securities lending. At June 30, 2003, the
Company had approximately $1.3 billion</font><font
color="#FF0000" face="Helvetica"> </font><font face="Helvetica">of
customer securities under customer margin loans that are
available to be pledged, of which the Company has repledged
approximately $300,439,000 under securities loan agreements. In
addition, the Company has received collateral of approximately
$548,140,000 under securities borrow agreements, of which the
Company has repledged approximately $266,727,000 as collateral
under securities loan agreements. Included in receivable from
brokers and clearing organizations are receivables from five
major U.S. broker-dealers totaling $248,069,000.</font></p>

<p><font face="Helvetica">The Company monitors the market value
of collateral held and the market value of securities receivable
from others. It is the Company's policy to request and obtain
additional collateral when exposure to loss exists. In the event
the counterparty is unable to meet its contractual obligation to
return the securities, the Company may be exposed to off-balance
sheet risk of acquiring securities at prevailing market prices. </font></p>

<p><font face="Helvetica">At June 30, 2003 the Company had
outstanding commitments to buy and sell of $2,557,000 and
$2,058,000, respectively, of mortgage-backed securities on a when
issued basis. These commitments have off-balance sheet risks
similar to those described above.</font></p>

<p><font face="Helvetica">Until May 27, 2003, the Company cleared
its Oppenheimer &amp; Co. division securities transactions
through CIBC World Markets. Accordingly, the Company had credit
exposures with this clearing broker. The clearing broker can
rehypothecate the securities held on behalf of the Company. The
clearing broker has the right to charge the Company for losses
that result from a client's failure to fulfill its contractual
obligations. As the right to charge the Company has no maximum
amount and applies to all trades executed through the clearing
broker, the Company believes there is no maximum amount
assignable to this right. At June 30, 2003, the Company has
recorded no liabilities with regard to this right. The Company's
policy is to monitor the credit standing of this clearing broker,
all counterparties and all clients with which it conducts
business.</font></p>

<p><font face="Helvetica">Additionally, the Company has a
clearing arrangement with Pershing LLC, with terms similar to
those described above, to clear certain transactions in foreign
securities.</font></p>

<p><font face="Helvetica"><b>9. Related Party Transactions</b></font></p>

<p><font face="Helvetica">The Company has notes and accounts
receivable from employees, net, of approximately $94,118,000 at
June 30, 2003, which are recorded at face value net of
accumulated amortization. These amounts will be forgiven over a
service period from the initial date of the loan or based on
productivity levels of employees with respect to certain of these
notes receivable and are contingent on the employee&#146;s
continued employment with the Company. The unamortized portion of
the notes become due and payable on demand in the event the
employee departs during the service period.</font></p>

<p><font face="Helvetica">As at June 30, 2003, the Company had
future commitments to make loans to certain employees against
notes receivable of approximately $21,237,000. These notes will
have terms similar to those described above.</font></p>

<p><font face="Helvetica"><b>10. Segment Information</b></font></p>

<p><font face="Helvetica">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, 2002. The Company&#146;s business is conducted
primarily in the United States. Asset information by reportable
segment is not reported, since the Company does not produce such
information for internal use.</font></p>

<table border="0" cellpadding="0" width="510">
    <tr>
        <td valign="top" width="32%">&nbsp;</td>
        <td valign="top" colspan="2" width="33%"><p
        align="center"><font size="2" face="Helvetica">Three
        Months ended</font></p>
        <p align="center"><font size="2" face="Helvetica">June
        30,</font></p>
        </td>
        <td valign="top" colspan="2" width="35%"><p
        align="center"><font size="2" face="Helvetica">Six Months
        ended</font></p>
        <p align="center"><font size="2" face="Helvetica">June
        30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="32%">&nbsp;</td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">2002</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">2002</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" colspan="5"><font size="2"
        face="Helvetica">Expressed in thousands of dollars</font></td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Revenue:</font></td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="18%">&nbsp;</td>
        <td valign="top" width="18%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Private
        Client </font></td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">$130,256</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">$45,622</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">$244,690</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">$93,343</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Capital
        Markets</font></td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">27,427</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">14,786</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">68,764</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">31,213</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Asset
        Management</font></td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">5,810</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">4,396</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">9,822</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">9,014</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="32%" height="23"><font
        face="Helvetica">Other</font></td>
        <td valign="top" width="16%" height="23"><p align="right"><font
        size="2" face="Helvetica">904</font></p>
        </td>
        <td valign="top" width="16%" height="23"><p align="right"><font
        size="2" face="Helvetica">3,340</font></p>
        </td>
        <td valign="top" width="18%" height="23"><p align="right"><font
        size="2" face="Helvetica">1,972</font></p>
        </td>
        <td valign="top" width="18%" height="23"><p align="right"><font
        size="2" face="Helvetica">5,091</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="32%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="18%">&nbsp;</td>
        <td valign="top" width="18%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Total</font></td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">$164,397</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">$68,144</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">$325,248</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">$138,661</font></p>
        </td>
    </tr>
</table>

<table border="0" cellpadding="0" width="510">
    <tr>
        <td valign="top" width="32%"><font face="Helvetica"></font><p><font
        face="Helvetica">Operating Income:</font></p>
        </td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="18%">&nbsp;</td>
        <td valign="top" width="18%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Private
        Client *</font></td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">$2,108</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">$(2,480)</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">$(10,227)</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">$(6,290)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Capital
        Markets</font></td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">8,161</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">2,206</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">11,604</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">4,059</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Asset
        Management</font></td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">4,910</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">3,264</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">8,155</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">6,646</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Other</font></td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">(1,578)</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">(1,078)</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">16,966</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">103</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="32%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="16%">&nbsp;</td>
        <td valign="top" width="18%">&nbsp;</td>
        <td valign="top" width="18%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="32%"><font face="Helvetica">Total</font></td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">$13,601</font></p>
        </td>
        <td valign="top" width="16%"><p align="right"><font
        size="2" face="Helvetica">$1,912</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">$26,498</font></p>
        </td>
        <td valign="top" width="18%"><p align="right"><font
        size="2" face="Helvetica">$4,518</font></p>
        </td>
    </tr>
</table>

<blockquote>
    <blockquote>
        <p><font face="Helvetica">* Losses in the Private Client
        segment in 2003 are the result of transition services
        costs relating to the Oppenheimer &amp; Co. division,
        which continued until the Oppenheimer &amp; Co
        division&#146;s client accounts were converted to the
        Company&#146;s clearing platform at the end of May 2003
        as well as significant litigation settlement costs
        relating to Josephthal. Losses in the Private Client
        segment in 2002 are the result of operating losses and
        acquisition costs relating to Josephthal, Prime Charter
        and BUYandHOLD, and include litigation settlement costs,
        retention and severance costs and the costs of
        under-utilized facilities.</font></p>
    </blockquote>
</blockquote>

<p><font face="Helvetica"><b>11. Acquisitions</b></font></p>

<p><font face="Helvetica">On January 3, 2003, the Company
acquired the U.S. Private Client Division of CIBC World Markets
Corp. (&quot;World Markets&quot;), a wholly-owned subsidiary of
Canadian Imperial Bank of Commerce (&quot;CIBC&quot;), and agreed
to complete the acquisition of the U.S. Asset Management Division
of World Markets. The U.S. Private Client Division, now operating
as the Oppenheimer &amp; Co. division of Fahnestock, employed
approximately 620 brokers in 18 branch offices located across the
United States. Client assets at December 31, 2002 were
approximately $30 billion. The acquisition more than doubles the
Company&#146;s private client presence in terms of client assets
and provides managerial expertise to the organization. On June 4,
2003 the Company completed the acquisition of the U.S. Asset
Management Division of World Markets, now operating as
Oppenheimer Asset Management. Oppenheimer Asset Management
includes Oppenheimer Investment Advisers, three investment
management consulting programs (Investment Advisory Service,
Strategic Asset Review and Portfolio Advisory Service), a
broker-managed wrap program (OMEGA) and Advantage Advisors (which
includes publicly listed closed end funds and alternative
investment offerings). The acquisition was accounted for by the
purchase method. The Company engaged an independent evaluator to
identify and value intangible assets acquired. The fair value of
assets acquired, included in the table below, is based on
preliminary estimates. The Company does not expect these values
to materially change when the final report is issued.</font></p>

