<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

             -------------------------------------------------------

For Quarter Ended:                         Commission File Number:  000-19619
June 30, 2002

                                HOENIG GROUP INC.
------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

    Delaware                                          13-3625520
------------------------------------          ------------------------
(State or other jurisdiction                 (I.R.S. Employer I.D. No.)
of incorporation or organization)

Reckson Executive Park
4 International Drive
Rye Brook, NY                                                      10573
------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip Code)

                                 (914) 935-9000
 ------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


------------------------------------------------------------------------------
      (Former name, former address and former fiscal year if changed since
                                  last report)

Indicated by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  _X_    No___

As of August 13, 2002, there were 8,030,317 shares of common stock, par value
$0.01 per share, outstanding.


<PAGE>


                                HOENIG GROUP INC.
                                    FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 2002

                                      INDEX

<TABLE>
<CAPTION>
                                                                                         PAGE
<S>                                                                                     <C>

PART I - FINANCIAL INFORMATION

    Item 1.    Financial Statements

          Consolidated Statements of Financial Condition -
          June 30, 2002 Unaudited and December 31, 2001                                     1

          Unaudited Consolidated Statements of Income -
          Three and Six Months Ended June 30, 2002 and 2001                                 2

          Unaudited Consolidated Statements of Comprehensive Income -
          Three and Six Months Ended June 30, 2002 and 2001                                 3

          Unaudited Consolidated Statements of Cash Flows -
          Six Months Ended June 30, 2002 and 2001                                           4

          Notes to Unaudited Consolidated Financial Statements                            5-9

    Item 2.    Management's Discussion and Analysis
               of Financial Condition and Results of Operations                          9-17

    Item 3.    Quantitative and Qualitative Disclosures
               About Market Risk                                                        17-18


PART II - OTHER INFORMATION

     Item 6.   Exhibits and Reports on Form 8-K                                            19

     Signatures                                                                            20

     Exhibit Index                                                                         21

</TABLE>





<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                HOENIG GROUP INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                       JUNE 30, 2002 AND DECEMBER 31, 2001
<TABLE>
<CAPTION>
                                                                    (UNAUDITED)
ASSETS                                                              JUNE 30, 2002             DEC. 31, 2001
                                                                    -------------             -------------
<S>                                                                 <C>                       <C>
Cash and equivalents                                                  $37,518,497               $38,661,775
U.S. Government obligations, at market value                           14,565,674                14,684,092
Receivables from correspondent brokers and dealers                     10,222,619                21,729,344
Receivables from customers                                              8,839,102                 6,108,046
Equipment, furniture and leasehold improvements,
  net of accumulated depreciation and amortization                      1,952,480                 1,942,645
Securities owned, at market value                                              --                   614,178
Exchange memberships, at cost                                           1,026,336                 1,038,216
Investment management fees receivable                                          --                 1,726,327
Investment in limited partnerships                                             --                 1,894,608
Taxes receivable                                                        3,555,546                 3,622,973
Deferred research/services expense                                      4,527,008                 3,157,953
Other assets                                                            2,942,490                 3,434,887
                                                                        ---------             -------------

Total Assets                                                          $85,149,752               $98,615,044
                                                                      ===========               ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Accrued research/services payable                                      $9,816,287                $9,750,685
Accrued compensation                                                    4,751,146                11,561,265
Payable to brokers and dealers                                          9,052,141                 6,462,299
Payable to customers                                                    6,695,523                15,056,531
Accrued expenses                                                        2,376,769                 1,683,471
Bank loan payable                                                              --                     4,080
Securities sold, not yet purchased                                        137,751                        --
Taxes payable                                                           1,274,691                 1,524,723
Other liabilities                                                         249,274                   552,518
                                                                          -------                   -------

Total Liabilities                                                      34,353,582                46,595,572
                                                                       ----------                ----------

STOCKHOLDERS' EQUITY
Common Stock $0.01 par value per share;
Voting- authorized 40,000,000 shares, issued
  - 10,930,450 shares in 2002 and 2001                                    109,305                   109,305
Additional paid in capital                                             29,043,388                28,761,350
Accumulated other comprehensive loss                                     (108,402)                 (214,493)
Retained earnings                                                      42,628,463                44,601,014
                                                                       ----------                ----------
                                                                       71,672,754                73,257,176
Less restricted stock                                                    (150,000)                 (225,000)
Less treasury stock at cost -2,945,133
  shares and 3,037,133 shares, respectively                           (20,726,584)              (21,012,704)
                                                                      ------------              ------------
Total Stockholders' Equity                                             50,796,170                52,019,472
                                                                       ----------              ------------
Total Liabilities and Stockholders' Equity                            $85,149,752               $98,615,044
                                                                      ===========               ===========
</TABLE>

            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                       1

<PAGE>


                                HOENIG GROUP INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                     THREE MONTHS ENDED                    SIX MONTHS ENDED
                                                          JUNE 30,                             JUNE 30,
                                                          --------                             --------
OPERATING REVENUES                                  2002                2001              2002             2001
                                                    ----                ----              ----             ----
<S>                                                 <C>                  <C>               <C>             <C>
 Gross commissions                               $25,439,419         $23,361,596      $50,320,016       $45,673,768
 Other                                               112,379             126,687          227,250           253,638
                                                ------------        ------------     ------------      ------------
     Total operating revenues                     25,551,798          23,488,283       50,547,266        45,927,406

EXPENSES

Clearing, floor brokerage and
      exchange charges                             2,836,105           2,590,510        5,654,582         5,159,716
 Employee compensation                             5,117,431           4,865,582       10,090,516         9,587,849
 Independent research and other services          14,059,251          11,474,965       27,706,064        23,047,939
 Loss including expenses from Hoenig &
       Company Limited                             7,691,746                  --        7,691,746                --
 Other                                             4,005,625           2,940,694        6,404,067         5,368,734
                                                   ---------         -----------        ---------       -----------
     Total expenses                               33,710,158          21,871,751       57,546,975        43,164,238
OPERATING (LOSS) INCOME                          (8,158,360)           1,616,532       (6,999,709)        2,763,168

INVESTMENT INCOME (LOSS) AND OTHER
    FROM CONTINUING OPERATIONS

 Interest and dividends                              259,761             486,433          502,758         1,285,715
 Write-off of investment in convertible notes             --                  --               --        (9,292,407)
 Other                                                36,123             820,215            6,442         1,655,805
                                                    --------          ----------        ---------         ---------
Net investment income (loss) and other from
    continuing operations                            295,884           1,306,648          509,200        (6,350,887)

(LOSS) INCOME BEFORE INCOME TAXES
    FROM CONTINUING OPERATIONS                   (7,862,476)           2,923,180       (6,490,509)       (3,587,719)
(Benefit) provision for income taxes
       from continuing operations                  (967,173)           1,130,795          436,777        (1,593,948)
                                                   ---------           ---------          -------        -----------
 Net (loss) income from continuing operations   $(6,895,303)          $1,792,385      $(6,053,732)      $(1,993,771)
                                                 -----------          ----------      ------------      ------------

