Good morning, ladies and gentlemen, and thank you for joining the Cowen Group, Incorporated Conference Call to discuss the financial results for the 2012 second quarter. By now, you should have received a copy of the company's earnings release, which can be accessed at the Cowen Group Incorporated website at www.cowen.com. Before we begin, the company has asked me to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to risks and uncertainties described in the company's earnings release and other filings with the SEC. Cowen Group, Incorporated has no obligation to update the information presented on the call. A more complete description of these and other risks and uncertainties and assumptions is included in the company's filings with the SEC, which are available on the company's website and on the SEC website at www.sec.gov. Also on today's call, our speakers will reference certain non-GAAP financial measures, which the company believes will provide useful information for investors. Reconciliation of these measures to GAAP and consistent with the company's reconciliation was presented in today's earnings release. Now I would now like to turn the call over to Mr. Peter Cohen, Chairman and Chief Executive Officer. Please proceed.

Thank you, operator, good morning, everyone. And welcome to Cowen's Second Quarter Earnings Call. I'm joined here in our office with -- by Jeff Solomon, COO of Cowen and Company; Steve Lasota, CFO of Cowen Group; John Holmes, our CAO. I'll start with a general overview of our performance for the quarter followed by an overview of our alternative investment business. Later on the call, Jeff will provide an update on our investment banking business, and Steve will take you through some of the details for our second quarter financials. There's no question that the second quarter was a challenging one, based on the market environment we are operating in. I don't have to tell all of you that just the continued uncertainty around what's going on in this country, the election, the Eurozone problems, the fears of slowdown in Asia, all weighed on the quarter and on the markets during the quarter. So it was kind of a volatile quarter in equities and global credit, notwithstanding, I think, that we feel pretty good about how we did in the quarter. Investment income were down in the first -- in the second quarter from the first quarter, but our core operating revenues remain consistent despite the environment. And here's a snapshot of our numbers. During the quarter, we reported a GAAP net loss of $8 million, or $0.07 a share, as compared to net income of $20 million, or $0.26 per share, in the prior year period. GAAP net income in the second quarter of 2011, however, included a $22 million bargain purchase gain related to the LaBranche acquisition and an $18 million deferred tax benefit associated with the company's acquisition of Luxembourg captive reinsurance company. So when you put those together, there was $40 million that went through GAAP…

Thank you, Peter. We continue to make progress at Cowen and Company in the second quarter despite the challenging markets, which is truly a testament to the strength and the drive of our people. Total revenues for banking and brokerage, combined, were $40.8 million, which is up 5% from the prior year period and up 3% from the first quarter. Investment banking and capital markets, we completed 17 transactions across all of our products, generating $16.3 million in revenue compared to 13 transactions for $14.3 million in the prior year period. Perhaps more notable is the fact that we achieved this level despite a relatively sluggish equity finance markets. This is a validation of the strategy we've been pursuing to broaden our product capability in order to be able to address the financial needs of our clients at various points on their balance sheet. We had demonstrable growth in many of the areas where we've built product capability, like our Debt Capital Markets team, which recorded a strong quarter, generating over $5 million in revenues. And while it has taken some time to establish a foothold in this space, I am very pleased by our recent success which has continued into the third quarter across a number of our industry verticals. In fact, we already announced 2 fixed income transactions in the third quarter, where we were the lead left manager book runner on both. In early July, we completed $125 million high-yield offering for a pre-revenue biotech company and $175 million high-yield offering for industrials company. We've been winning important mandates for high-yield offerings in technology and retail as well. We also saw an increase in our technology banking and capital markets efforts, which is a stated focus for us this year. During the quarter, we generated about $6.5…