<blockquote>
    <blockquote>
        <p><font face="Helvetica">The following table summarizes
        the estimated fair value of assets acquired, in thousands
        of dollars.</font></p>
    </blockquote>
</blockquote>
<div align="left">

<table border="0" cellpadding="0" cellspacing="1" width="390">
    <tr>
        <td valign="top" width="71%"><p align="left"><font
        size="3" face="Helvetica">Prepaid expenses</font></p>
        </td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">$1,206</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Marketable securities</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">12,783</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Seed capital investments</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">3,987</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Property, plant and equipment</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">11,657</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Notes receivable</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">65,513</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Other assets</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">2,081</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Intangible assets</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">36,600</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Goodwill</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">125,932</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Less:</font></td>
        <td valign="top" width="29%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Deferred compensation liabilities</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">(12,783)</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Accrued expenses and accounts payable</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">(3,950)</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
    <tr>
        <td valign="top" width="71%"><font size="3"
        face="Helvetica">Purchase price paid</font></td>
        <td valign="top" width="29%"><blockquote>
            <blockquote>
                <p align="right"><font size="3" face="Helvetica">$243,026</font></p>
            </blockquote>
        </blockquote>
        </td>
    </tr>
</table>
</div>

<p><font face="Helvetica">The aggregate purchase price of
approximately $243,026,000 was paid as follows:</font></p>

<table border="0" cellpadding="7" cellspacing="0" width="597">
    <tr>
        <td valign="top" width="20%"><p align="right"><font
        face="Helvetica">$16,690,000</font></p>
        </td>
        <td valign="top" width="80%"><font face="Helvetica">paid
        by Fahnestock in cash from cash on hand</font></td>
    </tr>
    <tr>
        <td valign="top" width="20%"><p align="right"><font
        face="Helvetica">$65,514,000</font></p>
        </td>
        <td valign="top" width="80%"><font face="Helvetica">was
        paid with the proceeds of the issuance by Viner Finance
        Inc., a wholly-owned subsidiary of the Company, to World
        Markets, of a zero coupon promissory note (i)</font></td>
    </tr>
    <tr>
        <td valign="top" width="20%"><p align="right"><font
        face="Helvetica">$160,822,000 </font></p>
        </td>
        <td valign="top" width="80%"><font face="Helvetica">was
        paid with the proceeds of debentures issued by E.A. Viner
        International Co., a wholly-owned subsidiary of the
        Company, to CIBC (ii)</font></td>
    </tr>
</table>

<p><font face="Helvetica"></font>&nbsp;</p>

<blockquote>
    <blockquote>
        <blockquote>
            <p><font face="Helvetica">(</font>i)<font
            face="Helvetica"> The Zero Coupon Promissory Note is
            repayable as related employee notes receivable, which
            are assigned to Fahnestock, become due and are
            forgiven. Such payments are to be made
            notwithstanding whether any of the employees&#146;
            loans default.</font></p>
            <p><font face="Helvetica">(</font>ii)<font
            face="Helvetica"> Two debentures were issued. The
            first variable rate exchangeable debenture, in the
            principal amount of approximately $70 million, is
            exchangeable for approximately 3.1 million Class A
            Shares of the Company at the rate of $23.20 per
            share. The second variable rate exchangeable
            debenture, in the principal amount of approximately
            $91 million, is exchangeable for approximately 3.8
            million Class A Shares of the Company at the rate of
            $23.20 per share. The first and second variable rate
            exchangeable debentures mature in ten years, and bear
            interest at an annual rate of interest of 3% in the
            first year, 4% in years two through four, and 5% in
            years five through maturity. The first and second
            variable rate exchangeable debentures will be
            exchangeable for an aggregate of 6,932,000 Class A
            Shares (approximately 35% of the Class A Shares on a
            fully diluted basis) plus a potential additional
            issuance of up to approximately 208,000 Class A
            Shares if the debentures are exchanged, the holders
            exercise their rights to have the resulting Class A
            Shares sold and the holders realize a price of less
            than $23.20 per share. </font></p>
        </blockquote>
    </blockquote>
</blockquote>

<p><font face="Helvetica">In addition, the Company has arranged a
credit facility in the amount of $50 million with CIBC. In
January 2003, the Company borrowed $25 million under this
facility and borrowed the balance in July 2003. The borrowings
are being used to finance broker notes and are repayable,
together with interest at the CIBC U.S. base rate plus 2%, over
five years or earlier if any broker notes become due earlier. </font></p>

<p><font face="Helvetica">Presented below are pro forma
consolidated results of operations. Amounts presented give effect
to the acquisitions of the U.S. Private Client and Asset
Management Divisions of World Markets as if the transactions were
consummated as at January 1, 2002. The Company&#146;s actual
results for the six months ended June 30, 2003 include the
results of the Oppenheimer &amp; Co. division of Fahnestock. The
pro forma information is for comparative purposes only and is not
indicative either of the actual results that would have occurred
if the acquisition had been consummated at the beginning of the
periods presented, or of future operations of the combined
companies. CIBC has an October 31<sup>st</sup> year-end and
therefore, the 2002 financial information for the acquired
divisions relates to the three and six months ended April 30,
2002. Expenses included in the pro forma presentation for the
three and six months ended June 30, 2002 include corporate
expense allocations, reflecting the manner in which this division
was managed within CIBC. In the three and six months ended June
30, 2003, the Company incurred certain transition costs relating
to the continued management and clerical support and clearing
services provided by World Markets. The Company anticipates
substantial cost savings after the conversion of the client
accounts of the acquired division to the Company&#146;s clearing
platform. The conversion took place on May 27, 2003. Such
anticipated cost savings are not reflected in the table presented
below.</font></p>

<table border="0" cellpadding="0" width="638">
    <tr>
        <td valign="top" width="42%"><font face="Helvetica">Expressed
        in thousands of dollars, except per share amounts</font></td>
        <td valign="top" colspan="2" width="28%"><p
        align="center"><font face="Helvetica">Three months ended</font></p>
        <p align="center"><font face="Helvetica">June 30,</font></p>
        </td>
        <td valign="top" colspan="2" width="30%"><p
        align="center"><font face="Helvetica">Six months ended</font></p>
        <p align="center"><font face="Helvetica">June 30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="42%">&nbsp;</td>
        <td valign="top" width="15%"><p align="center"><font
        face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="13%"><p align="center"><font
        face="Helvetica">2002</font></p>
        </td>
        <td valign="top" width="15%"><p align="center"><font
        face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="15%"><p align="center"><font
        face="Helvetica">2002</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="42%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
        <td valign="top" width="13%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
        <td valign="top" width="15%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="42%"><font face="Helvetica">Revenue</font></td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$180,731</font></p>
        </td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">$184,757</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$370,531</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$380,628</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="42%"><font face="Helvetica">Profit
        (loss) before tax from operations</font></td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$15,948</font></p>
        </td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">($15,004)</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$33,136</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">($19,269)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="42%"><font face="Helvetica">Net
        profit (loss)</font></td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$9,250</font></p>
        </td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">($8,702)</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$19,219</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">($11,176)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="42%"><font face="Helvetica">Basic
        earnings (loss) per share </font></td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$0.72</font></p>
        </td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">($0.69)</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$1.51</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">($0.89)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="42%"><font face="Helvetica">Diluted
        earnings (loss) per share</font></td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$0.49</font></p>
        </td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">($0.41)</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">$1.03</font></p>
        </td>
        <td valign="top" width="15%"><p align="right"><font
        face="Helvetica">($0.49)</font></p>
        </td>
    </tr>
</table>