DISCONTINUED OPERATIONS

 Income from discontinued operations net of tax       16,568             357,527          168,215           672,454
 Gain on asset sales from discontinued operations,
   net of tax                                      1,220,189                  --        3,912,968                --
                                                   ---------        ------------        ---------      ------------
 Net income from discontinued operations           1,236,757             357,527        4,081,183           672,454
                                                   ---------             -------        ---------           -------

       Net (loss) income                         $(5,658,546)         $2,149,912      $(1,972,549)      $(1,321,317)
                                                  ===========         ==========      ============      ============

 NET (LOSS) INCOME PER SHARE

 Basic

(Loss) income from continuing operations              $(0.87)              $0.23           $(0.76)          $(0.25)
 Income from discontinued operations                   $0.16               $0.04            $0.51            $0.08
                                                       -----               -----            -----            -----

Net (loss) income per share basic                     $(0.71)              $0.27           $(0.25)          $(0.17)
                                                      =======              =====           =======          =======

 Diluted

 (Loss) income from continuing operations             $(0.87)              $0.20           $(0.76)          $(0.25)
 Income from discontinued operations                   $0.16               $0.04            $0.51            $0.08
                                                       -----               -----            -----            -----

Net (loss) income per share diluted                   $(0.71)              $0.24           $(0.25)          $(0.17)
                                                      =======              =====           =======          =======
</TABLE>

            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                       2

<PAGE>



                                HOENIG GROUP INC.

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                THREE MONTHS ENDED JUNE 30,          SIX MONTHS ENDED JUNE 30,
                                                ---------------------------          -------------------------

                                                 2002                2001             2002              2001
                                                 ----                ----             ----              ----
<S>                                              <C>                 <C>              <C>                <C>
Net (loss) income                            $(5,658,546)          $2,149,912       $(1,972,549)        $(1,321,317)
                                             ------------          -----------      ------------        ------------

Other comprehensive income (loss),
     net of tax

     Foreign currency translation adjustment     245,373              (9,864)          173,518            (181,254)
     Tax expense (benefit)                        91,138              (3,459)           67,427             (73,046)
                                             ------------         -----------      ------------        ------------
     Other comprehensive income (loss)           154,235              (6,405)          106,091            (108,208)
                                             ------------         -----------      ------------        ------------
Comprehensive (loss) income                  $(5,504,311)         $2,143,507       $(1,866,458)        $(1,429,525)
                                             ============         ===========      ============        ============
</TABLE>


            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                       3

<PAGE>


                                HOENIG GROUP INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   SIX MONTHS ENDED JUNE 30,
                                                                                   -------------------------
                                                                                2002                    2001
                                                                                ----                    ----
<S>                                                                             <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

 Net (loss) from continuing operations                                       $(6,053,732)          $(1,993,771)
 Adjustments to reconcile net (loss)
   to net cash (used in) operating activities:
  Net income from discontinued operations                                        168,215                672,454
  Depreciation and amortization                                                  497,940                666,923
  Loss on disposal of fixed assets                                                19,002                     --
  Foreign currency translation adjustment                                        106,091               (108,208)
  Issuance of restricted stock                                                    75,000                 75,000
  Investment in convertible notes                                                     --              7,944,273
Changes in assets and liabilities:
  Securities owned, net                                                          137,751               (744,387)
  Receivable from correspondent brokers and dealers                           11,506,725             (7,233,746)
  Receivable from customers                                                   (2,731,056)             2,250,839
  Investment management fees receivable                                        1,726,327                368,449
  Payable to customers                                                        (8,361,008)             7,201,598
  Deferred research/services expense                                          (1,369,055)            (1,274,203)
  Other assets                                                                    492,397            (2,141,979)
  Payable to brokers and dealers                                               2,589,842             (1,624,049)
  Accrued research/services payable                                               65,602              1,808,901
  Accrued compensation                                                        (6,810,119)            (7,241,100)
  Accrued expenses                                                               693,298               (218,367)
  Taxes Payable                                                                (250,032)                     --
  Other liabilities                                                             (303,244)            (2,030,180)
  Taxes receivable                                                                67,427                     --
                                                                            ------------           ------------
Net cash (used in) operations                                                 (7,732,629)            (3,621,553)

CASH FLOWS FROM INVESTING ACTIVITIES:

  Gain on asset sales from discontinued operations                             3,912,968                     --
  Investment in U.S. Government obligations                                      118,418                (75,094)
  Investment in limited partnerships                                           1,894,608               (104,290)
  Investment in securities                                                       614,178               (397,347)
  Purchases of equipment, furniture and leasehold
     improvements                                                               (514,899)              (434,032)
                                                                            ------------           -------------
Net cash provided by (used in) investing activities                            6,025,273             (1,010,763)

CASH FLOWS FROM FINANCING ACTIVITIES:

  Issuance of treasury stock                                                     568,158                 34,650
  Treasury stock purchased                                                            --               (132,034)
  Issuance of common stock                                                            --                148,962
  Short-term bank loan payable                                                    (4,080)                    --
                                                                            ------------           ------------
Net cash provided by financing activities                                        564,078                 51,578

  Net decrease in cash and equivalents                                        (1,143,278)            (4,580,738)
  Cash and equivalents beginning of period                                    38,661,775             34,734,141
                                                                            ------------           ------------
  Cash and equivalents end of period                                         $37,518,497            $30,153,403
                                                                            ============           ============
  Supplemental disclosure of cash flow information:
         Interest paid                                                          $157,363               $130,002
                                                                            ============           ============
         Taxes paid                                                           $1,851,745             $2,618,858
                                                                            ============           ============

</TABLE>

            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                       4

<PAGE>


                                HOENIG GROUP INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION.

In the opinion of management, the accompanying unaudited interim consolidated
financial statements reflect all adjustments (which include only normal
recurring accruals) necessary to present fairly the financial position of Hoenig
Group Inc. (the "Company") as of June 30, 2002 and December 31, 2001 and its
results of operations, changes in comprehensive income and cash flows for the
three and six months ended June 30, 2002 and 2001. The consolidated financial
statements included herein have been prepared by the Company without independent
audit. Certain information normally included in the consolidated financial
statements and related notes prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. These consolidated financial statements and notes thereto should be
read in conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2001. The results of operations for the three- and six-month periods ended
June 30, 2002 are not necessarily indicative of operating results for the full
year. The Consolidated Statements of Income and Cash Flows, and related Notes to
the Unaudited Consolidated Financial Statements, have been prepared to conform
to the discontinued operations presentation.


NOTE 2 - NET CAPITAL AND RESERVE REQUIREMENTS.

Hoenig & Co., Inc. ("Hoenig"), the Company's principal operating subsidiary, is
subject to the Uniform Net Capital Rule (Rule 15c3-1), which requires that
Hoenig maintain net capital of the greater of $250,000 or one-fifteenth of
aggregate indebtedness. At June 30, 2002, Hoenig's minimum required net capital
was approximately $988,000, its net capital ratio was 104 to 1, and its actual
net capital was approximately $14,188,000, which was approximately $13,200,000
in excess of regulatory requirements. Hoenig & Company Limited ("Limited") is
required to maintain financial resources of at least 110% of its capital
requirement (as defined). Limited's financial resources requirement at June 30,
2002 was approximately (pounds)1,064,000 ($1,629,000); it had eligible capital
of approximately (pounds)2,576,000 ($3,944,000), and excess financial resources
at such date of approximately (pounds)1,512,000 ($2,315,000). Hoenig (Far East)
Limited ("Far East") is required to maintain liquid capital of the greater of
HK$3,000,000 ($375,000) or 5% of average quarterly total liabilities. Far East's
required liquid capital was approximately HK$17,909,000 ($2,239,000) at June 30,
2002, and it had actual liquid capital of approximately HK$71,381,000
($8,923,000) and excess liquid capital of approximately HK$53,472,000
($6,684,000).