Thank you, Jeff. During the second quarter of 2012, we reported a GAAP net loss of $7.9 million, or $0.07 per share, compared to a gain of $20 million, or $0.26 per share, in the prior year period. GAAP income in the prior year period included a $22.2 million bargain purchase gain related to the acquisition of LaBranche, $18.3 million tax benefit associated with the company's acquisition of Luxembourg captive reinsurance company. The first 6 months of 2012 reported a GAAP net loss of $4 million, or $0.03 per share, compared to a gain of $20.1 million, or $0.27 per share, in the first half of 2011. In addition to our GAAP results, management utilizes non-GAAP measures, which we refer to as economic income, to analyze our core operating segment performance. We believe economic income provided a more accurate view with the operating businesses, excluding the impact of expenses associated with one-time equity awards in connection with the November 2009 Ramius/Cowen transaction, gains and losses from discontinued operations and one-time gains and losses, acquisition-related expenses and other reorganization charges and bargain purchase gain. Economic income also excludes the impact of accounting rules that require us to consolidate certain of our [indiscernible]. For the 3 months ended June 30, 2012, the company reported an economic loss of $6 million, or $0.05 per share, compared to an economic gain of $562,000, or $0.01 per share, for the 2011 second quarter. For the first half of the year, we reported an economic loss of $115,000 compared to a gain of $7.5 million for the first half of 2011. Second quarter economic income revenues were $66.2 million, a decrease of $16.2 million compared to $82.4 million in 2011 second quarter. We generated $8.3 million in investment income during the second quarter and ended the…

So that's it ladies and gentlemen, in terms of the formal presentation. And at this point, I'd like to open it up to questions.

[Operator Instructions] Your first question comes from the line of Joel Jeffrey with KBW. Joel Jeffrey - Keefe, Bruyette, & Woods, Inc., Research Division: Just given that you guys recently acquired ATM, and I know it's an entirely different business from what goes on at Knight. But I'd love to get your thoughts on how you think regulators, investors might be viewing electronic trading at this point in time?

I will let Jeffrey respond to that.

I think there's a -- I sense a fair amount of time, actually, in D.C. There's definitely a lot of concern about the fast markets. I've actually spent some time with [indiscernible] Banking and [indiscernible], and in general, even before this happened, certainly in the wake of Facebook, there is a very significant concern around the idea of fast markets and things happening at blazing speeds that really acts as a deterrent for a lot of individual investors and retail investors to participate in the market. So certainly the Knight situation is not a great situation for the industry, and anybody who says they don't feel compassion for the leadership there just has never been in the seats that we're in. It's really unfortunate, because it's been a great franchise for a while, and it's still a little unclear to us how this happened, and we're obviously anxiously awaiting more information so that we can digest exactly how things like this occur. As it relates to us and ATM, look, we are in the infancy of our electronics business. And our business is not so much around speed as it is around making sure that we provide our clients with tools to get better execution. And if it means that they choose to do so electronically and use algorithms to essentially get themselves better pricing in the marketplace, then that's what we're going to do. The ATM acquisition is not geared towards fast executions. We are obviously taking steps, as anybody would, to ensure that any software update or upgrade or things that occur that could potentially cause us to have problems are adequately tested. And we have put some -- had already had a number of fail-safes in place to ensure that situations like the one that happened in Knight don't happen to us. I will also say that our business is radically different than theirs in terms of flows, and so if this was a result of a program that went awry. Our program business is episodic, and it's really high touch in a sense that everybody on the desk knows when there's a program and there's a lot of eyes watching it. So I'm not totally concerned about something like that happening here, but certainly as we continue to ramp up in our electronic product offering, we're doing everything we can to ensure that, that's the case.

Let me just put a postmark on what Jeff said. I don't think, whatever the outcome here, I don't think it just is an event that passes by without Washington taking a big notice, because this whole issue of electronic trading has been at the forefront of the SEC. They really haven't understood it. They are putting a lot of resources into trying to understand it. And I don't think that this will be a ho-hum. I think when it's all done, the health and safety of our capital markets and consciousness of the investors in this country is going to be of great importance to the regulators and to the people in Congress. And something is going to come out of this. I don't know what it is, but something is, in my opinion. And as Jeff said, it's unfortunate for the guys at Knight, people at Knight, I feel -- we really feel for them in terms of the destruction that this imposed on their organization. [indiscernible] that's where we are. Joel Jeffrey - Keefe, Bruyette, & Woods, Inc., Research Division: Great. I appreciate the color. And then just trying -- it sounds like you're getting a little bit of traction in your debt capital markets activity. I'm just wondering, is this sort of level of growth a function of just to build out more so than -- or is it more an issue that issuers are more looking towards the debt markets and then when equities return, you might see some slowdown in this or is...

I'm going to let Jeff sort of add to my comments. But this is, for us, total function of the build out and having brought in -- maybe investment in people, going back over 2 years now, to build a debt capital markets capability, which Cowen did not have. And we're seeing the fruits of our labors at this point in time. And a willingness in the market to accept the different kinds of issuers than they have in the past. And frankly, I think our guys have done a phenomenal job when you look at what we did in the second quarter in debt capital markets revenue compared to all of last year. We did 5x in the quarter, what we did for the full year. So this is not just a function of the market, this is a function of the investment we've made.