<p><font face="Helvetica"><b></b></font>&nbsp;</p>

<p><font face="Helvetica"><b>Item 2. Management&#146;s Discussion
and Analysis of Financial Condition and Results of Operations </b></font></p>

<p><font face="Helvetica">The Company&#146;s financial statements
have been prepared in accordance with accounting principles
generally accepted in the United States of America. Reference is
also made to the Company&#146;s consolidated financial statements
and notes thereto found in its Annual Report on Form 10-K for the
year ended December 31, 2002.</font></p>

<p><font face="Helvetica">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), research,
market-making, and investment advisory and asset management
services. The Company provides its services from 100 offices in
22 states located throughout the United States. Fahnestock
conducts business in South America through local broker-dealers.
Client assets entrusted to the Company as at June 30, 2003
totalled approximately $47 billion. The Company provides
investment advisory services through Oppenheimer Asset Management
Inc. and Fahnestock Asset Management, operating as a division of
Fahnestock. At June 30, 2003 client assets under management by
the asset management groups totalled $9.1 billion. At June 30,
2003, the Company employed approximately 3,017 people, of whom
1,769 were financial consultants. </font></p>

<p><font face="Helvetica"><b>Critical Accounting Policies</b></font></p>

<p><font face="Helvetica">The Company&#146;s accounting policies
are essential to understanding and interpreting the financial
results reported in the condensed consolidated financial
statements. The significant accounting policies used in the
preparation of the Company&#146;s condensed consolidated
financial statements are summarized in note 1 to those
statements. Certain of those policies are considered to be
particularly important to the presentation of the Company&#146;s
financial results because they require management to make
difficult, complex or subjective judgments, often as a result of
matters that are inherently uncertain. The following is a
discussion of these policies.</font></p>

<p><font face="Helvetica"><br>
<i>Valuation of Financial Instruments</i><br>
Substantially all&nbsp;financial instruments are reflected in the
consolidated financial statements at fair&nbsp;value or amounts
that approximate fair value. These&nbsp;include cash equivalents;
deposits&nbsp;with&nbsp;clearing organizations; securities owned;
and securities sold, but&nbsp;not yet purchased. &nbsp;Where
available, the Company uses prices from independent
sources,&nbsp;such as listed market prices, or broker or dealer
price quotations. In addition, even where&nbsp;the&nbsp;value of
a&nbsp;security&nbsp;is&nbsp;derived from an independent market
price or broker or dealer quote, certain assumptions may be
required&nbsp;to&nbsp;determine the&nbsp;fair&nbsp;value.
For&nbsp;instance,&nbsp;the&nbsp;Company generally assumes that
the size of positions in securities that the Company
holds&nbsp;would&nbsp;not be&nbsp;large
enough&nbsp;to&nbsp;affect&nbsp;the&nbsp;quoted price of&nbsp;the
securities if the Company were to sell them, and&nbsp;that any
such sale would happen in an orderly manner. However, these
assumptions may be incorrect and the actual value realized upon
disposition could be different from the current carrying value. </font></p>

<p><font face="Helvetica"><i>Intangible Assets and Goodwill<br>
</i>Goodwill represents the excess cost of a business acquisition
over the fair value of the&nbsp;net&nbsp;assets acquired. SFAS
No.&nbsp;142, &quot;Goodwill and Other Intangible
Assets,&quot;&nbsp;provides that goodwill is no longer amortized
and the value of identifiable intangible assets must be amortized
over their useful lives, unless the asset is determined to have
an indefinite useful life. Goodwill&nbsp;relates&nbsp;to&nbsp;the
acquisitions of Fahnestock, First of Michigan Capital
Corporation, Grand Charter Group Incorporated, Josephthal &amp;
Co. Inc. and the Oppenheimer &amp; Co. division and has been
allocated to the private client reporting unit pursuant
to&nbsp;SFAS No. 142. The Company obtained an independent
valuation of assets acquired and liabilities assumed with respect
to the acquisition of the Oppenheimer &amp; Co. division in 2003.
This valuation involved significant estimates, which were based
on historical data, revenue projections and industry experience.
The Company has identified intangible assets relating to customer
relationships, which it is amortizing over their useful lives and
trademarks and trade names, which are being evaluated for
impaiment on at least an annual basis. The excess cost of the
Oppenheimer &amp; Co. division is being allocated to goodwill.<br>
</font></p>

<p><font face="Helvetica">The Company reviews its goodwill
on&nbsp;at least&nbsp;an&nbsp;annual&nbsp;basis in order to
determine whether its value is impaired.
Goodwill&nbsp;is&nbsp;impaired when&nbsp;the carrying amount of
the reporting unit exceeds the implied fair value of the
reporting unit. &nbsp;In estimating&nbsp;the fair value&nbsp;of
the reporting&nbsp;unit, the Company uses valuation techniques
based on multiples of revenues, earnings, book value&nbsp;and
discounted cash&nbsp;flows&nbsp;similar
to&nbsp;models&nbsp;employed&nbsp;in analyzing the purchase
price&nbsp;of an acquisition target. If the value of the goodwill
is impaired, the difference&nbsp;between the value of&nbsp;the
goodwill reflected on the&nbsp;financial statements
and&nbsp;its&nbsp;current fair value&nbsp;is recognized as an
expense in the period in which the impairment occurs.</font></p>

<p><font face="Helvetica"><br>
<i>Reserves<br>
</i>The&nbsp;Company records reserves&nbsp;related&nbsp;to
legal&nbsp;proceedings&nbsp;in &nbsp;&quot;other payables and
accrued expenses&quot;. The determination of the amounts
of&nbsp;these reserves requires significant judgment on&nbsp;the
part&nbsp;of&nbsp;management. Management&nbsp;considers many
factors including, but&nbsp;not limited to: the amount of the
claim; the amount of the loss, if any,&nbsp;in the&nbsp;client's
account; the&nbsp;basis and&nbsp;validity of the claim; the
possibility of wrong&nbsp;doing on&nbsp;the part of an employee
of the Company; previous results in similar&nbsp;cases; and legal
precedents and case law as well as the timing of the resolution
of such matters. Each legal proceeding is reviewed with counsel
in each accounting period and the reserve is adjusted as deemed
appropriate by management. Any change in the reserve amount is
recorded as&nbsp;a charge to results&nbsp;in that period. The
assumptions of management in determining the estimates of
reserves may be incorrect and the actual disposition of a legal
proceeding could be greater or less than the reserve amount.<br>
<br>
The&nbsp;Company&nbsp;also records&nbsp;reserves&nbsp;or
allowances&nbsp;for doubtful&nbsp;accounts related&nbsp;to
receivables from&nbsp;clients and financial&nbsp;consultants.
&nbsp;Client loans are&nbsp;collateralized by securities;
however,&nbsp;if there is a decline in&nbsp;the value&nbsp;of the
collateral and the Company cannot obtain additional collateral or
collect on the loan, a reserve is established. &nbsp;The Company
also makes loans&nbsp;or pays advances&nbsp;to financial
consultants. Reserves&nbsp;are established on these
receivables&nbsp;if the financial consultant is no longer
associated with the Company and the receivable has not been
promptly repaid or&nbsp;if it is determined that it is probable
the amount will not be collected.</font></p>

<p><font face="Helvetica">The Company also estimates taxes
payable and records income tax reserves. These reserves are based
on historical experience and may not reflect the ultimate
liability. The Company monitors and adjusts these reserves as
necessary.</font></p>

<p><font face="Helvetica"><b>Business Environment</b></font></p>

<p><font face="Helvetica">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, including recent interest in
accounting and corporate governance reforms.</font></p>