The Company is subject to regulation covering virtually all aspects of its
business. It is subject to extensive regulation under U.S. Federal and state law
and by certain self-regulatory bodies, including the New York Stock Exchange
("NYSE") and various other stock exchanges, the U.S. Securities and Exchange
Commission ("SEC"), the National Association of Securities Dealers Regulation,
Inc. ("NASDR") and several foreign securities exchanges and regulatory bodies,
including the Financial Services Authority in the United Kingdom and the
Securities and Futures Commission in Hong Kong. In the normal course of
business, the Company is subject to inquiries and regulatory examinations by
many of these regulatory authorities.


NOTE 3 - AXE-HOUGHTON SALES/DISCONTINUED OPERATIONS.

The Company has sold Axe-Houghton Associates, Inc. ("Axe-Houghton"), its
wholly-owned asset management subsidiary, in three separate transactions. The
first transaction, which was announced on November 29, 2001 and completed on
January 31, 2002, involved the sale of Axe-Houghton's Core International ADR and
Domestic Equity Index institutional investment management businesses to The Bank
of New York. The Company received $5.4 million from this sale, recognizing a
gain of $2.7 million, net of taxes and expenses.

The second and third transactions to sell the remaining businesses of
Axe-Houghton were announced on


                                       5

<PAGE>


February 12, 2002. The second transaction was completed on March 28, 2002 and
involved the sale of Axe-Houghton's Value and Balanced Equity institutional
investment management businesses to Byram Capital Management LLC ("Byram"). The
Company received $0.1 million in the first quarter 2002 and recognized a gain of
$0.05 million net of taxes and expenses from the sale to Byram. The third
transaction involved the sale of all of the stock of Axe-Houghton, together with
the remaining Small Capitalization Growth Equity institutional investment
management businesses, to Axe Holding Corp., an entity formed by the principals
of Palisade Capital Management LLC, a privately-owned registered investment
adviser. The third transaction was completed on April 26, 2002. Two executives
of Axe-Houghton responsible for managing the Small Capitalization Growth
Equity-related disciplines received equity in the continuing business after the
sale of Axe-Houghton to the Palisade Capital Management group, and no additional
payments were made to them by Axe-Houghton or the Company in connection with the
sale. The Company received $3.2 million in proceeds from this sale and
recognized a gain of $1.2 million, net of taxes and expenses, in the second
quarter 2002.

Axe-Houghton's historical operating results are presented in the Consolidated
Statements of Income for the three and six months ended June 30, 2002 and 2001
as discontinued operations.


NOTE 4 - INVESTMENTS IN LIMITED PARTNERSHIPS.

Axe-Houghton was the general partner of two limited partnerships and maintained
investments in each of the partnerships. The Company has dissolved these
investment partnerships. The first partnership was dissolved during March 2002.
The second partnership was dissolved in April 2002. Axe-Houghton's partnership
investments were 12.2% ($373,974) and 0.41% ($21,058) of the partnerships at
December 31, 2001 and 0.41% ($19,615) at March 31, 2002.

The Company also maintained an investment in an unaffiliated multi-manager,
market-neutral limited partnership, which investment was liquidated during the
first quarter 2002. The investment was $1.5 million at December 31, 2001 and at
the time it was liquidated.


NOTE 5 - SECURITIES RECEIVED IN FOREIGN SECURITIES EXCHANGES.

In June 2000, the Company received 805,000 shares of common stock of Hong Kong
Stock Exchanges and Clearing Limited (the Hong Kong shares) in connection with
its ownership of a seat on The Stock Exchange of Hong Kong. In July 2000, the
Company received 100,000 shares of common stock of the London Stock Exchange
(the London shares) in connection with its ownership of a seat on the London
Stock Exchange. At December 31, 2000, the Company owned 177,000 Hong Kong shares
and 100,000 London shares. In July 2001, the London shares split 10 for 1. As of
December 31, 2001, the Company owned 99,945 London shares. All of the remaining
Hong Kong shares were sold during 2001, and the remaining London shares, valued
at $0.6 million, were sold during the first quarter 2002.

The value of the London shares, which were accounted for at fair market value,
was $614,178 at December 31, 2001, and is included in securities owned in the
Consolidated Statements of Financial Condition.


NOTE 6 - EARNINGS PER SHARE.

The FASB has issued SFAS No. 128, "Earnings Per Share". Basic earnings per share
is calculated by dividing net income by the weighted average number of common
shares outstanding. Diluted earnings per share is similar to basic, but adjusts
for the effect of potential common shares.

The following table presents the computations and diluted earnings per share for
the periods indicated:


                                       6

<PAGE>

<TABLE>
<CAPTION>

                                                         THREE MONTHS ENDED                 SIX MONTHS ENDED
                                                              JUNE 30,                          JUNE 30,
                                                              --------                          --------
                                                        2002(1)           2001             2002(1)         2001(1)
                                                        ----              ----             ----            ----
<S>                                                      <C>              <C>               <C>             <C>
Net (loss) income from continuing operations         $(6,895,303)       $1,792,385     $(6,053,732)    $(1,993,771)
Net income from discontinued operations                1,236,757           357,527       4,081,183         672,454
                                                      ----------        ----------      ----------      ----------
Net (loss) income available to common stockholders    (5,658,546)        2,149,912      (1,972,549)     (1,321,317)
                                                      ----------        ---------       ----------      ----------

       Weighted average shares outstanding             7,945,603         7,903,829       7,925,055        7,905,304
       Effect of dilutive instruments
         Employee stock awards                                --         1,054,943              --               --
                                                      ----------        ----------      ----------       ----------
       Total weighted average diluted shares           7,945,603         8,958,772       7,925,055        7,905,304

Basic (loss) earnings per share
       (Loss) income from continuing operations           $(0.87)            $0.23          $(0.76)          $(0.25)
       Income from discontinued operations                 $0.16             $0.04           $0.51            $0.08
                                                      ----------        ----------      ----------       ----------
       Net (loss) income per share basic                  $(0.71)            $0.27          $(0.25)          $(0.17)
                                                      ==========        ==========      ==========       ==========

Diluted (loss) earnings per share
       (Loss) income from continuing operations           $(0.87)            $0.20          $(0.76)          $(0.25)
       Income from discontinued operations                 $0.16             $0.04           $0.51            $0.08
                                                      ----------        ----------      ----------       ----------
       Net (loss) income per share diluted                $(0.71)            $0.24          $(0.25)          $(0.17)
                                                      ==========        ==========      ==========       ==========
</TABLE>

-----------------------

(1)  In computing earnings per share resulting in a net loss, common stock
     equivalents are not included in the calculation as it would result in
     anti-dilution.


