20 . RELATED PARTY TRANSACTIONS

The Company has identified the following related party transactions for the six and three months ended June 30, 2013 and 2012. The transactions are listed by related party and, unless otherwise noted in the text of the description, the amounts are disclosed in the tables at the end of this section.

A. Transactions between Star Asia Manager and the Company

Star Asia Manager serves as external manager of Star Asia and Star Asia SPV (see D-1 and D-4 listed below) and the Company owned 50% of Star Asia Manager prior to March 1, 2013. Following the Star Asia Manager Repurchase Transaction, the Company acquired 100% control of Star Asia Manager and included Star Asia Manager in its consolidated financial statements. See note 4 for a description of the Star Asia Manager Repurchase Transaction. Prior to March 1, 2013, Star Asia Manager had been identified as a related party because it was an equity method investee of the Company. The Company had recognized its share of the income or loss of Star Asia Manager as income or loss from equity method affiliates in the consolidated statements of operations during the pre-acquisition period. Income or loss recognized under the equity method is disclosed in the table at the end of this section.

B. Cohen Bros. Financial, LLC (“CBF”)

CBF has been identified as a related party because (i) CBF is a non-controlling interest of the Company and (ii) CBF is wholly owned by the Chairman and Chief Executive Officer of the Company.

Beginning in October 2008, the Company began receiving a monthly advisory fee for consulting services provided by the Company to CBF. The Company stopped providing these services and stopped receiving this fee as of March 31, 2012. The fee was recognized as a component of asset management revenue in the consolidated statements of operations. This fee is disclosed as management fee revenue in the tables at the end of this section.

C. The Bancorp, Inc.

The Bancorp, Inc. (“TBBK”) is identified as a related party because TBBK’s Chairman is the Company’s Chairman and Chief Executive Officer.

TBBK maintained deposits for the Company in the amount of $72 and $36 as of June 30, 2013 and December 31, 2012, respectively. These amounts are not disclosed in the tables at the end of this section.

As part of the Company’s broker-dealer operations, the Company from time to time purchases securities from third parties and sells those securities to TBBK. The Company may purchase securities from TBBK and ultimately sell those securities to third parties. In either of the cases listed above, the Company includes the trading revenue earned (i.e. the gain or loss realized, or commission earned) by the Company for the entire transaction in the amounts disclosed as part of net trading in the table at the end of this section.

From time to time, the Company will enter into repurchase agreements with TBBK as its counterparty. As of June 30, 2013, the Company had a repurchase agreement in the amount of $40,252 with TBBK as its counterparty. This is included as a component of securities sold under agreement to repurchase in the consolidated balance sheet. The Company incurred interest expense related to repurchase agreements with TBBK as its counterparty in the amount of $93 and $74 for the six and three months ended June 30, 2013, respectively, which was included as a component of net trading revenue in the Company’s consolidated statements of operations. These amounts are not disclosed in the tables at the end this section.

D. Investment Vehicles and Other

The following are identified as related parties. Amounts with respect to the transactions identified below are summarized in a table at the end of this section.

1. Star Asia invests primarily in Asian commercial real estate structured finance products, including CMBS, corporate debt of REITs and real estate operating companies, B notes, mezzanine loans and other commercial real estate fixed income investments. As of June 30, 2013 and December 31, 2012, the Company directly owned approximately 28% of Star Asia’s outstanding shares. Star Asia has been identified as a related party because in the absence of the fair value option of FASB ASC 825, Star Asia would be treated as an equity method affiliate, and because the Chairman and Chief Executive Officer of the Company is a member of Star Asia’s board of directors. The Company has an investment in Star Asia. The Company, through Star Asia Manager, has an asset management contract with Star Asia. Dividends received from the Company’s investment in Star Asia are disclosed as part of dividend income in the tables at the end of this section. Gains or losses recognized from its investment are disclosed as part of gain / (loss) in the tables at the end of this section. Amounts earned from the management contract are disclosed as part of management fee revenue in the tables at the end of this section.

2. EuroDekania invests primarily in hybrid capital securities of European bank and insurance companies, CMBS, RMBS and widely syndicated leverage loans. EuroDekania’s investments are denominated in Euros or British Pounds Sterling. As of June 30, 2013 and December 31, 2012, the Company directly owned approximately 10% of EuroDekania’s outstanding shares. EuroDekania has been identified as a related party because the Chairman and Chief Executive Officer of the Company is a member of EuroDekania’s board of directors. The Company has a management contract with and an investment in EuroDekania. Dividends received from that investment are disclosed as part of dividend income in the tables at the end of this section. Gains or losses recognized from its investment are disclosed as part of the gain / (loss) in the tables at the end of this section. Amounts earned from its management contract are disclosed as part of management fee revenue in the tables at the end of this section.

