Fair Value Measurements

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2:

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of September 30, 2024
Assets
Money market funds	$	8,985	$	—	$	—	$	8,985
Securities available-for-sale
Corporate debt		—		54,962		—		54,962
Trading securities
U.S. Treasuries		—		101,183		—		101,183
Mutual funds held in rabbi trust		—		11,068		—		11,068
Foreign currency forward position		—		2,770		—		2,770
Total assets	$	8,985	$	169,983	$	—	$	178,968
As of December 31, 2023
Assets
Money market funds	$	18,634	$	—	$	—	$	18,634
Securities available-for-sale
Corporate debt		—		24,694		—		24,694
Trading securities
U.S. Treasuries		—		99,682		—		99,682
Mutual funds held in rabbi trust		—		10,485		—		10,485
Foreign currency forward position		—		1,901		—		1,901
Total assets	$	18,634	$	136,762	$	—	$	155,396

Money market funds are included in cash and cash equivalents on the Consolidated Statements of Financial Condition. Securities available-for-sale and trading securities are included in investments, at fair value on the Consolidated Statements of Financial Condition. Securities classified within Level 2 were valued using a market approach utilizing prices and other relevant information generated by market transactions involving comparable assets. The foreign currency forward contracts are included in either other assets or accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition, and are classified within Level 2 as the valuation inputs are based on quoted market prices. The mutual funds held in a rabbi trust represent investments associated with the Company’s deferred cash incentive plan. Securities sold, not yet purchased reflects a short U.S. Treasury inventory position held overnight in relation to the Company’s U.S. broker dealer subsidiary’s self-clearing operations.

The table below presents the carrying value, fair value and fair value hierarchy category of the Company's financial assets and liabilities that are not measured at fair value on the Consolidated Statements of Financial Condition. The carrying values of the Company's financial assets and liabilities not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximate fair value due to the short-term nature of the underlying assets and liabilities.

	Carrying Value		Fair Value		Level 1		Level 2		Level 3		Total
	(In thousands)
As of September 30, 2024
Financial assets not measured at fair value:
Cash	$	437,362	$	437,362	$	437,362	$	—	$	—	$	437,362
Cash segregated under federal regulations		46,657		46,657		46,657		—		—		46,657
Accounts receivable, net of allowance		102,760		102,760		—		102,760		—		102,760
Receivables from broker-dealers, clearing    organizations and customers		474,989		474,989		106,829		368,160		—		474,989
Total	$	1,061,768	$	1,061,768	$	590,848	$	470,920	$	—	$	1,061,768
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	283,314	$	283,314	$	—	$	283,314	$	—	$	283,314
As of December 31, 2023
Financial assets not measured at fair value:
Cash	$	432,646	$	432,646	$	432,646	$	—	$	—	$	432,646
Cash segregated under federal regulations		45,122		45,122		45,122		—		—		45,122
Accounts receivable, net of allowance		89,839		89,839		—		89,839		—		89,839
Receivables from broker-dealers, clearing    organizations and customers		687,936		687,936		115,151		572,785		—		687,936
Total	$	1,255,543	$	1,255,543	$	592,919	$	662,624	$	—	$	1,255,543
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing    organizations and customers	$	537,398	$	537,398	$	—	$	537,398	$	—	$	537,398

During the three and nine months ended September 30, 2024 and 2023, there were no transfers of securities between Level 1, Level 2 and Level 3.

The Company enters into foreign currency forward contracts as an economic hedge against certain foreign currency transaction gains and losses in the Consolidated Statements of Operations. These forward contracts are for three-month periods and are used to limit exposure to foreign currency exchange rate fluctuations. The Company records the fair value of the asset in prepaid expenses and other assets or the fair value of the liability in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. The following table summarizes the Company’s foreign currency forward position:

	As of
	September 30, 2024		December 31, 2023
	(In thousands)
Notional value	$	64,070	$	61,858
Fair value of notional		66,840		63,759
Fair value of the asset	$	2,770	$	1,901

Realized and unrealized gains and losses on foreign currency forward contracts are included in other, net in the Consolidated Statements of Operations. The following table summarizes the realized and unrealized gains and losses on foreign currency forward contracts:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2024		2023			2024		2023
	(In thousands)
Unrealized gain/(loss)	$	2,270	$	(3,497	)	$	868	$	(1,164	)
Realized gain/(loss)		1,195		755			1,808		675
Total gain/(loss)	$	3,465	$	(2,742	)	$	2,676	$	(489	)

The Company records collateral deposits with its counterparty bank in prepaid expenses and other assets on the Consolidated Statements of Financial Condition. As of September 30, 2024, the Company did not maintain a collateral deposit with its counterparty bank.