NOTE 7 - SEGMENT AND DISCONTINUED OPERATIONS REPORTING.

The FASB has issued SFAS No. 131, "Disclosure About Segments of an Enterprise
and Related Information," to assist financial statement users in assessing the
performance of an enterprise and its prospects for future cash flows, and to
make informed decisions about the enterprise. The Company had two reportable
operating segments during the periods presented: domestic brokerage and
international brokerage. The Company's brokerage segments provide independent
third-party and proprietary research, global securities brokerage and other
services primarily to institutional clients from its domestic (United States)
and international (United Kingdom and Hong Kong) brokerage operations. In
attributing commission revenues to its brokerage segments, the Company primarily
relies on the geographic location of the customer.

The accounting policies related to the Company's two brokerage segments are the
same as those described in Note 2 of the Notes to Consolidated Financial
Statements contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001. The Company evaluates performance based upon operating
income or loss, not including interest and investment income, as well as certain
allocations of intercompany expenses. The Company does not allocate certain
corporate assets (goodwill and certain fixed assets) to its reportable segments.

The Company sold Axe-Houghton, its asset management operations, in three
separate transactions which were completed on January 31, 2002, March 28, 2002,
and April 26, 2002. The results of operations of Axe-Houghton are reflected as
discontinued operations in the table below.

The following table illustrates significant financial data for each reportable
segment and discontinued operations for the periods indicated:


                                       7

<PAGE>


<TABLE>
<CAPTION>
THREE MONTHS ENDED                       DOMESTIC              INTERNATIONAL                         DISCONTINUED
JUNE 30, 2002                            BROKERAGE               BROKERAGE           TOTAL            OPERATIONS
-----------------------                  ---------               ---------           -----            ----------
<S>                                      <C>                     <C>                  <C>             <C>
Revenues from external customers       $21,795,659               3,756,139         25,551,798            286,576
Segment operating income (loss)          1,970,877              (7,567,052)        (5,596,175)            27,768
Segment assets                          33,850,517              31,995,647         65,846,164                 --

<CAPTION>
THREE MONTHS ENDED                       DOMESTIC              INTERNATIONAL                         DISCONTINUED
JUNE 30, 2001                            BROKERAGE               BROKERAGE           TOTAL            OPERATIONS
-----------------------                  ---------               ---------           -----            ----------
<S>                                      <C>                     <C>                  <C>             <C>
Revenues from external customers       $20,431,948               3,056,335         23,488,283          1,983,687
Segment operating income (loss)          2,878,105                (154,485)         2,723,620            602,143
Segment assets                          34,503,814              42,304,468         76,808,282          4,744,709

<CAPTION>
SIX MONTHS ENDED                         DOMESTIC              INTERNATIONAL                         DISCONTINUED
JUNE 30, 2002                            BROKERAGE               BROKERAGE           TOTAL            OPERATIONS
-----------------------                  ---------               ---------           -----            ----------
<S>                                      <C>                     <C>                  <C>             <C>
Revenues from external customers       $43,134,263               7,413,003         50,547,266           1,655,079
Segment operating income (loss)          3,920,497              (7,435,835)        (3,515,338)            261,301

<CAPTION>
SIX MONTHS ENDED                         DOMESTIC              INTERNATIONAL                         DISCONTINUED
JUNE 30, 2001                            BROKERAGE               BROKERAGE           TOTAL            OPERATIONS
-----------------------                  ---------               ---------           -----            ----------
<S>                                      <C>                     <C>                  <C>             <C>
Revenues from external customers       $40,162,764               5,764,642         45,927,406          4,043,756
Segment operating income (loss)          5,119,745                (342,510)         4,777,235          1,152,150

</TABLE>

Information for the Company's reportable segments as it relates to the
consolidated totals is as follows:

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED JUNE 30,           SIX MONTHS ENDED JUNE 30,
                                               ---------------------------           -------------------------
                                               2002                  2001            2002                 2001
                                               ----                  ----            ----                 ----
<S>                                            <C>                   <C>             <C>                  <C>
OPERATING REVENUES:

Domestic brokerage                       $21,795,659              $20,431,948      $43,134,263         $40,162,764
International brokerage                    3,756,139                3,056,335        7,413,003           5,764,642
                                         -----------              -----------      -----------         -----------
Total operating revenues                 $25,551,798              $23,488,283      $50,547,266         $45,927,406
                                         ===========              ===========      ===========         ===========

<CAPTION>
                                              THREE MONTHS ENDED JUNE 30,            SIX MONTHS ENDED JUNE 30,
                                              ---------------------------            -------------------------
                                              2002                   2001            2002                 2001
                                              ----                   ----            ----                 ----
<S>                                            <C>                   <C>             <C>                  <C>
OPERATING (LOSS) INCOME:

Domestic brokerage                        $1,970,877               $2,878,105      $3,920,497          $5,119,745
International brokerage                   (7,567,052)                (154,485)     (7,435,835)           (342,510)
General corporate                         (2,562,185)              (1,107,088)     (3,484,371)         (2,014,067)
                                         -----------              -----------     -----------         -----------
Total operating (loss) income             (8,158,360)               1,616,532      (6,999,709)         (2,763,168)
Net investment income (loss) and other       295,884                1,306,648         509,200          (6,350,887)
                                         -----------              -----------     -----------         -----------
(Loss) income before income taxes
  from continuing operations             $(7,862,476)              $2,923,180     $(6,490,509)        $(3,587,719)
                                         ============              ==========     ============        ============
</TABLE>


NOTE 8 -LOSS AT LIMITED

On May 9, 2002, the Company announced that a former employee of Hoenig & Company
Limited ("Limited") had engaged in unauthorized trading in foreign securities
while employed by Limited, in violation of Limited's policies and procedures.
Limited incurred a pre-tax loss of approximately $7.1 million plus approximately
$0.6 million of related expenses from the unauthorized trading which took place
beginning in mid-April 2002. Notwithstanding the loss, Limited is in compliance
with all regulatory capital requirements.

The Company continues to pursue claims against insurers and others relating to
the $7.1 million loss and the unauthorized trading. While the Company believes
that it has meritorious claims, there can be no


                                       8

<PAGE>


assurance that these claims will result in any recovery.


NOTE 9 - SALE OF HOENIG GROUP.

On February 28, 2002, the Company announced that it had signed a merger
agreement providing for Investment Technology Group, Inc. ("ITG") to acquire
Hoenig Group Inc. for approximately $115 million, or $12.55 per share, subject
to, among other things, obtaining stockholder approval and the approval of
regulatory authorities and satisfaction of customary closing conditions.

On July 2, 2002, the Company announced that it had entered into an amendment to
its previously announced merger agreement with ITG. The amendment provides that,
upon completion of the merger, for each share of Company common stock a Company
stockholder will receive $11.35 in cash, plus one right (a "Contingent Payment
Right") entitling the stockholder to receive a cash payment equal to:

     o    (a) the amounts recovered, if any, in connection with the pursuit of
          certain insurance and other claims (net of expenses and applicable
          taxes) related to the loss and unauthorized trading at Limited, plus

          (b) any unexpended portion of the initial funding of the escrow
          established to pay expenses incurred in pursuing such claims, divided
          by

     o    the number of shares of the Company's common stock outstanding plus
          the number of shares of the Company's common stock issuable upon the
          exercise of options outstanding on the date of completion of the
          merger (excluding shares subject to certain incentive stock options).