I think you are spot on -- our goal here is to be able to go in and talk to the client about what their financing needs are, period. And give them as much peripheral vision around what they can do in the marketplace that's actually executable as possible. And so when we -- this may be the first series of deals we're seeing where we've been able to adjust the client needs in terms of execution at the debt level. But in all of our discussions over the past couple of years, we've been providing our clients with a window into a marketplace that a lot of other firms our size just can't. And so, when we consider financing alternatives, what we're able to talk from a position of without bias. In other words, most firms our size really talk about only what they're good at doing, we talk about the entirety of the market. And so we've won a number of equity deals as a result of being able to go in and talk up and down the capital structure, and I would say that, that continues to be the case. So I'm very happy that we're able to put up prints in high-yield. It's really a validation of the strategy. It certainly gives us a reaffirmation of the investment we made. It also tells us how long it takes to actually bear some fruit. But we're very pleased with this. Joel Jeffrey - Keefe, Bruyette, & Woods, Inc., Research Division: Okay. And then just lastly for me. Non-comp expense came in a little bit higher than what we were looking for. I'm just wondering about sort of a run rate going forward. Is $30 million a number that we should be thinking of, or is it going to continue to decline as I know you guys have said you were on track for -- to meet your expense reduction totals?

Yes, we think it's going to decline. Some of the stuff is a little lumpy. Part of what we saw was some of the expenses related to ATM, the additional people and the rent, et cetera that shows up in non-comp. We're not seeing the benefits yet to the extent that we expect to from being more efficient in terms of execution cost because of ATM. Some of our forecasted savings there are just starting to flow through. And then some of our expenses are a little lumpy. I mean, if we have -- particularly active in recruiting and we've got some recruiting expenses, stuff like that or -- we don't -- what we don't do is try and sort of smooth out all of our accruals during the year evenly -- we pay our bills as they come in and record them as they come in. So some stuff is lumpy, but we expect to be back on the right trajectory.

[Operator Instructions] Your next question comes from the line of Devin Ryan with Sandler O'Neill. Devin Ryan - Sandler O'Neill + Partners, L.P., Research Division: So just first off on the alternatives business. You guys were upbeat on the opportunity for the liquid alternative business. But can you speak about any new products that you may be launching, and broadly, or just more broadly, about any mandates that you've won or are working on any specific products? Essentially, I'm just looking for an outlook in the near and intermediate term about net new asset growth, and then what products, new or old, that you are most of optimistic about?

Well, Devin, it's as hard an asset raising environment as I think we've ever seen. And it's not just our view, but everybody we talked to. And if you look at some of the comps in our industry, not that you can compare us to some of the other asset management arms of the public companies, because some are kind of just long equity, et cetera, a lot of people have reported pretty substantial declines in assets under management. And from what we have been able to glean from around the Street, there are a lot of people like us that had net withdrawals during this period. We've got a pretty robust pipeline. We have been working hard to sort of build our platform distribution business. We filled the value and opportunity fund, we maxed out there. And we raised a substantial amount of assets, or meaningful amount of assets, let me put it that way, from the Salomon's [ph], the Barney platform. We've got products that we are going to get on the Merrill platform, additional products that we'll get on the Salomon's, the Barney platform. We're working on some stuff at JPMorgan to get on their platform. The guys who run the solutions group, the old fund of funds group, that's a very long lead time, big mandate type business, pretty substantial backlog there. And so I mean, we feel okay, about the backlog. We're taking steps to be more laser-focused on the marketing side with our existing product base. And we're being, I think, very deliberate in terms of what we consider looking at for additional products to put on. Increasingly, we are a platform business and those platforms are fairly tightly defined and narrow and -- but they fit the environment. And there are some things we're looking at, premature to talk about them. But we will add particular strategies that fit the vertical platform as we see the opportunity. I mean, no shortage of people, by the way, coming at us, from all over the place that -- I do this, I do that, here is my record. People looking to tuck in subscale pieces people that need a home, need an infrastructure, which we have. So it's a tough time. But we are feeling pretty good about the opportunities. Devin Ryan - Sandler O'Neill + Partners, L.P., Research Division: Great. And just staying at the asset management business, how much is left in the Enterprise Fund, or how much is left to be returned?

