Good morning ladies and gentlemen, and welcome to the PiperJaffray Companies' Conference Call to discuss the financial results for Q3 of 2007. During the question-and-answer session, Securities industryprofessionals may ask questions to management. The company has asked that Iremind you that statements on this call that are not historical or currentfacts, including statements about beliefs and expectations. They are forward-lookingstatements that involve inherent risks and uncertainties. Factors that could cause actual results to differmaterially from those anticipated, are identified in the company's reports onfile with the SEC, which are available on the company's website at www.piperjaffray.com,and on the SEC website at www.sec.gov. And now, I would like to turn the call over to Mr. AndrewDuff. Mr. Duff, you may begin your call.

Thank you and good morning. Thecapital markets conditions in the third quarter were extremely challenging, andas a result we recorded a disappointing financial performance. Let me be clear,our business is not focused on the troubled credit markets areas, specificallysubprime mortgages and LBO loan commitments. That said, the fall-out from thesemarkets created a very challenging capital markets environment. As a result,nearly all of our businesses were negatively impacted, including equity andtaxable debt financings, mergers and acquisitions, and sales and trading. However, we believe the negativeimpact to our business was largely concentrated in the third quarter. Ourcurrent deal pipelines are strong, and we believe the current environment ismore conducive to capital markets activity. For example, at the end ofSeptember and in early October, we co-managed IPOs for Athenahealth, ChinaDigital TV, and Compellent Technologies. All deals are priced above thefiling range, and they are currently trading at significant premiums of 40% andmore than their offered price. We believe this indicative of a more receptive investorappetite, and bids us well for a more positive environment for the fourthquarter. Despite the difficult conditionsin the quarter, we continue to execute against our growth strategy. Wesuccessfully completed our acquisition of FAMCO in the third quarter, and inearly October, we closed the Goldbond transaction. We are pleased with theperformance of FAMCO, and we expect our newly expanded operations in Asia to positively contribute to our fourth quarterresults. Both of these businesses will help to broaden our capabilities, anddiversify our revenues into future quarters. Now, I would like to turn it overto Tom Schnettler to review the financial results in more detail. Tom?

Thank you, Andrew. As Andrew reviewed,the adverse conditions in the capital markets significantly impacted ourresults in the third quarter, particularly the investment banking revenues. We generated net revenues of$92.9 million, a decline of 20% from the third quarter of 2006, and a declineof 24% from the second quarter of 2007. Net income from continuing operationswas $4.8 million, compared to $9.5 million, in the year-ago period at $10.4million in the second quarter of 2007. The difficult capital marketsconditions were particularly apparent in significantly lower equity financing.Healthcare and consumer, two of our core sectors, were particularly hard hit.Year-over-year, the number of healthcare and consumer financings in theindustry dropped 20% and 50% respectively. Quarter-over-quarter, the number ofhealthcare and consumer financing both declined over 70%. Piper Jaffray neared these trends,and our revenues reflected the steep industry decline in activity. Equityfinancing revenues were $18.2 million, down 42% compared to the year agoperiod; and 55% compared to the second quarter. However, currently our U.S. equitybacklog stands at 22 transactions, the highest level year-to-date. We are leador co-lead manager on 11 of these deals in our backlog, and all of our sectorsare represented. Debt financing revenues were$18.2 million, a decline of 6% compared to last year, and a decline of 28%compared to the second quarter of 2007. Public finance revenues weathered thedownturn in market conditions, reasonably well. Public finance revenues increasedslightly year-over-year, as higher average revenue per municipal transactionmore than offset fewer completed transactions. Public finance revenues declined,compared to the sequential quarter during which revenues were at, or nearrecord levels. Due to difficult marketconditions, our taxable debt financing revenues, including high yield, werenegligible in the third quarter. Taxable financings represent a minoritycomponent of our overall debt financing revenues. However negligible revenuegeneration in this area added to the weak overall investment banking results. Advisory services’ revenues were$16.1 million,…

Operator, can you queue the linefor questions please.

