Cash and Securities Segregated for Regulatory and Other Purposes

9 Months Ended

Sep. 30, 2012

Cash and Securities Segregated for Regulatory and Other Purposes

Cash and Securities Segregated for Regulatory and Other Purposes

4.Cash and Securities Segregated for Regulatory and Other Purposes

In November 2010, Gleacher & Company Securities, Inc. (“Gleacher Securities”) began self-clearing its trading activities in U.S. government securities (the “Rates business”) and is therefore subject to the Customer Protection rules under Rule 15c3-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  At September 30, 2012 and December 31, 2011, the Company segregated cash of $1.0 million and $4.0 million, respectively, in a special reserve bank account for the exclusive benefit of customers pertaining to the results of the activities of the Company’s Rates business and outstanding checks issued to customers and vendors when the Company was previously conducting self-clearing in prior years.

Cash segregated also includes $3.0 million and $1.0 million of cash on deposit in connection with ClearPoint’s secured borrowings at September 30, 2012 and December 31, 2011, respectively.

At December 31, 2011, cash segregated also included approximately $4.6 million of cash received in connection with a working capital loan agreement between an unaffiliated borrower and certain lenders.  In connection with this agreement, a wholly-owned subsidiary of the Company, acting as agent, had a commitment to pay funding advances on behalf of the lenders with respect to any unfunded commitments drawn upon by the borrower under the working capital loan agreement.  An equal and offsetting liability was recorded within Accounts payable and accrued expenses within the Consolidated Statements of Financial Condition.