<p><font face="Helvetica"><b>Results of Operations</b></font></p>

<p><font face="Helvetica">Net profit for the second quarter of
2003 was $7,919,000 or $0.62 per share, an increase of
approximately 800% in net profit when compared to net profit of
$883,000 or $0.07 per share in the second quarter of 2002.
Revenue for the second quarter of 2003 was U.S. $164,397,000, an
increase of over 141% compared to revenue of $68,144,000 in the
second quarter of 2002. At June 30, 2003, shareholders&#146;
equity was approximately </font><font face="Helv">$267,137,000</font><font
face="Helvetica"> and book value per share was $20.84 compared to
shareholders&#146; equity of $245,142,000<b> </b>and book value
per share of $19.58 at June 30, 2002.</font></p>

<p><font face="Helvetica">Net profit for the six months ended
June 30, 2003 was $15,406,000 or $1.21 per share compared to
$4,289,000 or $0.34 per share in the first half of 2002, an
increase of over 259% in net profit. Revenue for the six months
ended June 30, 2003 was $325,248,000 compared to $138,661,000 for
the same period in 2002, an increase of 135%.</font></p>

<p><font face="Helvetica">The results of the three and six months
ended June 30, 2003, compared to the same periods of 2002,
reflect the changed face of the Company after the acquisition by
the Company on January 3, 2003 of the U.S. private client
business of CIBC World Markets and the subsequent acquisition of
the U.S. asset management business of CIBC World Markets
(together, the Oppenheimer &amp; Co. division). This acquisition
more than doubled the Company&#146;s private client presence,
adding approximately 620 financial consultants in 18 offices, at
closing. The aggregate purchase price was approximately U.S. $243
million. The Company began self-clearing substantially all of the
private client business at the end of May 2003. Until that time,
CIBC provided operational and administrative services to the
Company on a transition basis. That arrangement precluded the
attainment of certain operating efficiencies and cost savings
that became available to the Company post- conversion of the
client accounts to the Company&#146;s clearing platform.</font></p>

<p><font face="Helvetica">The Company closed on its purchase of
Oppenheimer Asset Management on June 4, 2003. Oppenheimer Asset
Management currently manages client assets totaling over U.S. $8
billion. The business includes internally managed funds,
alternative investments (including hedge funds) and third party
managed high net worth accounts.</font></p>

<p><font face="Helvetica">Fahnestock&#146;s results were
significantly impacted by the recent integration of its
acquisition of the Oppenheimer &amp; Co. division and the closing
of the purchase of Oppenheimer Asset Management. In 2003,
expenses were impacted by payments to CIBC through May 2003, for
various transition services, which the Company utilized during
the period. The costs of integration and retention also
significantly impacted the 2003 results. On May 27, 2003,
Fahnestock assumed clearing and execution of the business of
Oppenheimer. There were client service issues and internal
operational difficulties encountered as a result of the largest
conversion of client accounts in the Company&#146;s history,
which were largely rectified by the end of the second quarter.
The Company continues to monitor its systems requirements and
remains committed to make improvements in service and technology.
</font></p>

<p><font face="Helvetica">The assumption of the clearing
functions substantially changed the Company&#146;s balance sheet
through increased client receivables and payables, related
broker-dealer stock loans and borrows and bank loans, as well as
some increase in inventories carried by the Company to
accommodate the increased size of the business. The Company
continues to believe that this recent acquisition will transform
the Company and the Company remains confident that operating
margins will improve over coming quarters as overlapping services
are eliminated, and integration is completed.</font></p>

<p><font face="Helvetica">The cessation of full-scale hostilities
in Iraq permitted the securities markets to focus on U.S.
domestic fiscal and economic matters. Clearly investors liked
what they saw, and in the second quarter of 2003 markets
experienced one of the strongest rallies since 1999. Interest
rates on fixed income securities fell to the lowest level in 30
years, while the broad based stock market indexes rallied 14.9%.
Investors seem to have made a determination to look beyond the
current quarter into future periods, and clearly expect the
economy to pick up momentum in the latter part of 2003 and the
first half of 2004 propelled by low interest rates and lower
taxes.</font></p>

<p><font face="Helvetica">Commission income and, to a large
extent, income from principal transactions depend on investor
participation in the markets. Commission revenue increased by
133% and 114% in the three and six months ended June 30, 2003,
respectively, compared to the comparable periods of 2002
primarily as a result of the acquisition of the Oppenheimer &amp;
Co. division. In addition, in the latter part of the second
quarter of 2003, market volumes picked up as investors began to
show signs of re-entry. Net revenue from principal transactions
increased by 237% and 159% in the three and six months ended June
30, 2003, respectively, compared to the comparable periods of
2002 due to business generated by the Oppenheimer &amp; Co.
division, higher trading profits from fixed income securities as
a result of lower interest rates and higher bond prices in the
three and six months ended June 30, 2003 compared to the same
periods in 2002. Investment banking revenues increased by 117%
and 160% in the three and six months ended June 30, 2003,
respectively, compared with the comparable periods of 2002,
related to increased participation in the issuance of closed-end
funds and debt securities primarily as a result of the
Oppenheimer &amp; Co. division acquisition. Advisory fees
increased by 144% and 121% in the three and six months ended June
30, 2003, respectively, compared to the comparable periods of
2002, primarily as a result of the acquisition of the Oppenheimer
&amp; Co. division.</font></p>

<p><font face="Helvetica">Net interest revenue (interest revenue
less interest expense) increased by 22% and 40% in the three and
six months ended June 30, 2003, respectively, compared to the
comparable periods of 2002 primarily as a result of interest
earned on the Oppenheimer &amp; Co. division client balances
carried by CIBC World Markets through May 27, 2003 and by the
Company post-conversion, despite lower interest rates in the
comparable periods.</font></p>

<p><font face="Helvetica">Expenses increased by 128% and 123% in
the three and six months ended June 30, 2003, respectively,
compared to the comparable periods of 2002. The increase in
expenses can be attributed to the acquisition of the Oppenheimer
&amp; Co. division on January 3, 2003. Compensation expense has
volume-related components and, therefore, increased with the
increased level of commission business conducted in the three and
six months ended June 30, 2003 compared to the comparable periods
of 2002. In addition, the fixed component of compensation expense
increased with the increase in staff in newly acquired offices to
handle the business of the larger entity. The cost of clearing
and exchange fees increased 151% and 198% in the three and six
months ended June 30, 2003, respectively, compared to the
comparable periods of 2002 due to the costs associated with the
clearing of Oppenheimer &amp; Co. division client accounts by
World Markets during the transition period through May 27, 2003.
The cost of communications and technology increased 79% and 64%
in the three and six months ended June 30, 2003, respectively,
compared to comparable periods of 2002 due to the costs
associated with connecting approximately 56% more financial
consultants and 18 more branch offices in 2003 compared to 2002.
Occupancy costs increased by 87% and 80% in three and six months
ended June 30, 2003, respectively, compared to the comparable
periods of 2002 due to the additional costs of 18 branch
locations in 2003 compared to 2002. Occupancy costs are being
aggressively addressed and previously underutilized space is
being refitted and occupied. The Company does not expect to have
any unutilized space after the second quarter of 2003. Other
expenses continue to be affected by litigation settlement costs.
The Company may face additional unfavorable judgments in future
quarters. The Company has used its best estimate to provide
adequate reserves to cover litigation losses.</font></p>

<p><font face="Helvetica"><b>Liquidity and Capital Resources</b></font></p>

<p><font face="Helvetica">Total assets at June 30, 2003 increased
by approximately 102% from December 31, 2002 due primarily to the
acquisition of the Oppenheimer &amp; Co. division and the
conversion of the Oppenheimer client accounts to the Fahnestock
clearing platform on May 27, 2003. Liquid assets accounted for
91% of total assets, compared to 98% at year-end. The Oppenheimer
acquisition resulted in the addition of fixed assets, intangibles
and goodwill, all considered long-term in nature. Current assets
at June 30, 2003 increased by 87% compared to the previous
year-end because of increases in all aspects of the
Company&#146;s business with the self-clearing of the Oppenheimer
business. The new business impacted broker and customer
receivable, stock borrow/stock loan balances, deposits with
clearing organizations, restricted cash and notes receivable. The
Company satisfies its need for funds from its own cash resources,
internally generated funds, collateralized and uncollateralized
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, changes in stock
loan balances and changes in notes receivable from employees.
Fahnestock has arrangements with banks for borrowings on an
unsecured and on a fully collateralized basis. At June 30, 2003,
$190,218,000 of such borrowings were outstanding, an increase of
1074% compared to outstanding borrowings at December 31, 2002. At
June 30, 2003, the Company had available collateralized and
uncollateralized letters of credit of $154,400,000.</font></p>