In no event will more than $1.20 be paid per Contingent Payment Right. The
Company has deposited $2.365 million into the escrow to fund the continued
pursuit of the claims.

The Company has established the close of business on July 17, 2002 as the record
date for the special meeting of stockholders to vote on the merger, and the date
of the special meeting of stockholders is August 26, 2002. It is expected that
the transaction, if approved by the Hoenig Group stockholders and certain
regulatory authorities and if customary closing conditions are satisfied, will
be consummated by the end of the third quarter 2002.

As of June 30, 2002, the Company has incurred $1.2 million ($0.7 million after
taxes) in legal, investment banking and other professional fees and expenses
related to the sale to ITG.



ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

Certain statements in this report that relate to future plans, events or
performance are forward-looking statements. Such statements may include, but are
not limited to, those relating to future growth, industry consolidation,
acquisition and expansion plans, strategic alliances, investments, joint
ventures, sales and other business combinations, plans to address various
technology issues, market risk, the Company's investment activities and its
equity capital requirements. Actual events might differ materially due to a
variety of important factors that cannot be predicted with certainty. These
factors involve risks and uncertainties relating to, among other things, the
risk that the conditions to the closing of the sale to ITG described herein will
not be satisfied and the sale not completed, general economic conditions, market
fluctuations, competitive conditions within the brokerage business, stock market
prices and trading volumes, changes in demand for securities brokerage services,
the Company's ability to recruit and retain highly skilled employees, changes in
U.S. and foreign securities laws and regulations, particularly regarding
independent research and directed brokerage arrangements, trading and investment
activities, litigation and other factors discussed throughout this report.


                                       9

<PAGE>


Sale of Axe-Houghton in Three Transactions

The Company has sold Axe-Houghton and its institutional investment management
businesses in three separate transactions. The first transaction, which was
announced on November 29, 2001 and completed on January 31, 2002, involved the
sale of Axe-Houghton's Core International ADR and Domestic Equity Index
institutional investment management businesses to The Bank of New York.

The second and third transactions to sell the remaining businesses of
Axe-Houghton were announced on February 12, 2002. On March 28, 2002, the Company
sold the Value and Balanced Equity institutional investment management
businesses of Axe-Houghton to Byram Capital Management LLC.

On April 26, 2002, the Company sold all of the stock of Axe-Houghton, together
with its remaining Small Capitalization Growth Equity institutional investment
management businesses, to Axe Holding Corp., an entity formed by the principals
of Palisade Capital Management LLC. Two executives of Axe-Houghton responsible
for managing the small capitalization growth equity-related investment
disciplines received equity in the continuing business after the sale of
Axe-Houghton to the Palisade Capital Management group. These executives had
employment agreements with Axe-Houghton which terminated upon the closing of the
sale of Axe-Houghton to the Palisade Capital Management group. Neither the
Company nor Axe-Houghton was required to make any change of control or other
additional payments to these executives in connection with the sale of
Axe-Houghton.

The Company received $5.5 million from the two Axe-Houghton sales completed
during the first quarter 2002, recognizing a gain of $2.7 million after taxes
and expenses. The Company received an additional $3.2 million from the sale of
Axe-Houghton that was completed on April 26, 2002, recognizing a $1.2 million
gain, after taxes and expenses, in the second quarter 2002. The historical
operating results of Axe-Houghton are presented as discontinued operations in
this report.


The Loss at Hoenig & Company Limited

On May 9, 2002, the Company announced that a former employee of Limited had
engaged in unauthorized trading in foreign securities while employed by Limited,
in violation of Limited's policies and procedures. Limited has incurred a
pre-tax loss of approximately $7.1 million, plus approximately $0.6 million of
related expenses, from the unauthorized trading, which took place beginning in
mid-April 2002. Notwithstanding the loss, Limited is in compliance with all
regulatory capital requirements.

The Company continues to pursue claims against insurers and others relating to
the $7.1 million loss and the unauthorized trading. While the Company believes
that it has meritorious claims, there can be no assurance that these claims will
result in any recovery.


Sale of the Company to ITG

On February 28, 2002, the Company announced that it had signed a merger
agreement providing for Investment Technology Group, Inc. ("ITG") to acquire
Hoenig Group Inc. for approximately $115 million, or $12.55 per share, subject
to, among other things, obtaining stockholder approval and the approval of
regulatory authorities and satisfaction of customary closing conditions.

On July 2, 2002, the Company announced that it had entered into an amendment to
its previously announced merger agreement with ITG. The amendment provides that,
upon completion of the merger, for each share of Company common stock a Company
stockholder will receive $11.35 in cash, plus one right (a "Contingent Payment
Right") entitling the stockholder to receive a cash payment equal to:

     o    (a) the amounts recovered, if any, in connection with the pursuit of
          certain insurance and


                                       10

<PAGE>


          other claims (net of expenses and applicable taxes) related to the
          loss and unauthorized trading at Limited, plus

          (b) any unexpended portion of the initial funding of the escrow
          established to pay expenses incurred in pursuing such claims, divided
          by

     o    the number of shares of the Company's common stock outstanding plus
          the number of shares of the Company's common stock issuable upon the
          exercise of options outstanding on the date of completion of the
          merger (excluding shares subject to certain incentive stock options).

In no event will more than $1.20 be paid per Contingent Payment Right. The
Company has deposited $2.365 million into the escrow to fund the continued
pursuit of the claims.

The Company has established the close of business on July 17, 2002 as the record
date for the special meeting of stockholders to vote on the merger, and the date
of the special meeting of stockholders is August 26, 2002. It is expected that
the transaction, if approved by the Hoenig stockholders and certain regulatory
authorities and if customary closing conditions are satisfied, will be
consummated by the end of the third quarter 2002.

As of June 30, 2002, the Company has incurred $1.2 million ($0.7 million after
taxes) in legal, investment banking and other professional fees and expenses
related to the sale to ITG.


INTRODUCTION

The Company provides global securities brokerage to institutional clients
through its wholly-owned brokerage subsidiaries in the United States, United
Kingdom and Hong Kong. During the periods discussed in this report, the
Company's wholly-owned subsidiary, Axe-Houghton, provided professional asset
management to U.S. public and corporate employee benefit plans, investment
partnerships and other U.S. institutional clients from its offices in the United
States. The Company sold Axe-Houghton in three separate transactions, the last
of which was completed on April 26, 2002. The historical operating results of
Axe-Houghton are reported as discontinued operations.

The Company's principal source of revenues is commissions earned for executing
trades on behalf of its customers. The Company executes trades in equity
securities on the world's major stock exchanges, acting primarily as agent for
its customers and, through March 8, 2002, executed trades in U.S. fixed income
securities on a riskless principal basis. The Company closed its fixed income
trading operations in Boston in March 2002 and reduced the staff of its Boston
domestic equity trading operations in June 2002.