(Operator Instructions) Yourfirst question comes from the line of Lauren Smith.

Hi. Good morning.

Good morning, Lauren.

Two questions, one could you talkto the tax rate, and is there anything there of note that drove it considerablylower than prior quarters?

Yeah, the tax rate on ayear-to-date basis, Lauren, is now 31.7%. I think this is indicative of therate we would see going forward. The low rate in the third quarter was reallyrelated to bringing our year-to-date rate to that level. That level of tax isreally related to the higher proportion municipal interest income to totalincome.

Okay. So we should be sort ofthinking about in and around 32%, as kind of a run-rate going forward?

Yes.

Okay. And then with respect tostock repurchase, you completed the outstanding remainder of the 180,particularly given where the stock price is. I mean, that’s what we should be thinking about. Would you be likely toreload your repurchase authorization?

We don’t intend to see theauthorization from the Board at this time for further repurchases. We arelooking at a number of opportunities to deploy capital in the business, and wewould intend to go forward with that strategy.

Okay. That’s all I have for themoment. Thank you.

Thanks, Lauren.

Your next question comes from theline of [Alex Blaustein].

Hi guys. It’s Blaustein. Howare you?

Good morning.

I have couple of questions aboutFAMCO. So there are basically two weeks, as far as I understand in the quarter,included in FAMCO results. Is thatcorrect?

Yes.

Can you give us a little morecolor, as far as the fees you guys saw from FAMCO in the quarter? We sawbasically, and obviously there is a $900 million ----a $100,000 assetmanagement, but I guess some of that is related to private equity activities?

Yeah. The majority of that wouldbe FAMCO.

Okay. And as far as the assetsunder management, at the time of the acquisition, I think it was about when theacquisition was announced down by $9 billion, and then when it closed it wentdown to about $8.2 billion Can you just give us an idea of what happened there,and where are the assets at the end of the quarter?

Yes. It was actually $8.3 billionat the time it closed. There was one significant client who did not provideconsent to the acquisition. So the cash payment of the close was adjustedaccordingly, and those are indicative balances for the end of the quarter.

Okay, fair. Thanks a lot.

(Operator Instructions) Your nextquestion comes from the line of David Trone.

Good morning. You guys had mentionedthat there were some high yields in the structured product losses. Is there anyway you could quantify that? And do you mean losses -- characterize, what doyou mean by losses. Do you mean markdowns?

I mean that in some of the inventorypositions that we were carrying in support of our high-yield and structuredproduct trading activity, yes. We took some markdowns against thoseinventories.

Okay, and can you quantify it?

We don’t provide that on a kindof product-by-product basis.

Okay, thank you.

There are no further questions. Iam sorry, we do have a question. I think we have a question from the line of [LizSkinner].

Hi, I was wondering, youmentioned that there are a number of opportunities to deploy capital into thebusiness. Could you give vent to what others you are looking at?

This is Andrew. We are continuingto look at opportunities consistent with our strategy, where we can addadditional product capabilities, new industry sectors or expand our geographicfootprint. And the two that we have accomplished recently are pretty indicativeof the opportunity to get a bigger footprint in Asia,and to re-enter the asset management business. Not to mention ongoingdevelopment of a number of [principaling] activities. So we do see the need foradditional capital to deploy in these strategies. And I would remind you thatour balance sheet remains unlevered. So we believe we have the capacity to getthe capital we need to develop these strategies.

(Operator Instructions). Thereare no further questions.

Okay, well, let me just make aclosing comment. We continue to believe we are demonstrating solid executionover the last several years against our aggressive growth strategy. We areundeterred by the temporary market upsets, and we’ll continue on the coursethat we've been on for the last several years. Thank you all for joining ustoday.

This concludes today's conferencecall. You may now disconnect.