3. The Deep Value GP and Deep Value GP II served as the general partners for the Deep Value funds. The Deep Value GP and the Deep Value GP II are collectively referred to as the “Deep Value GPs.” The Company owns 50% of the Deep Value GP and 40% of the Deep Value GP II. The Deep Value GP and the Deep Value GP II have been identified as related parties because the Deep Value GPs are equity method affiliates of the Company. Income or loss recognized under the equity method is disclosed in the table at the end of this section.

4. Star Asia SPV is a Delaware limited liability company formed in 2010. It was formed to create a pool of assets that would provide collateral to investors who participated in Star Asia’s 2010 rights offering. The investors in Star Asia’s rights offering also received equity interests in Star Asia SPV. Star Asia SPV purchased certain assets from Star Asia and the equity interest holders of Star Asia SPV receive investment returns on the assets held in the Star Asia SPV up to an agreed upon maximum. Returns above that agreed upon maximum are remitted back to Star Asia. The Company directly owned approximately 31% of Star Asia SPV’s outstanding shares as of December 31, 2012. During the second quarter of 2013, the Company received its investment return up to an agreed upon maximum from Star Asia SPV and the Company no longer has an ownership interest in the entity. Star Asia SPV has been identified as a related party because it was an equity method investee of the Company. Income or loss recognized under the equity method is disclosed in the table at the end of this section.

5. Duart Capital is a Delaware limited liability company formed in 2010. The Company directly owned 20% of Duart Capital’s outstanding equity interests as of June 30, 2013 and December 31, 2012. Duart Capital has been identified as a related party because it is an equity method investee of the Company. Duart Capital also serves as the investment manager of the Duart Fund, which is a specialized deep value, public equity securities fund. The Company did not elect the fair value option for its investment in Duart Capital. The Company did not recognize any income or loss under the equity method for the six and three months ended June 30, 2013 and 2012.

6. Star Asia Opportunity is a Delaware limited liability company formed in July 2011 to partially finance the acquisition of seven real estate properties in Japan. As of June 30, 2013 and December 31, 2012, the Company directly owned approximately 28% of Star Asia Opportunity’s outstanding equity interests. Star Asia Opportunity has been identified as a related party because it is an equity method investee of the Company. The Company recognizes its share of the income or loss of Star Asia Opportunity as income or loss from equity method affiliates in the consolidated statements of operations. Income or loss recognized under the equity method is disclosed in the table at the end of this section.

7. Star Asia Capital Management serves as the external manager of Star Asia Opportunity (see D-6 listed above) and the Company owned 33% of Star Asia Capital Management as of June 30, 2013 and December 31, 2012. Star Asia Capital Management has been identified as a related party because it is an equity method investee of the Company. The Company recognizes its share of the income or loss of Star Asia Capital Management as income or loss from equity method affiliates in the consolidated statements of operations. Income or loss recognized under the equity method is disclosed in the table at the end of this section.

8. The Star Asia Special Situations Fund is a closed-end investment fund that primarily invests in real estate and securities backed by real estate in Japan and does not offer investor redemptions. As of June 30, 2013 and December 31, 2012, the Company owned approximately 3% and 6%, respectively, of the Star Asia Special Situations Fund. The Star Asia Special Situations Fund has been identified as a related party because in the absence of the fair value option of FASB ASC 825, the Company’s investment in the Star Asia Special Situations Fund would be treated as an equity method affiliate of the Company. Dividends received from that investment are disclosed as part of dividend income in the tables at the end of this section. Gains and losses recognized from its investment are disclosed as part of gain / (loss) in the tables at the end of this section.

9. SAA Manager serves as the external manager of the Star Asia Special Situations Fund and the Company owned 33% of SAA Manager as of June 30, 2013 and December 31, 2012. SAA Manager has been identified as a related party because it is an equity method investee of the Company. The Company did not elect the fair value option for its investment in SAA Manager. Income or loss recognized under the equity method is disclosed in the table at the end of this section.

10. SAP GP serves as the general partner for the Star Asia Special Situations Fund and the Company owned 33% of SAP GP as of June 30, 2013 and December 31, 2012. SAP GP has been identified as a related party because it is an equity method investee of the Company. The Company did not elect the fair value option for its investment in SAP GP. Income or loss recognized under the equity method is disclosed in the table at the end of this section. Since its inception during the fourth quarter of 2012 and for the six and three months ended June 30, 2013, the Company had not made an investment or recognized any income or loss under the equity method.