The Company earns commissions in connection with various types of brokerage
services: commissions received in connection with providing independent research
and other services to investment managers; commissions received in exchange for
paying expenses of, or commission refunds to, customers under directed brokerage
arrangements; commissions received in connection with providing proprietary
research; and commissions received for execution-only services.

The Company's profit margin on execution-only brokerage and commissions earned
in connection with providing proprietary research has been higher than that on
commissions earned in connection with independent research and directed
brokerage arrangements because the Company does not incur direct expenses for
research and other services in connection with such activities.

The Company generally expects a certain amount of commissions for every $1 in
independent research, other services and commission refunds provided under
independent research and directed brokerage arrangements. This ratio is
negotiated on an individual customer basis. Ratios fluctuate depending upon the
markets of execution and continue to be under downward competitive pressure in
most of the


                                       11

<PAGE>


markets in which the Company conducts brokerage activities.

The Company's earnings in any period are affected by its ability to earn
commissions under independent research and directed brokerage arrangements on a
timely basis because commission revenues are recorded only when earned, and
related expenses are recorded when incurred. The timing of the receipt of
commissions could cause variations in earnings from year to year and quarter to
quarter. The Company's earnings also may be affected by regulatory changes or
industry sentiment regarding independent research arrangements and directed
brokerage.


FINANCIAL RESULTS

The Company's financial results for the three and six months ended June 30, 2002
were affected by the Axe-Houghton sales and the loss at Limited. The Company's
historical financial results for the periods presented reflect Axe-Houghton as a
discontinued operation.


THREE MONTHS ENDED JUNE 30, 2002 VERSUS JUNE 30, 2001

The Company's financial results for the three months ended June 30, 2002 and
June 30, 2001 are as follows:

Financial Data Three Months Ended June 30,
------------------------------------------
<TABLE>
<CAPTION>
                                                                     2002(1)                            2001
                                                                    --------                           ------
<S>                                                                 <C>                                <C>
Operating Revenues from Continuing Operations                     $25,551,798                       $23,488,283
Operating (Loss) Income from Continuing Operations                 (8,158,360)                        1,616,532
Net Investment Income and Other from Continuing
  Operations                                                          295,884                         1,306,648
(Loss) Income Before Income Taxes from
  Continuing Operations                                            (7,862,476)                        2,923,180
Net (Loss) Income from Continuing Operations                       (6,895,303)                        1,792,385
Net Income from Discontinued Operations                             1,236,757                           357,527
Net (Loss) Income                                                 $(5,658,546)                       $2,149,912

Net (Loss) Income Per Share
Basic

   (Loss) Income from Continuing Operations                            $(0.87)                            $0.23
   Income from Discontinued Operations                                   0.16                              0.04
                                                                         ----                              ----
     Net (Loss) Income Per Share Basic                                  (0.71)                             0.27
                                                                        ======                             ====
Diluted

   (Loss) Income from Continuing Operations                             (0.87)                             0.20
   Income from Discontinued Operations                                   0.16                              0.04
                                                                         ----                              ----
    Net (Loss) Income Per Share Diluted                                $(0.71)                            $0.24
                                                                        ======                             ====
</TABLE>

-----------------------------------------------

(1) Financial data for the three months ended June 30, 2002, excluding the $7.1
million loss at Limited and $0.6 million of related expenses ($6.7 million net
of tax), would be as follows: operating loss from continuing operations of
$466,614, loss from continuing operations before income taxes of $170,730, net
loss from continuing operations of $205,568.


The Company incurred a net loss of $5.7 million for the second quarter 2002, as
compared to net income of $2.1 million for the same period in 2001. The
Company's net loss for the second quarter 2002 includes a net loss from
continuing operations of $6.9 million, partially offset by $1.2 million of net
income from discontinued operations. Excluding the $7.1 million loss at Limited
and related expenses ($6.7 million net of tax), the Company had net loss from
continuing operations of $0.2 million in the


                                       12

<PAGE>


second quarter 2002. In the second quarter 2001, net income from continuing
operations was $1.8 million, and net income from discontinued operations was
$0.4 million.


Continuing Operations

The Company incurred an operating loss from continuing operations of $8.2
million for the second quarter 2002, as compared to operating income from
continuing operations of $1.6 million for the same period in 2001, due primarily
to the $7.1 million loss at Limited and related expenses ($0.6 million).
Excluding the $7.1 million loss and related expenses, operating loss from
continuing operations for the second quarter 2002 was $0.5 million, due to $1.2
million in legal, investment banking and other professional fees and expenses
related to the sale of the Company to ITG and a 31.5% decrease in domestic
brokerage operating income. The decrease in domestic brokerage operating income
reflects an increase in research and services expense as a percentage of
commission revenues and a decrease in execution only business which does not
have any associated research expense for the three months ended June 30, 2002.

Operating revenues from continuing operations for the three months ended June
30, 2002 increased 8.8% to $25.6 million, from $23.5 million during the same
period in 2001. This increase resulted from a 6.7% increase in operating
revenues from domestic brokerage operations and a 22.9% increase in operating
revenues from international brokerage operations.

Operating revenues from domestic brokerage operations for the three months ended
June 30, 2002 increased 6.7% to $21.8 million, as compared to $20.4 million
during the same period in 2001, due to increased trading activity. Operating
income of the Company's domestic brokerage operations for the second quarter
2002 decreased 31.5% to $2.0 million, as compared to $2.9 million during the
same period in 2001, primarily due to an increase in research and services
expenses as a percentage of commission revenues and a decrease in execution only
business which does not have any associated research expense.

Operating revenues from international brokerage operations increased 22.9% to
$3.8 million for the three months ended June 30, 2002, as compared to $3.1
million for the same period in 2001. This increase reflects a 139.4% increase in
operating revenues of the United Kingdom brokerage operations primarily
resulting from increased trading volume in the United Kingdom and Europe, which
more than offset an 11.3% decrease in operating revenues from the Hong Kong
brokerage operations. As a result of the loss at Limited and related expenses,
international brokerage operations incurred an operating loss of $7.6 million
for the three months ended June 30, 2002, as compared to an operating loss of
$0.2 million during the same period in 2001.

Expenses related to independent research and other services provided to the
Company's brokerage clients, including commission refunds, during the three
months ended June 30, 2002 increased 22.5% to $14.1 million, from $11.5 million
during the same period in 2001. These expenses were 55.3% of commission revenues
during the three months ended June 30, 2002, as compared to 49.1% during the
same period in 2001. These expenses increased as a percentage of commission
revenues primarily due to the decrease in execution-only business, which does
not have any associated research and services expenses, and the timing of
research expenses incurred relative to the receipt of commissions earned during
the second quarter 2002.

Clearing, floor brokerage and exchange charges increased 9.5% to $2.8 million
during the three months ended June 30, 2002, from $2.6 million during the same
period in 2001. These expenses represented 11.1% of commission revenues during
both the three months ended June 30, 2002 and the same period in 2001.

Employee compensation increased 5.2% to $5.1 million for the second quarter
2002, from $4.9 million in 2001. Employee compensation expenses for the second
quarter 2002 includes $0.3 million in severance payments relating to the
reduction in personnel in the Company's Boston equity brokerage operations in
June 2002.


