Cash and Securities Segregated for Regulatory and Other Purposes

6 Months Ended

Jun. 30, 2013

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

The Company self-cleared its trading activities in U.S. government securities (the “Rates business”) and was therefore subject to the Customer Protection rules under Rule 15c3-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  These activities were discontinued during the three months ended June 30, 2013.  At June 30, 2013 and December 31, 2012, the Company segregated cash of $1.0 million and $1.0 million, respectively, in a special reserve bank account for the exclusive benefit of customers pertaining to the previous activities of the Company’s Rates business and items related to when the Company was previously conducting self-clearing in prior years, including outstanding checks issued to customers and vendors, and other miscellaneous items.

In addition, cash and securities segregated for regulatory and other purposes at June 30, 2013 include $5.0 million of cash deposited into an escrow account by ClearPoint in connection with the Homeward Transaction.   Refer to Note 15 herein for additional information.  Cash segregated at December 31, 2012 includes $12.0 million of cash on deposit with ClearPoint’s warehouse lenders in connection with ClearPoint’s loan origination activities, now discontinued.