**Exhibit31.2**

 

CERTIFICATION

 

I, Karen L. Johannes, certify that:

 

1.               I have reviewedthis annual report on Form 10-K of Paulson Capital Corp.;

 

2.               Based on myknowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this annual report;

 

3.               Based on myknowledge, the financial statements, and other financial information includedin this annual report, fairly present in all material respects the financialcondition, results or operations and cash flows of the registrant as of, andfor, the period presented in this annual report;

 

4.               The registrant’sother certifying officers and I are responsible for establishing andmaintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) for the registrant and we have:

 

a.               Designed suchdisclosure controls and procedures, or caused such disclosure controls to bedesigned under our supervision, to ensure that material information relating tothe registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which thisannual report is being prepared;

 

b.              Evaluated theeffectiveness of the registrant’s disclosure controls and procedures andpresented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; and

 

c.               Disclosed in thisreport any change in the registrant’s internal control over financial reportingthat occurred during the registrant’s most recent fiscal quarter (theregistrant’s fourth quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and

 

5.               The registrant’sother certifying officers and I have disclosed, based on our most recentevaluation of internal control over financial reporting, to the registrant’sauditors and the audit committee of registrant’s board of directors (or personsperforming the equivalent function):

 

a.               All significantdeficiencies in the design or operation of internal controls which arereasonably likely to adversely affect the registrant’s ability to record,process, summarize and report financial information, and

 

b.              Any fraud, whetheror not material, that involves management or other employees who have asignificant role in the registrant’s internal control over financial reporting.

 

 
| Dated: March 29, 2006 |   |                      |
|----------------------------|--------|---------------------------|
|                       |   |                      |
|                       |   | /s/ Karen L. Johannes     |   |   |
|                       |   | (Karen L. Johannes)       |   |
|                       |   | (Chief Financial Officer) |   |
|                            |        |                           |  |  |

 

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