                                       13

<PAGE>


All other expenses increased 36.2% to $4.0 million, as compared to $2.9 million
for the same period in 2001. This resulted primarily from $1.2 million in legal,
investment banking and other professional fees and expenses related to the sale
of the Company to ITG, offset by a decrease in expenses from trading errors in
the Company's domestic brokerage operations.

Net investment income and other from continuing operations was $0.3 million
during the second quarter ended June 30, 2002, reflecting, among other things, a
decrease in interest and dividends earned due to lower interest rates. Net
investment income and other from continuing operations was $1.3 million in the
second quarter 2001, of which $0.8 million related to the unrealized gains on
the Hong Kong and London shares.


Discontinued Operations

Revenues from discontinued operations for the three months ended June 30, 2002
decreased 85.6% to $0.3 million, as compared to $2.0 million for the same period
in 2001, as a result of the sale of the remaining businesses of Axe-Houghton
during April 2002.  Net income from discontinued operations increased to $1.2
million during the three months ended June 30, 2002, as compared to $0.4 million
during the same period in 2001, due to the $1.2 million gain, after taxes and
expenses, on the last of the Axe-Houghton sales.


SIX MONTHS ENDED JUNE 30, 2002 VERSUS JUNE 30, 2001

The Company's financial results for the six months ended June 30, 2002 and 2001
are as follows:

Financial Data Six Months Ended June 30,
----------------------------------------
<TABLE>
<CAPTION>

                                                                     2002(1)                           2001(2)
                                                                    ---------                         ---------
<S>                                                                  <C>                                  <C>
Operating Revenues from Continuing Operations                     $50,547,266                      $45,927,406
Operating (Loss) Income from Continuing Operations                 (6,999,709)                       2,763,168
Net Investment Income (Loss) and Other
  from Continuing Operations                                          509,200                       (6,350,887)
(Loss) Before Income Taxes from
Continuing Operations                                              (6,490,509)                      (3,587,719)
Net (Loss) from Continuing Operations                              (6,053,732)                      (1,993,771)
Net Income from Discontinued Operations                             4,081,183                          672,454
Net (Loss)                                                        $(1,972,549)                     $(1,321,317)

Net (Loss) Income Per Share
Basic and Diluted

  (Loss) from Continuing Operations                                    $(0.76)                         $ (0.25)
  Income from Discontinued Operations                                    0.51                             0.08
                                                                         ----                             ----
    Net (Loss) Per Share Basic and Diluted                             $(0.25)                          $(0.17)
                                                                        ======                           ======
</TABLE>

-------------------------------------

(1) Financial data for the six months ended June 30, 2002, excluding the $7.1
loss at Limited and $0.6 million of related expenses ($6.7 million net of tax),
would be as follows: operating income from continuing operations of $692,037,
income from continuing operations before income taxes of $1,201,237, net income
from continuing operations of $636,003, basic earnings per share from continuing
operations of $0.08, and diluted earnings per share from continuing operations
of $0.07.

(2) Financial data for the six months ended June 30, 2001, excluding the $9.2
million ($5.5 million net of tax) impairment write-off of the Company's
investment in InstiPro Group, Inc., would be as follows: net investment income
and other from continuing operations of $2,941,520, income from continuing
operations before income taxes of $5,704,688, net income from continuing
operations of $3,486,229, basic earnings per share from continuing


                                       14

<PAGE>


operations of $0.44, and diluted earnings per share from continuing operations
of $0.39.


The Company incurred a net loss of $2.0 million for the six months ended June
30, 2002 as compared to a loss of $1.3 million for the same period in 2001. The
Company's net loss for the six months ended June 30, 2002 includes a net loss
from continuing operations of $6.1 million, offset by $4.1 million of net income
from discontinued operations. Excluding the $7.1 million loss at Limited and
related expenses ($6.7 million net of tax), net income from continuing
operations for the six months ended June 30, 2002 was $0.6 million. For the six
months ended June 30, 2001, the Company had a net loss from continuing
operations of $2.0 million and net income from discontinued operations of $0.7
million. Net income from continuing operations for the six months ended June 30,
2001, excluding the $9.2 million InstiPro Group impairment write-off ($5.5
million net of tax), was $3.5 million.


Continuing Operations

The Company incurred an operating loss from continuing operations of $7.0
million for the six months ended June 30, 2002, as compared to operating income
from continuing operations of $2.8 million for the same period in 2001,
primarily due to the $7.1 million loss at Limited and $0.6 million in related
expenses. Excluding the $7.1 million loss at Limited and related expenses,
operating income from continuing operations for the six months ended June 30,
2002 decreased 75.0% to $0.7 million, due primarily to a 23.4% decrease in
domestic brokerage operating income during the period and $1.2 million in legal,
investment banking and other professional fees and expenses related to the sale
of the Company to ITG. The decrease in domestic brokerage operating incomes
reflects an increase in research and services expense as a percentage of
commission revenues and a decrease in execution only business which does not
have any associated research expense for the six months ended June 30, 2002.

Operating revenues from continuing operations for the six months ended June 30,
2002 increased 10.1% to $50.5 million, from $45.9 million during the same period
in 2001. This increase resulted from a 7.4% increase in operating revenues from
domestic brokerage operations and a 28.6% increase in operating revenues from
international brokerage operations.

Operating revenues from domestic brokerage operations for the six months ended
June 30, 2002 increased 7.4% to $43.1 million, as compared to $40.2 million
during the same period in 2001, due to increased trading activity. Operating
income of the Company's domestic brokerage operations for the six months ended
June 30, 2002 decreased 23.4% to $3.9 million, as compared to $5.1 million
during the same period in 2001, primarily due to an increase in research and
services expenses as a percentage of commission revenues and a decrease in
execution only business which does not have any associated research expense.

Operating revenues from international brokerage operations increased 28.6% to
$7.4 million for the six months ended June 30, 2002, as compared to $5.8 million
for the same period in 2001. This increase reflects a 154.9% increase in
operating revenues of the United Kingdom brokerage operations, primarily
resulting from new account activity and increased trading volume in the United
Kingdom and Europe, which more than offset a 14.8% decrease in operating
revenues from the Hong Kong brokerage operations. Including the loss at Limited
plus related expenses, international brokerage operations incurred an operating
loss of $7.4 million for the six months ended June 30, 2002, as compared to an
operating loss of $0.3 million during the same period in 2001.

Expenses related to independent research and other services provided to the
Company's brokerage clients during the six months ended June 30, 2002, including
commission refunds, increased 20.2% to $27.7 million, from $23.0 million during
the same period in 2001. These expenses were 55.1% of commission revenues during
the six months ended June 30, 2002, as compared to 50.5% during the same period
in 2001. These expenses increased as a percentage of commission revenues
primarily due to the decrease in execution-only business, which does not have
any associated research and services expenses, and the timing of research
expenses incurred relative to the receipt of commissions earned during 2002.