<p><font face="Helvetica">In connection with the acquisition of
the Oppenheimer &amp; Co. division, the Company issued debentures
in the amount of approximately $161 million and a zero coupon
promissory note in the amount of approximately $66 million. The
notes to the financial statements contain a description of these
instruments. The interest due on the debentures is payable
semi-annually and is being financed from internally-generated
funds. The principal payments on the zero coupon promissory note
is also being financed from internally-generated funds. The
Company believes that the necessary internally-generated funds
will be available to service these obligations from funds
generated by normal operations, including funds generated by the
acquired business. </font></p>

<p><font face="Helvetica">In connection with the acquisition of
the Oppenheimer &amp; Co. division, the Company has arranged a
credit facility in the amount of $50 million with CIBC. In
January 2003, the Company borrowed $25 million under this
facility and borrowed the balance in July 2003. The borrowings
are being used to finance broker notes and are repayable,
together with interest at the CIBC U.S. base rate plus 2%, over
five years or earlier if any broker notes become due earlier. The
interest and principal repayments are being made out of
internally-generated funds and the Company believes that the cash
flow from funds generated by normal operations, including funds
generated by the acquired business, will be adequate to enable
the Company to meet its obligations.</font></p>

<p><font face="Helvetica">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.</font></p>

<p><font face="Helvetica">In the second quarter of 2003, pursuant
to a Normal Course Issuer Bid (which commenced on July 9, 2002
and terminated on July 8, 2003), the Company purchased a total of
5,800 Class A Shares at an average price of $22.71 per share
through the facilities of the New York Stock Exchange. All shares
purchased have been cancelled. The cumulative number of Class A
Shares which were purchased under the expiring Bid is 91,000 at
an average price of $21.59 per share.</font></p>

<p><font face="Helvetica">On July 8, 2003 the Company announced
that it intends, if circumstances are favorable, to purchase up
to 636,000 of its Class A Shares by way of a Normal Course Issuer
Bid through the facilities of the New York and Toronto Stock
Exchanges between July 10, 2003 and July 9, 2004. All shares
purchased will be cancelled.</font></p>

<p><font face="Helvetica">On May 23, 2003, the Company paid cash
dividends of U.S.$0.09 per Class A Share and Class B Share
totaling $1,151,000 from available cash on hand.</font></p>

<p><font face="Helvetica">On July 24, 2003, the Board of
Directors declared a regular quarterly cash dividend of U.S.$0.09
per Class A and Class B Share payable on August 22, 2003 to
shareholders of record on August 8, 2003.</font></p>

<p><font face="Helvetica">The book value of the Company&#146;s
Class A and Class B Shares was $20.84 at June 30, 2003 compared
to $19.58 at June 30, 2002, an increase of approximately 6%,
based on total outstanding shares of </font><font face="Arial">12,821,243
</font><font face="Helvetica">and </font><font face="Arial">12,517,957</font><font
face="Helvetica">, respectively.</font></p>

<p><font face="Helvetica"><b>Contractual and Contingent
Obligations</b></font></p>

<p><font face="Helvetica">The Company has contractual obligations
to make future payments in connection with non-cancelable lease
obligations, certain retirement plans and debt assumed upon the
acquisition of Josephthal. Additional disclosure relating to the
Company&#146;s commitments appears in note 8 to the consolidated
financial statements.</font></p>

<p><font face="Helvetica">The following table sets forth these
contractual and contingent commitments as at June 30, 2003. </font></p>

<p><font face="Helvetica">Contractual Obligations (In millions of
dollars)</font></p>

<table border="0" cellpadding="0" width="607">
    <tr>
        <td valign="top" width="28%">&nbsp;</td>
        <td valign="top" width="10%"><p align="right"><font
        face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">2004</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">2005</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">2006</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">2007</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">Thereafter</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">Total</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="28%"><font face="Helvetica">Minimum
        rentals</font></td>
        <td valign="top" width="10%"><p align="right"><font
        face="Helvetica">$12</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$22</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$20</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$18</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$17</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">$63</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$152</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="28%"><font face="Helvetica">Supplemental
        Executive Retirement Plan</font></td>
        <td valign="top" width="10%"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">1</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">1</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="28%"><font face="Helvetica">Assumed
        Josephthal notes</font></td>
        <td valign="top" width="10%"><p align="right"><font
        face="Helvetica">2</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">4</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">-</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">1</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">7</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="28%"><font face="Helvetica">Total</font></td>
        <td valign="top" width="10%"><p align="right"><font
        face="Helvetica">$14</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$26</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$20</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$18</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$17</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">$65</font></p>
        </td>
        <td valign="top" width="9%"><p align="right"><font
        face="Helvetica">$160</font></p>
        </td>
    </tr>
</table>

<p><font face="Helvetica"></font>&nbsp;</p>

<p><font face="Helvetica"><b>Newly Issued Accounting Standards</b></font></p>

<p><font face="Helvetica">The Financial Accounting Standards
Board issued SFAS No. 146, &quot;Accounting for Costs Associated
with Exit or Disposal Activities&quot;, FIN No. 45,
&quot;Guarantor&#146;s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others&quot;, FIN No. 46, &quot;Consolidation of Variable
Interest Entities&quot;, SFAS No. 149, &quot;Amendment of
Statement 133 on Derivative Instruments and Hedging
Activities&quot;, and SFAS No. 150, &quot;Accounting for Certain
Financial Instruments with Characteristics of both Liabilities
and Equity&quot;. The Company has reviewed these statements and
interpretations and does not expect their adoption to have a
material impact on its financial results. The Company has
reviewed SFAS No. 148, &quot;Accounting for Stock-Based
Compensation &#150; Transition and Disclosure&quot; and has
adopted the disclosure provisions, but does not intend to adopt
the other provisions of this standard in fiscal 2003.</font></p>

<p><font face="Helvetica"></font>&nbsp;</p>

<p><font face="Helvetica"><b>Factors Affecting
&quot;Forward-Looking Statements&quot;</b></font></p>

<p><font face="Helvetica">This report 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 Securities Exchange Act
of 1934, as amended (the &quot;Exchange Act&quot;). These
forward-looking statements relate to anticipated financial
performance, future revenues or earnings, the results of
litigation, 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 or economic developments affecting the
litigation experience of the securities industry or the Company,
(x) changes in federal and state tax laws which could affect the
popularity of products and services sold by the Company, (xi) the
effectiveness of efforts to reduce costs and eliminate overlap,
(xii) war and nuclear confrontation and (xiii) corporate
governance issues. 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.</font></p>

<p><font face="Helvetica"><b></b></font>&nbsp;</p>

<p><font face="Helvetica"><b>ITEM 3. Quantitative and Qualitative
Disclosures About Market Risk</b></font></p>

<p><font face="Arial"><b>Risk Management</b></font></p>

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

<p><font face="Arial">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.</font></p>

<p><font face="Arial"><b>Market Risk</b></font></p>

<p><font face="Arial">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. </font></p>

<p><font face="Arial"><b>Operational Risk</b></font></p>

<p><font face="Arial">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. The Company has procedures designed to
assess and monitor counterparty risk. For a discussion of funding
risk, see &#145;Liquidity and Capital Resources&#146;, above.</font></p>