The following table summarizes the Company’s investments and securities positions:

	Amortized cost			Gross unrealized gains		Gross unrealized losses			Fair value
		(In thousands)
As of September 30, 2024
Securities available-for-sale
Corporate debt	$		54,740	$	284	$	(62	)	$	54,962
Trading securities
U.S. Treasuries			100,499		701		(17	)		101,183
Mutual funds held in rabbi trust			9,695		1,373		—			11,068
Total investments	$		164,934	$	2,358	$	(79	)	$	167,213
As of December 31, 2023
Securities available-for-sale
Corporate debt	$		24,705	$	55	$	(66	)	$	24,694
Trading securities
U.S. Treasuries			99,236		446		—			99,682
Mutual funds held in rabbi trust			10,962		172		(649	)		10,485
Total investments	$		134,903	$	673	$	(715	)	$	134,861

Purchases of investments during the nine months ended September 30, 2024 and 2023 were $89.4 million and $77.7 million, respectively. Proceeds from the sales and maturities of investments during the nine months ended September 30, 2024 and 2023 were $58.9 million and $28.3 million, respectively.

The following table summarizes the Company’s unrealized and realized gains and losses on investments:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
	(In thousands)
Unrealized gains/(losses)
Securities available-for-sale
Corporate debt	$	324		$	(22	)	$	233		$	(245	)
Trading securities
U.S. Treasuries		845			(154	)		852			(500	)
Mutual funds held in rabbi trust		505			(200	)		1,850			905
Total investments	$	1,674		$	(376	)	$	2,935		$	160
Liabilities:
Securities sold, not yet purchased	$	(44	)	$	—		$	—		$	—
Realized gains/(losses)
Securities available-for-sale
Corporate debt	$	2		$	—		$	4		$	(17	)
Trading securities
Mutual funds held in rabbi trust		30			(79	)		(347	)		(138	)
Total investments	$	32		$	(79	)	$	(343	)	$	(155	)
Liabilities:
Securities sold, not yet purchased	$	174		$	—		$	174		$	—

Unrealized gains and losses on securities available-for-sale are included in accumulated other comprehensive loss on the Consolidated Statements of Financial Condition. Realized gains and losses on securities available-for-sale and realized and unrealized gains and losses on trading securities are included in other, net on the Consolidated Statements of Operations.

The following table summarizes the fair value of the investments based upon the contractual maturities:

	Less than one year		Due in 1 - 5 years		Total
	(In thousands)
As of September 30, 2024
Securities available-for-sale
Corporate debt	$	11,185	$	43,777	$	54,962
Trading securities
U.S. Treasuries		50,145		51,038		101,183
Mutual funds held in rabbi trust		11,068		—		11,068
Total	$	72,398	$	94,815	$	167,213
As of December 31, 2023
Securities available-for-sale
Corporate debt	$	10,727	$	13,967	$	24,694
Trading securities
U.S. Treasuries		49,756		49,926		99,682
Mutual funds held in rabbi trust		10,485		—		10,485
Total	$	70,968	$	63,893	$	134,861

The following table provides fair values and unrealized losses on the Company’s available-for-sale investments and the aging of securities’ continuous unrealized loss positions:

	Less than Twelve Months					Twelve Months or More					Total
	Fair value		Gross unrealized losses			Fair value		Gross unrealized losses			Fair value		Gross unrealized losses
	(In thousands)
As of September 30, 2024
Corporate debt	$	22,175	$	(57	)	$	3,401	$	(5	)	$	25,576	$	(62	)
As of December 31, 2023
Corporate debt	$	17,658	$	(66	)	$	—	$	—		$	17,658	$	(66	)

During the three and nine months ended September 30, 2024 and 2023, the Company did not recognize any credit losses on its available-for-sale securities. The unrealized losses on securities are due to changes in interest rates and market liquidity.