The following tables display the routine intercompany transactions recognized in the statements of operations from the identified related parties that are described above.



RELATED PARTY TRANSACTIONS
Six Months Ended June 30, 2013
(Dollars in Thousands)

					Principal transaction and other income
		Management fee revenue		Net trading		Dividend income and other		Gain / (loss)		Income / (loss) from equity method affiliates
TBBK	$	-	$	401	$	-	$	-	$	-
Star Asia		1,069		-		-		(9,234)		-
Star Asia Manager (1)		-		-		-		-		158
Star Asia SPV		-		-		-		-		1,287
Star Asia Opportunity		-		-		-		-		(5)
Star Asia Capital Management		-		-		-		-		71
Star Asia Special Situations Fund		-		-		-		(30)		-
SAA Manager		-		-		-		-		109
EuroDekania		-		-		395		(14)		-
Deep Value GPs		-		-		-		-		(6)
	$	1,069	$	401	$	395	$	(9,278)	$	1,614

(1) Beginning March 1, 2013, Star Asia Manager was consolidated by the Company. Prior to that, it was treated as an equity method investment. See note A above.



RELATED PARTY TRANSACTIONS
Six Months Ended June 30, 2012
(Dollars in Thousands)

					Principal transaction and other income
		Management fee revenue		Net trading		Dividend income and other		Gain / (Loss)		Income / (loss) from equity method affiliates
CBF	$	64	$	-	$	-	$	-	$	-
TBBK		-		71		-		-		-
Star Asia		-		-		-		(5,059)		-
Star Asia Manager (1)		-		-		-		-		580
Star Asia SPV		-		-		-		-		724
Star Asia Opportunity		-		-		-		-		619
Star Asia Capital Management		-		-		-		-		130
EuroDekania		139		-		183		(267)		-
Deep Value GPs		-		-		-		-		(11)
	$	203	$	71	$	183	$	(5,326)	$	2,042

(1) Beginning March 1, 2013, Star Asia Manager was consolidated by the Company. Prior to that, it was treated as an equity method investment. See note A above.



RELATED PARTY TRANSACTIONS
Three Months Ended June 30, 2013
(Dollars in Thousands)

					Principal transaction and other income
		Management fee revenue		Net trading		Dividend income and other		Gain / (loss)		Income / (loss) from equity method affiliates
TBBK	$	-	$	375	$	-	$	-	$	-
Star Asia		792		-		-		(3,201)		-
Star Asia SPV		-		-		-		-		(27)
Star Asia Opportunity		-		-		-		-		1
Star Asia Capital Management		-		-		-		-		37
Star Asia Special Situations Fund		-		-		-		(73)		-
SAA Manager		-		-		-		-		86
EuroDekania		-		-		395		(354)		-
Deep Value GPs		-		-		-		-		(2)
	$	792	$	375	$	395	$	(3,628)	$	95



RELATED PARTY TRANSACTIONS
Three Months Ended June 30, 2012
(Dollars in Thousands)

					Principal transaction and other income
		Management fee revenue		Net trading		Dividend income and other		Gain / (loss)		Income / (loss) from equity method affiliates
TBBK	$	-	$	36	$	-	$	-	$	-
Star Asia		-		-		-		181		-
Star Asia Manager (1)		-		-		-		-		306
Star Asia SPV		-		-		-		-		245
Star Asia Opportunity		-		-		-		-		923
Star Asia Capital Management		-		-		-		-		64
EuroDekania		-		-		89		(245)		-
Deep Value GPs		-		-		-		-		(12)
	$	-	$	36	$	89	$	(64)	$	1,526

(1) Beginning March 1, 2013, Star Asia Manager was consolidated by the Company. Prior to that, it was treated as an equity method investment. See note A above.

The following related party transactions are non-routine and are not included in the tables above.

E. Additional Investment in the Star Asia Special Situations Fund

During the three months ended March 31, 2013, the Company made an additional investment of $302 in the Star Asia Special Situations Fund. This investment extinguished the Company’s unfunded commitment as of December 31, 2012. See notes 6 and 7.

F. Directors and Employees

In addition to the employment agreements the Company has entered into with its Chairman and its Chief Financial Officer, the Company has entered into its standard indemnification agreement with each of its directors and executive officers.