It's about $200 million left in Enterprise. Devin Ryan - Sandler O'Neill + Partners, L.P., Research Division: Okay, great. And just moving onto the capital markets business, Jeff, I appreciate the color on the investment banking backlog. And I think you touched on this a bit in Joel's question. But you guys have obviously made a number of investments in the platform, and you mentioned debt capital markets. But it's a little bit tough from the outside, just to get an idea of what the revenue potential in that business currently is, just given that we're obviously not in a really functioning environment for most investment banking businesses. So yes, I do know that or understand that revenues are inherently volatile. But just want to get a sense of what you guys think or how you think about the potential of the business when the capital raising window isn't shut for 2 out of 3 months in the quarter. And is there a range of kind of where you think investment banking revenues should be running in your mind when we are in a kind of what I'd call more functioning environment?

That's a great way to try to get me to give you a forward-looking statement, which I'm not going to do. But it's a good question, anyway. Look, I think this is about versatility more than anything else. So if you looked at where our numbers came from, it's all a matter of public record, you can see that there was -- that health care issuance in equities was off the charts in the first quarter, and that was -- we all knew that it wasn't going to be sustainable, that was a tremendous number of companies come in, in a real short amount of time. And it was great for us, because it proves that when the business is there to be done, talent is position, you take advantage of it. And that's clearly why you want to put yourself in a position that when the markets are there, you can print, and we certainly did in health care. That business is slacking in the second quarter as it did for everybody. But we had other things working in other industry sectors and certainly other products, like the debt products, that pick up the slack. And our goal here has always been to build a platform that allows us to manipulate and move in multiple market environment, that's sort of the philosophy that we've always had when we were building Ramius out, let's have things that work in multiple market environments. So I can't sit here and tell you what the future is going to hold. What I will tell you is if there is a lot of activity in the CCC -- B, CCC space for growth companies in our target areas, I think we're in a great position to take advantage of that, and we're getting calls…

So I would say this. I'm very heartened by the fact that we've been able to hold ground here. This is -- being in the equities business is a little bit like a war of attrition. There are times that you can move forward and gain market share and not have increases in revenues, and our goal here is again to position ourselves and burrow ourselves so deeply into our customer base, that when they do start paying significant equity commissions again, we're going to be in a position to put some significant distance between us and people who just don't have the strength inside those organizations that we do. So adding products around that core, that makes us more valuable over time and helps us to address clients on a more actual basis. Ironically enough, when they pay fewer commissions, they rely on you a lot more to make better calls. So it almost is like the inverse, you matter most when they have fewer commissions to pay, because they want to be so judicious with making sure they're getting what they want. And so I'm very happy with what we've done with some of our hires in the equities division. I think this client mapping exercise that we're doing, it's the first time that Cowen has done that exercise, in almost a half a decade, which is remarkable to me on many levels. But it allows -- it shows me that irrespective of what's happening in the marketplace, there is just so many more things we can be doing to improve our lot, and eventually, the markets are going to come back around, people will pay equity commissions, and we're just going to be able to pull our distance between us and our competitors.

Who are diminishing in number.

Yes.

The number of people we are competing with continues to decline.

And just looking at -- you've seen it, you've seen what other people's equity businesses have done this last quarter. Our cash equity business is softer, not as soft as some of those other businesses are, but it's softer. But again, some of those investments we made in options and our middle market efforts and in other areas like that, has picked up the slack, and I feel good about that. It's hard to not feel good about that, because it shows that we can create balance and give people the ability to pay us in multiple ways. Devin Ryan - Sandler O'Neill + Partners, L.P., Research Division: Okay. And then just lastly, on the expenses, I don't know if you guys can give this. But the sequential increase in non-comps, how much of that was related to the -- just the ATM acquisition and just some additional infrastructure there?

$800,000 was related to ATM.

And at this time, we have no further questions. I would now like to turn the call back over to management for any closing remarks.

Well, thank you all very much for tuning in, and we'll be here in 3 months to report on third quarter. And keep our fingers crossed, we have a -- that it's a better third quarter than last year, which was a dismal third quarter for the industry. It's already started off better, and we've got a lot going on. So notwithstanding that we have this loss or breakeven for the 6 months, we actually feel better than the numbers would reflect we should feel where our business is. So everyone have a great balance of the summer, and speak to you in the fall. Thank you, operator.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.