<p><font face="Arial"><b>Credit Risk</b></font></p>

<p><font face="Arial">Credit risk arises from non-performance by
trading counterparties, customers and issuers of debt securities
held in the Company&#146;s inventory. The Company manages this
risk by imposing and monitoring position limits, regularly
reviewing trading counterparties, monitoring and limiting
securities concentrations, marking positions to market on a daily
basis to evaluate and establish the adequacy of collateral, and,
with respect to trading counterparties, conducting business
through clearing corporations which guarantee performance. </font></p>

<p><font face="Arial"><b>Legal and Regulatory Risk</b></font></p>

<p><font face="Arial">Legal and regulatory risk includes the risk
of non-compliance with applicable legal and regulatory
requirements. The Company is subject to extensive regulation in
the different jurisdictions in which it conducts its activities.
The Company has comprehensive procedures for addressing issues
such as regulatory capital requirements, sales and trading
practices, use of and safekeeping of customer funds and
securities, granting of credit, collection activities, money
laundering, and record keeping.</font></p>

<p><font face="Arial"><b>Value-at-Risk </b></font></p>

<p><font face="Arial">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 limits and concentration limits.</font></p>

<p><font face="Arial"></font>&nbsp;</p>

<p><font face="Helvetica">At June 30, 2003 and 2002, the
Company&#146;s value-at-risk for each component of market risk
was as follows:</font></p>
<div align="center"><center>

<table border="0" cellpadding="0" width="414">
    <tr>
        <td valign="top" width="70%">&nbsp;</td>
        <td valign="top" colspan="2" width="30%"><p
        align="center"><font face="Helvetica">June 30,</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="70%">&nbsp;</td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">2003</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">2002</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="70%"><font size="2"
        face="Helvetica">Expressed in thousands of dollars</font></td>
        <td valign="top" width="13%">&nbsp;</td>
        <td valign="top" width="17%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="70%"><font face="Helvetica">Interest
        rate risk</font></td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">$174</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">$175</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="70%"><font face="Helvetica">Equity
        price risk</font></td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">387</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">165</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="70%"><font face="Helvetica">Diversification
        benefit</font></td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">(86)</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">(93)</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="70%">&nbsp;</td>
        <td valign="top" width="13%">&nbsp;</td>
        <td valign="top" width="17%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="70%"><font face="Helvetica">Total</font></td>
        <td valign="top" width="13%"><p align="right"><font
        face="Helvetica">$475</font></p>
        </td>
        <td valign="top" width="17%"><p align="right"><font
        face="Helvetica">$247</font></p>
        </td>
    </tr>
</table>
</center></div>

<p><font face="Helvetica"></font>&nbsp;</p>

<p><font face="Helvetica">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 in 2003 from those
reported in 2002 reflect changes in the size and composition of
the Company&#146;s trading portfolio at June 30, 2003 compared to
June 30, 2002, which include a larger position in equities. At
June 30, 2003 the Company was not holding any hedging positions,
thus reducing the diversification benefit compared to the
comparable period in 2002 when it did hold such positions. At
June 30, 2003, the Company held securities in the approximate
amount of $14,006,000, which are related to deferred compensation
liabilities to the Oppenheimer &amp; Co. division&#146;s
employees and which bear additional value-at-risk of
approximately $222,000.</font></p>

<p><font face="Helvetica">The value-at-risk estimate has
limitations that should be considered in evaluating the
Company&#146;s potential future losses based on the year-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. Likewise,
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.</font></p>

<p><font face="Helvetica"><b>ITEM 4. Controls and Procedures </b></font></p>

<p><font face="Helvetica"><b>Disclosure Controls and Procedures</b></font></p>

<p><font face="Helvetica">The Company&#146;s management, with the
participation of the Company&#146;s Chief Executive Officer and
Chief Financial Officer, has evaluated the effectiveness of the
Company&#146;s disclosure controls and procedures (as such term
is detailed in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the &quot;Exchange Act&quot;))
as of the end of the period covered by this report. Based on such
evaluation, the Company&#146;s Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such
period, the Company&#146;s disclosure controls and procedures are
effective in recording, processing, summarizing and reporting, on
a timely basis, information required to be disclosed by the
Company in the reports it files or submits under the Exchange
Act. </font></p>

<p><font face="Helvetica"><b>Internal Control Over Financial
Reporting</b></font></p>

<p><font face="Helvetica">There have not been any changes in the
Company&#146;s internal control over financial reporting (as such
term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal quarter to which this report
relates that have materially affected, or are reasonably likely
to materially affect, the Company&#146;s internal control over
financial reporting. </font></p>

<p><font face="Helvetica"></font>&nbsp;</p>

<p align="center"><font face="Helvetica"><b>PART II</b></font></p>

<p align="center"><font face="Helvetica"><b>OTHER INFORMATION</b></font></p>

<p><font size="3" face="Helvetica"><b>ITEM 1. Legal Proceedings</b></font></p>

<blockquote>
    <blockquote>
        <p><font face="Helvetica">The Company's subsidiaries are
        parties to legal proceedings incidental to their
        respective businesses. In management's opinion, there are
        no legal proceedings to which the Company or its
        subsidiaries are parties or to which any of their
        respective properties are subject which are material to
        the Company's financial position. The total number of
        cases in which the Company is involved and the related
        claims have increased due to acquisitions made by the
        Company in 2001. The potential significance of legal
        matters on the Company's future operating results depends
        on the level of future results of operations as well as
        the timing and ultimate outcome of such legal matters.</font></p>
        <p><font face="Helvetica">On June 4, 2003 a New York
        Stock Exchange (&quot;NYSE&quot;) Hearing Panel accepted
        a Stipulation of Facts and Consent to Penalty entered
        into between the NYSE, Fahnestock and Mr. A.G. Lowenthal,
        (with neither Fahnestock nor Mr. Lowenthal admitting or
        denying guilt) that resulted in the imposition of a
        $500,000 fine against Fahnestock and related censures.
        This was related to the transfer and conversion of
        networked client mutual fund positions of First of
        Michigan Corporation, following its acquisition by
        Fahnestock in July 1997. As part of the settlement
        reached with the NYSE, Fahnestock has agreed (i) to
        retain an independent consultant acceptable to the NYSE
        to review Fahnestock's supervisory positions in relation
        to its financial and operational areas generally and to
        the violations described in the Stipulation and consent,
        and (ii) to adopt and implement recommendations made by
        the independent consultant. Further, Fahnestock has
        agreed to assign an experienced person, acceptable to the
        NYSE, who will have responsibility to coordinate
        operational, net capital and other regulatory aspects of
        future acquisitions.</font></p>
    </blockquote>
</blockquote>

<p><font size="3" face="Helvetica"><b>ITEM 2. Changes in
Securities and Use of Proceeds</b></font></p>

<p><font face="Helvetica">Not applicable</font></p>

<p><font size="3" face="Helvetica"><b>ITEM 3. Defaults Upon
Senior Securities</b></font></p>

<p><font face="Helvetica">Not applicable</font></p>

<blockquote>
    <blockquote>
        <blockquote>
            <blockquote>
                <p><font size="3" face="Helvetica"><b>ITEM 4.
                Submission of Matters to a Vote of
                Security-Holders</b></font></p>
            </blockquote>
        </blockquote>
        <p><font face="Helvetica">At the Annual and Special
        Meeting of Shareholders of the Company held on May 12,
        2003, the holders of Class B voting shares of the Company
        voted in favor of (1) appointing PricewaterhouseCoopers
        LLP as auditors of the Company and authorizing the
        directors to fix their remuneration, (2) an amendment to
        the Articles of the Company to change the name of the
        Company to Oppenheimer Holdings Inc. (to take effect
        later in the year), (3) an amendment to the Articles of
        the Company to change the number of directors of the
        Company to a minimum of five and a maximum of 15
        directors, (4) confirming an amendment to the By-Laws of
        the Company to provide that the number of directors of
        the Company shall be the number provided for in the
        Articles of the Company, (5) electing nine directors, (6)
        approving the conditional issue of 45,000 Class A Shares
        to certain key employees, and (7) approving the issue of
        200,000 Class A Shares to Trustees of the Fahnestock
        &amp; Co. Inc. 401(k) Plan.</font></p>
        <p><font face="Helvetica">In addition, the holders of
        Class A Shares and Class B Shares, voting together, voted
        in favor of the conversion of the E.A. Viner
        International Co. Convertible Debenture in the principal
        amount of U.S.$90,841,542 to a Second Variable Rate
        Exchangeable Debenture Due 2013.</font></p>
        <p><font face="Helvetica">Proxies received from the
        holders of Class B and Class A Shares directed that the
        shares represented by such proxies be voted as set forth
        below. Resolutions numbers 1 through 7 below were voted
        on by holders of Class B voting shares only and
        resolution number 8 by the holders of Class A non-voting
        and Class B voting shares voting together.</font></p>
    </blockquote>
</blockquote>