                                       15

<PAGE>


Clearing, floor brokerage and exchange charges increased 9.6% to $5.7 million
during the six months ended June 30, 2002, from $5.2 million during the same
period in 2001. These expenses represented 11.2% of commission revenues during
the six months ended June 30, 2002, as compared to 11.3% of commission revenues
during the same period in 2001. The decrease in these expenses as a percentage
of commission revenues was primarily due to the absence in 2002 of commissions
earned by the Company under correspondent broker arrangements where the Company
executes trades on behalf of other brokers. Expenses associated with these
arrangements had been higher than on other types of brokerage services provided
by the Company.

Employee compensation increased 5.2% to $10.1 million for the second quarter
2002, from $9.6 million in 2001. The increase in employee compensation expenses
for the six months ended June 30, 2002 was primarily due to $0.5 million in
severance payments relating to the closing of the Company's Boston fixed income
brokerage operations and the reduction in personnel at the Company's Boston
domestic equity trading operations.

Net investment income and other from continuing operations was $0.5 million
during the six months ended June 30, 2002. The Company had a net investment loss
and other from continuing operations of $6.4 million during the same period in
2001, due to the first quarter 2001 pre-tax impairment write-off of the
Company's $9.2 million investment in InstiPro. Net investment income and other
from continuing operations for the six months ended June 30, 2001 before the
InstiPro write-off was $2.9 million, which included $1.5 million in realized and
unrealized gains on the Hong Kong and London shares.

All other expenses increased 19.3% to $6.4 million, from $5.4 million during the
same period in 2001. This increase was primarily due to $1.2 million in legal,
investment banking and other professional fees and expenses related to the sale
of the Company to ITG, offset by a decrease in expenses relating to trading
errors in the Company's domestic brokerage operations for the six months ended
June 30, 2002.


Discontinued Operations

Revenues from discontinued operations for the six months ended June 30, 2002
decreased 59.1% to $1.7 million as compared to $4.0 million for the same period
in 2001, as a result of the sale of the Axe-Houghton businesses during the first
six months of 2002. Net income from discontinued operations for the six months
ended June 30, 2002 increased to $4.1 million, from $0.7 million during the same
period in 2001, due to the $3.9 million gain, after taxes and expenses, on the
Axe-Houghton sales.


LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2002, the Company had cash, U.S. Government obligations, net
accounts receivable and other net investments of $55.3 million. All receivables
from correspondent brokers and dealers are deemed to be fully collectible, and
no provision for uncollectibles was required.

The Company believes that its current capital resources and liquidity, plus
additional funds generated by operations, will be sufficient to meet current and
future operating needs.

The Company maintains overseas overdraft facilities, which bear variable rates
of interest based upon prevailing market rates in the United Kingdom, Europe,
Hong Kong and Japan. These facilities are used to facilitate the settlement of
daily trading activities. There were no amounts outstanding under these
facilities as of June 30, 2002.

The Company announced on May 9, 2002 that a former employee of Limited, the
Company's United Kingdom brokerage subsidiary, had engaged in unauthorized
trading in foreign securities while employed by Limited, resulting in a pre-tax
loss of approximately $7.1 million plus $0.6 million in expenses.


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<PAGE>


Pursuant to the terms of the amendment to the Company's merger agreement with
ITG, on July 5, 2002, Limited deposited $2.365 million in escrow to fund the
continued pursuit of insurance and other claims relating to the $7.1 million
loss at Limited and the unauthorized trading.


IMPACT OF INFLATION

The Company's business is not capital intensive, and management believes that
the financial results as reported would not have been significantly affected had
such results been adjusted to reflect the effects of inflation or price changes.
However, inflation affects the cost of operations, particularly salaries and
related benefits.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

All of the Company's investments are subject to certain market risks. Market
risk represents the risk of loss that may result from the potential change in
the market value, cash flows and earnings of an investment as a result of
fluctuations in interest rates, foreign exchange rates and equity prices. The
Company has established procedures to manage its exposure to market fluctuations
and changes in the market value of its investments.

The Company is exposed to foreign currency risk arising from exchange rate
fluctuations on its foreign denominated bank accounts, which are used in its
international brokerage operations. The Company's primary exposure is in U.K.
Pounds Sterling and Hong Kong Dollars. During the periods presented in this
report, the Company was exposed to foreign currency risk with respect to its
investment in the London shares. The Company sold all of its remaining London
shares during the first quarter 2002. The Company mitigates its foreign exchange
exposure by maintaining foreign currency balances only to the extent necessary
to meet the operational needs of its international subsidiaries.

In addition, as a result of its daily brokerage activities, the Company may hold
(normally overnight) long and short security positions. These positions, which
are valued at fair market value, are a result of trading errors that occur in
the ordinary course of business. These positions are normally closed out during
the next trading day.

For information regarding the Company's exposure to certain market risks, see
Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001.
Significant changes which have occurred since December 31, 2001 are as follows:

The Company maintained an investment in an unaffiliated multi-manager,
market-neutral limited partnership. The Company liquidated this investment,
valued at $1.5 million, during the first quarter 2002.

At December 31, 2001, the Company owned 99,945 London shares with a market value
of $0.6 million. All of the remaining London shares were sold during the first
quarter 2002. The Company valued the London shares at market.

Through its discontinued operations, Axe-Houghton, the Company maintained
investments in two equity limited partnerships. Axe-Houghton was the general
partner of each of these limited partnerships. During the periods presented in
this report, these limited partnership interests are reflected in the
Consolidated Statement of Financial Condition and in discontinued operations in
the Consolidated Statements of Income under the equity method of accounting. The
Company dissolved these limited partnerships and liquidated its investments in
the partnerships in March and April 2002. The Company received the value of
these limited partnership investments upon their liquidation.


                                       17

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On May 9, 2002, the Company announced that a former employee of Limited had
engaged in unauthorized trading in foreign securities while employed by Limited,
in violation of Limited's policies and procedures. Limited incurred a pre-tax
loss of approximately $7.1 million, plus approximately $0.6 million of related
expenses, from the unauthorized trading which took place beginning in mid-April
2002.

Pursuant to the amendment to the Company's merger agreement with ITG, on July 5,
2002, Limited deposited $2.365 million into escrow to fund the pursuit of claims
against insurers and others relating to the $7.1 million loss and the
unauthorized trading. While the Company believes that it has meritorious claims,
there can be no assurance that these claims will result in any recovery.

Notwithstanding the loss and the $2.365 million deposit to the escrow, Limited
is in compliance with all regulatory capital requirements.


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                           PART II - OTHER INFORMATION


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(A)  EXHIBITS

     99.1  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002.


(B)  REPORTS ON FORM 8-K

     1.   Form 8-K, dated May 13, 2002, Item 2. (Announcing completion of sale
          of all of the stock of Axe-Houghton Associates, Inc. and remaining
          institutional investment businesses to Axe Holding Corp.)


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                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                                               Hoenig Group Inc.



Date: August 14, 2002                        By:    /s/Fredric P. Sapirstein
                                                    ------------------------
                                                    Fredric P. Sapirstein,
                                                    Chairman and
                                                    Chief Executive Officer



Date: August 14, 2002                         By:    /s/Alan B. Herzog
                                                     -----------------
                                                     Alan B. Herzog,
                                                     Chief Operating Officer and
                                                     Chief Financial Officer

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                                  EXHIBIT INDEX

Exhibit No.                                 Description
-----------                                 -----------

   99.1            Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                   Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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