Cowen Group (COWN)

13. Related Party Transactions

        The Company has related party transactions with Cowen Investments Holdings, LLC, an unconsolidated investment fund holding company, and the CHRP Fund.

        Amounts receivable from related parties were $2.1 million and $1.1 million as of March 31, 2009 and December 31, 2008, respectively. There were no amounts payable to related parties as of March 31, 2009 and December 31, 2008. Revenues from related parties were $2.1 million and $1.6 million for the three months ended March 31, 2009 and 2008, respectively, and are included in other revenues in the Condensed Consolidated Statements of Operations. The related party revenues and receivable balances primarily relate to management fees earned by the Company, and amounts receivable from the CHRP Fund.

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Table of Contents

Cowen Group, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

14. Related Party Transactions

        The Company has related party transactions with Cowen Investments Holdings, LLC, an unconsolidated investment fund holding company and, beginning in the third quarter of 2007, the CHRP Fund.

        Amounts receivable from related parties were $0.3 million and $2.7 million as of September 30, 2008 and December 31, 2007, respectively. There were no amounts payable to related parties as of September 30, 2008 and December 31, 2007. Revenues from related parties were $4.2 million and $1.0 million for the three months ended September 30, 2008 and 2007, respectively, and $9.6 million and $2.1 million for the nine months ended September 30, 2008 and 2007, respectively, and are included in other revenues in the Condensed Consolidated Statements of Operations. The related party revenues and receivable balances primarily relate to management fees earned by the Company, and amounts receivable from the CHRP Fund.

13. Related Party Transactions

        The Company has related party transactions with Cowen Investments Holdings, LLC, an unconsolidated investment fund holding company and, beginning in the third quarter of 2007, the unconsolidated investment funds managed by CHRP Management.

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Cowen Group, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

13. Related Party Transactions (Continued)

        Amounts receivable from related parties were $8.8 million and $2.7 million as of June 30, 2008 and December 31, 2007, respectively. There were no amounts payable to related parties as of June 30, 2008 and December 31, 2007. Revenues from related parties were $3.8 million and $0.5 million for the three months ended June 30, 2008 and 2007, respectively, and $5.4 million and $1.1 million for the six months ended June 30, 2008 and 2007, respectively, and are included in other revenues in the Condensed Consolidated Statements of Operations. The related party revenues and receivable balances primarily relate to management fees earned by the Company, and amounts receivable from the unconsolidated investment funds managed by CHRP Management.

12. Related Party Transactions

        The Company has related party transactions with Cowen Investments Holdings, LLC, an unconsolidated investment fund holding company and, beginning in the third quarter of 2007, the unconsolidated investment funds managed by CHRP Management.

        Amounts receivable from related parties were $5.5 million and $2.7 million as of March 31, 2008 and December 31, 2007, respectively. There were no amounts payable to related parties as of March 31, 2008 and December 31, 2007. For the three months ended March 31, 2008, revenues from related parties were $1.6 million and are included in other revenues in the Condensed Consolidated Statements of Operations. There were no related party revenues for the three months ended March 31, 2007. The related party revenues and receivable balances primarily relate to management fees earned by the Company, and amounts receivable from the unconsolidated investment funds managed by CHRP Management.

11. Related Party Transactions

        Effective July 21, 2006 (the date on which Société Générale's ownership level was reduced to below 10%), the Company is no longer an affiliate or related party of Société Générale. As such, the Condensed Consolidated Statements of Operations only include related party items for Société Générale through July 21, 2006. After July 21, 2006, all related party transactions are with Cowen Investments Holdings, an unconsolidated investment fund holding company, and, beginning in the third quarter of 2007, CHRP Management.

        As of September 30, 2007, receivables from related parties were $1.2 million and payables to related parties were $0.1 million. As of December 31, 2006, receivables from related party balances were $1.4 million and there were no amounts payable to related parties. Amounts payable to related parties are included within accounts payable, accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Condition. The receivable balances primarily relate to management fees earned by the Company.

        Revenues earned from and expenses incurred with related parties for the three and nine months ended September 30, 2007 and 2006 (including transactions with Société Générale through July 21, 2006, the date on which their ownership level was reduced to below 10%), are summarized as follows:

        Other than interest earned on reverse repos with Société Générale revenues earned from and expenses incurred with related parties prior to July 21, 2006 primarily resulted from securities transactions and administrative services.

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        Pursuant to service agreements with certain affiliates, the Company earned fees related to portfolio, investment and administration services that were provided in connection with the management of certain assets. These fees are included in other revenue in the Condensed Consolidated Statements of Operations.

        The Company previously cleared its securities and futures transactions on a fully disclosed basis through clearing brokers that are affiliates of Société Générale. Clearing expenses are reported in floor brokerage and trade execution in the Condensed Consolidated Statements of Operations. The Company had entered into a commercial clearing agreement with SGAS as a result of the Company's separation from Société Générale, which had replaced the Company's pre-existing clearing agreement with SGAS. The initial term of that clearing agreement terminated on December 31, 2006 and was extended until January 25, 2007, at which time the Company entered into a long term relationship with a new clearing firm.

        Pursuant to a service agreement with SGAI and other affiliates through the date of the IPO, the Company incurred expenses for costs and services that included facilities administration and security, risk management, financial management and reporting, information systems management and support, insurance, legal and compliance. Total expenses pursuant to the service plan were approximately $0.1 million for the three months ended September 30, 2006, and $3.8 million for the nine months ended September 30, 2006. In addition, the Company incurred expenses of approximately $0.1 million in the three months ended September 30, 2006, and $0.7 million in the nine months ended September 30, 2006, with Société Génerale for certain presentation center services during that period. These expenses are included in service fees in the Condensed Consolidated Statements of Operations, net of approximately $0.2 million of fees earned related to presentation center and library services provided by the Company to SGAI during the three and nine months ended September 30, 2006.

        Certain costs and services, which include real estate, project management and premises and securities maintenance through the date of the IPO were allocated to the Company by Société Générale. The total amount allocated was approximately $0.7 million during the three months ended September 30, 2006, and $7.5 million during the nine months ended September 30, 2006, and is reported in occupancy and equipment in the Condensed Consolidated Statements of Operations.