<table border="0" cellpadding="0" width="583">
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%">&nbsp;</td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">For</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">Against/Withheld</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%">&nbsp;</td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%"><font size="3"
        face="Helvetica">1.</font></td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Appointment of Auditors</font></td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">96,317</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">nil</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%">&nbsp;</td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%"><font size="3"
        face="Helvetica">2.</font></td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Amendment of Articles to change name</font></td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">96,317</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">nil</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%">&nbsp;</td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%"><font size="3"
        face="Helvetica">3.</font></td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Amendment of Articles to change number
        of directors</font></td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">96,313</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">4</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%">&nbsp;</td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%"><font size="3"
        face="Helvetica">4.</font></td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Amendment of By-Laws</font></td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">96,317</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">nil</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%">&nbsp;</td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%"><font size="3"
        face="Helvetica">5.</font></td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Election of Directors:</font></td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">96,317</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">nil</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">J.L. Bitove</font><p><font size="3"
        face="Helvetica">R. Crystal</font></p>
        <p><font size="3" face="Helvetica">A.G. Lowenthal</font></p>
        <p><font size="3" face="Helvetica">K.W. McArthur</font></p>
        <p><font size="3" face="Helvetica">A. Molestina</font></p>
        <p><font size="3" face="Helvetica">A.W. Oughtred</font></p>
        <p><font size="3" face="Helvetica">E.K. Roberts</font></p>
        <p><font size="3" face="Helvetica">R. Venn</font></p>
        <p><font size="3" face="Helvetica">B. Winberg</font></p>
        </td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%">&nbsp;</td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%"><font size="3"
        face="Helvetica">6.</font></td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Conditional Issue of Class A non-voting
        shares to employees</font></td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">96,313</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">4</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%">&nbsp;</td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%"><font size="3"
        face="Helvetica">7.</font></td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Issue of Class A non-voting shares to
        401(k) Plan</font></td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">96,313</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">4</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%">&nbsp;</td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%"><font size="3"
        face="Helvetica">8.</font></td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Conversion of Interim Debenture</font></td>
        <td valign="top" width="26%">&nbsp;</td>
        <td valign="top" width="27%">&nbsp;</td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Class B voting shares</font></td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">96,317</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">nil</font></p>
        </td>
    </tr>
    <tr>
        <td valign="top" width="8%">&nbsp;</td>
        <td valign="top" width="38%"><font size="3"
        face="Helvetica">Class A non-voting shares</font></td>
        <td valign="top" width="26%"><p align="center"><font
        size="3" face="Helvetica">4,337,601</font></p>
        </td>
        <td valign="top" width="27%"><p align="center"><font
        size="3" face="Helvetica">250</font></p>
        </td>
    </tr>
</table>

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

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

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

<p><font face="Helvetica"><b>ITEM 5. Other Information</b></font></p>

<p><font face="Helvetica"><b>CHANGE OF NAME</b></font></p>

<p><font face="Helvetica">On May 12, 2003, at the Annual and
Special Meeting of Shareholders, shareholders voted in favor of
changing the name of the Company to OPPENHEIMER HOLDINGS INC.
This change will be effective September 2, 2003. </font></p>

<p><font face="Helvetica">In addition, on September 2, 2003, the
name of Fahnestock &amp; Co. Inc. is being changed to Oppenheimer
&amp; Co. Inc.</font></p>

<p><font face="Helvetica"><b>CHANGE OF TRADING SYMBOL</b></font></p>

<p><font face="Helvetica">Also effective on September 2, 2003,
the trading symbol for the Company&#146;s Class A non-voting
shares on both the New York and Toronto Stock Exchanges will be
changed to </font><font size="4" face="Helvetica">OPY</font><font
face="Helvetica">.</font></p>

<p><font face="Helvetica"><b>CHANGE OF TRANSFER AGENT AND
REGISTRAR</b></font></p>

<p><font face="Helvetica">Effective September 1, 2003, CIBC
Mellon Trust Company of Toronto and Mellon Investor Services, LLC
of New York will replace Computershare Investor Services Inc. as
Transfer Agent and Registrar for the Company&#146;s Class A and
Class B Shares.</font></p>

<p><font face="Helvetica"><b>ITEM 6. Exhibits and Reports on Form
8-K</b></font></p>

<blockquote>
    <blockquote>
        <blockquote>
            <p><font face="Helvetica">(a) Exhibits </font></p>
        </blockquote>
        <p><font face="Helvetica">31.1 Certification of Albert G.
        Lowenthal </font></p>
        <p><font face="Helvetica">31.2 Certification of Elaine K.
        Roberts</font></p>
        <p><font face="Helvetica">32.1 Certification of Albert G.
        Lowenthal and Elaine K. Roberts</font></p>
        <p><font face="Helvetica"></font>&nbsp;</p>
        <blockquote>
            <p><font face="Helvetica">(b) Reports on Form 8-K </font></p>
            <p><font face="Helvetica">Amendment No. 2 to Form
            8-K, filed June 27, 2003 &#150; reporting pursuant to
            Item 2 of such Form, the completion of the
            acquisition of the U.S. Asset Management Division of
            CIBC World Markets, a subsidiary of Canadian Imperial
            Bank of Commerce.</font></p>
            <p><font face="Helvetica"></font>&nbsp;</p>
            <p><font face="Helvetica"></font>&nbsp;</p>
        </blockquote>
    </blockquote>
</blockquote>

<p align="center"><font face="Helvetica"><b>SIGNATURES</b></font></p>

<p><font face="Helvetica">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 11th day of August, 2003.</font></p>

<p><font face="Helvetica">FAHNESTOCK VINER HOLDINGS INC.</font></p>

<p><font face="Helvetica"></font>&nbsp;</p>

<p><font face="Helvetica">By: &quot;A.G. Lowenthal&quot;</font></p>

<p><font face="Helvetica">A.G.Lowenthal, Chairman and Chief
Executive Officer</font></p>

<p><font face="Helvetica">(Principal Executive Officer)</font></p>

<p><font face="Helvetica"></font>&nbsp;</p>

<p><font face="Helvetica">By: &quot;E.K. Roberts&quot;</font></p>

<p><font face="Helvetica">E.K.Roberts, President, Treasurer and
Chief Financial Officer</font></p>

<blockquote>
    <blockquote>
        <blockquote>
            <blockquote>
                <p><font face="Helvetica">(Principal Financial
                Officer) </font></p>
            </blockquote>
        </blockquote>
    </blockquote>
</blockquote>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>ex312603.htm
<DESCRIPTION>CERTIFICATION OF E.K. ROBERTS
<TEXT>
<!DOCTYPE HTML PUBLIC "-//IETF//DTD HTML//EN">
<html>


<body bgcolor="#FFFFFF">

<p align="right"><font size="3" face="Helvetica"><b>EXHIBIT 31.2</b></font></p>

<p align="center"><font size="3" face="Helvetica"><b>CERTIFICATION</b></font></p>

<p><font size="2" face="Helvetica">I, Elaine K. Roberts, certify
that:</font></p>

<p><font size="2" face="Helvetica">1. I have reviewed this
quarterly report on Form 10-Q of Fahnestock Viner Holdings, Inc.</font></p>

<p><font size="2" face="Helvetica">2. Based on my knowledge, this
report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by
this report;</font></p>

<p><font size="2" face="Helvetica">3. Based on my knowledge, the
financial statements, and other financial information included in
this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;</font></p>

<p><font size="2" face="Helvetica">4. The registrant&#146;s other
certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and we have:</font></p>

<p><font size="2" face="Helvetica">(a) Designed such disclosure
controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
report is being prepared; </font></p>

<p><font size="2" face="Helvetica">(b) Evaluated the
effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and </font></p>

<p><font size="2" face="Helvetica">(c) Disclosed in this report
any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s
most recent fiscal quarter (the registrant&#146;s fourth fiscal
quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant&#146;s internal control over financial reporting; </font></p>

<p><font size="2" face="Helvetica">5. The registrant&#146;s other
certifying officers and I have disclosed, based on our most
recent evaluation of internal control over financial reporting,
to the registrant&#146;s auditors and the audit committee of the
registrant&#146;s board of directors (or persons performing the
equivalent functions):</font></p>

<p><font size="2" face="Helvetica">(a) All significant
deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably
likely to adversely affect the registrant&#146;s ability to
record, process, summarize and report financial information; and </font></p>

<p><font size="2" face="Helvetica">b) Any fraud, whether or not
material, that involves management or other employees who have a
significant role in the registrant&#146;s internal control over
financial reporting. </font></p>

<p><font size="2" face="Helvetica">Date: August 11, 2003
&quot;E.K. Roberts&quot; </font></p>

<blockquote>
    <blockquote>
        <blockquote>
            <blockquote>
                <blockquote>
                    <blockquote>
                        <blockquote>
                            <blockquote>
                                <blockquote>
                                    <blockquote>
                                        <blockquote>
                                        <blockquote>
                                        <blockquote>
                                        <p><font size="2"
                                        face="Helvetica">Elaine
                                        K. Roberts<br>
                                        Chief Financial Officer </font></p>
                                        </blockquote>
                                        </blockquote>
                                        </blockquote>
                                    </blockquote>
                                </blockquote>
                            </blockquote>
                        </blockquote>
                    </blockquote>
                </blockquote>
            </blockquote>
        </blockquote>
    </blockquote>
</blockquote>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>3
<FILENAME>ex321603.htm
<TEXT>
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<body bgcolor="#FFFFFF">

<p align="right"><font size="2" face="Helvetica"><b>Exhibit 32.1 </b></font></p>

<p align="center"><font size="2" face="Helvetica"><b>Certification
Pursuant to </b></font></p>

<p align="center"><font size="2" face="Helvetica"><b>18 U.S.C.
Section 1350, </b></font></p>

<p align="center"><font size="2" face="Helvetica"><b>As Adopted
Pursuant to </b></font></p>

<p align="center"><font size="2" face="Helvetica"><b>Section 906
of the Sarbanes-Oxley Act of 2002 </b></font></p>

<p><font size="2" face="Helvetica">In connection with the
Quarterly Report on Form 10-Q of Fahnestock Viner Holdings Inc.
(the &quot;Company&quot;) for the quarterly period ended June 30,
2003, as filed with the Securities and Exchange Commission on the
date hereof (the &quot;Report&quot;), Albert G. Lowenthal,
Chairman and Chief Executive Officer of the Company and Elaine K.
Roberts, President and Chief Financial Officer of the Company,
each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to
the best of each such officer&#146;s knowledge:</font></p>

<blockquote>
    <p><font size="2" face="Helvetica">(1) The Report fully
    complies with the requirements of Section 13(a) or 15(d) of
    the Securities Exchange Act of 1934; and</font></p>
</blockquote>

<blockquote>
    <p><font size="2" face="Helvetica">(2) The information
    contained in the Report fairly presents, in all material
    respects, the financial condition and results of operations
    of the Company for the period specified.</font></p>
    <p><font size="2" face="Helvetica">Signed at the City of
    Toronto, Ontario, Canada, this 11th day of August, 2003.</font></p>
</blockquote>

<table border="0" cellpadding="7" cellspacing="0" width="271">
    <tr>
        <td valign="top"><font size="2" face="Helvetica"><u>&quot;A.
        G. Lowenthal&quot;</u></font></td>
    </tr>
    <tr>
        <td valign="top"><font size="2" face="Helvetica">Albert
        G. Lowenthal</font></td>
    </tr>
    <tr>
        <td valign="top"><font size="2" face="Helvetica">Chairman
        and Chief Executive Officer</font></td>
    </tr>
</table>

<table border="0" cellpadding="7" cellspacing="0" width="271">
    <tr>
        <td valign="top"><font size="2" face="Helvetica"><u>&quot;E.
        K. Roberts&quot;</u></font></td>
    </tr>
    <tr>
        <td valign="top"><font size="2" face="Helvetica">Elaine
        K. Roberts</font></td>
    </tr>
    <tr>
        <td valign="top"><font size="2" face="Helvetica">President
        and Chief Financial Officer</font></td>
    </tr>
</table>

<p><font size="2" face="Helvetica"></font>&nbsp;</p>

<p><font size="2" face="Helvetica">This certification accompanies
the Report pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 and shall not, except to extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Company for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended.</font></p>

<p><font size="2" face="Helvetica">A signed original of this
written statement required by Section 906 of the Sarbanes-Oxley
Act of 2002 has been provided to the Company and will be retained
by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.</font></p>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>ex311603.htm
<DESCRIPTION>CERTIFICATION OF A.G. LOWENTHAL
<TEXT>
<!DOCTYPE HTML PUBLIC "-//IETF//DTD HTML//EN">
<html>


<body bgcolor="#FFFFFF">

<p align="right"><font size="3" face="Helvetica"><b>EXHIBIT 31.1</b></font></p>

<p align="center"><font size="3" face="Helvetica"><b>CERTIFICATION</b></font></p>

<p><font size="2" face="Helvetica">I, Albert G. Lowenthal,
certify that:</font></p>

<p><font size="2" face="Helvetica">1. I have reviewed this
quarterly report on Form 10-Q of Fahnestock Viner Holdings, Inc.</font></p>

<p><font size="2" face="Helvetica">2. Based on my knowledge, this
report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by
this report;</font></p>

<p><font size="2" face="Helvetica">3. Based on my knowledge, the
financial statements, and other financial information included in
this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;</font></p>

<p><font size="2" face="Helvetica">4. The registrant&#146;s other
certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and we have:</font></p>

<p><font size="2" face="Helvetica">(a) Designed such disclosure
controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
report is being prepared; </font></p>

<p><font size="2" face="Helvetica">(b) Evaluated the
effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and </font></p>

<p><font size="2" face="Helvetica">(c) Disclosed in this report
any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s
most recent fiscal quarter (the registrant&#146;s fourth fiscal
quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant&#146;s internal control over financial reporting; </font></p>

<p><font size="2" face="Helvetica">5. The registrant&#146;s other
certifying officers and I have disclosed, based on our most
recent evaluation of internal control over financial reporting,
to the registrant&#146;s auditors and the audit committee of the
registrant&#146;s board of directors (or persons performing the
equivalent functions):</font></p>

<p><font size="2" face="Helvetica">(a) All significant
deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably
likely to adversely affect the registrant&#146;s ability to
record, process, summarize and report financial information; and </font></p>

<p><font size="2" face="Helvetica">b) Any fraud, whether or not
material, that involves management or other employees who have a
significant role in the registrant&#146;s internal control over
financial reporting. </font></p>

<p><font size="2" face="Helvetica">Date: August 11, 2003
&quot;A.G. Lowenthal&quot;</font></p>

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                                        <p><font size="2"
                                        face="Helvetica">Albert
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