<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
March 31, 2000

                                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 May 12, 2000, there were 8,178,805 shares of common stock, par value $0.01
per share, outstanding.


<PAGE>



                                HOENIG GROUP INC.
                                    FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2000

                                      INDEX


                                                                         PAGE

PART I - FINANCIAL INFORMATION

    Item 1.  Financial Statements

          Unaudited Consolidated Statements of Financial Condition -
          March 31, 2000 and December 31, 1999                              1

          Unaudited Consolidated Statements of Income -
          Three Months Ended March 31, 2000 and 1999                        2

          Unaudited Consolidated Statements of Comprehensive Income -
          Three Months Ended March 31, 2000 and 1999                        3

          Unaudited Consolidated Statements of Cash Flows -
          Three Months Ended March 31, 2000 and 1999                        4

          Notes to Unaudited Consolidated Financial Statements            5-8

    Item 2.  Management's Discussion and Analysis
             of Financial Condition and Results of Operations            8-13

    Item 3.  Quantitative and Qualitative Disclosures
             About Market Risk                                             13


PART II - OTHER INFORMATION

     Item 6. Exhibits and Reports on Form 8-K                              14

     Signatures                                                            15

     Exhibit Index                                                         16





<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                HOENIG GROUP INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                      MARCH 31, 2000 AND DECEMBER 31, 1999
                                   (UNAUDITED)

<TABLE>
<CAPTION>
ASSETS                                                              MARCH 31, 2000                  DECEMBER 31, 1999
                                                                    --------------                  -----------------
<S>                                                                  <C>                               <C>
Cash and equivalents                                                 $27,075,759                       $28,554,972
U.S. Government obligations, at market value                          12,479,250                        15,088,027
Receivables from correspondent brokers and dealers                    17,634,361                         8,076,725
Receivables from customers                                               605,530                         2,269,191
Equipment, furniture and leasehold improvements,
   net of accumulated depreciation and amortization                    2,082,907                         1,909,907
Securities owned, at market value                                      1,952,658                         4,964,494
Exchange memberships, at cost                                          1,321,235                         1,321,235
Investment management fees receivable                                  2,444,565                         1,927,869
Deferred research/services expense                                     1,705,649                         1,094,074
Investment in limited partnerships                                     1,997,467                         1,869,014
Other assets                                                           3,733,286                         3,432,104
                                                                       ---------                         ---------
   Total Assets                                                      $73,032,667                       $70,507,612
                                                                     ===========                       ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Accrued research/services payable                                    $10,285,900                        $8,595,219
Accrued compensation                                                   3,586,584                         9,963,838
Payable to brokers and dealers                                         1,116,023                         2,543,174
Payable to customers                                                  10,857,116                         2,087,767
Accrued expenses                                                       1,234,834                         1,423,831
Securities sold, but not yet purchased                                   119,125                         3,287,061
Bank loan payable                                                        814,678                            20,553
Other liabilities                                                      2,004,272                         1,333,330
                                                                       ---------                         ---------
   Total Liabilities                                                  30,018,532                        29,254,773
                                                                      ----------                        ----------
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value per share;
Voting-authorized 40,000,000 shares, issued
- 10,926,150 shares in 2000 and 10,895,150 in 1999                       109,262                           108,952
Additional paid in capital                                            27,998,029                        27,991,857
Accumulated other comprehensive loss                                   (889,875)                         (873,016)
Retained earnings                                                     33,058,053                        31,253,880
                                                                      ----------                        ----------
                                                                      60,275,469                        58,481,673
Less restricted stock                                                  (187,500)                         (225,000)
Less treasury stock at cost - 2,747,345
   shares in 2000 and 2,739,845 shares in 1999                      (17,073,834)                      (17,003,834)
                                                                     -----------                      ------------
Total Stockholders' Equity                                            43,014,135                        41,252,839
                                                                      ----------                      ------------
   Total Liabilities and Stockholders' Equity                        $73,032,667                       $70,507,612
                                                                     ===========                       ===========
</TABLE>


            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


                                        1
<PAGE>


                                HOENIG GROUP INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED MARCH 31,
                                                                ---------------------------------------------
OPERATING REVENUES                                                   2000                             1999
                                                                     ----                             ----
<S>                                                               <C>                             <C>
 Gross commissions                                                $23,413,235                     $18,648,058
 Investment management fees                                         3,143,834                       1,957,767
 Other                                                                 57,475                          14,888
                                                                   ----------                      ----------
     Total operating revenues                                      26,614,544                      20,620,713

EXPENSES
Clearing, floor brokerage and
     exchange charges                                               2,549,154                       2,415,407
Employee compensation                                               6,841,859                       5,721,581
Independent research and other services                            11,707,682                       8,182,825
Other                                                               2,967,101                       2,742,612
                                                                   ----------                      ----------
     Total expenses                                                24,065,796                      19,062,425
                                                                   ----------                      ----------

OPERATING INCOME                                                    2,548,748                       1,558,288

INVESTMENT INCOME AND OTHER
 Interest, dividends                                                  598,900                         469,454
 Gain (loss) on investments, other                                   (35,475)                         227,528
                                                                     --------                         -------
 Net investment income and other                                      563,425                         696,982

 Income before income taxes                                         3,112,173                       2,255,270
 Provision for income taxes                                         1,308,000                       1,037,688
                                                                   ----------                     -----------
 NET INCOME                                                        $1,804,173                     $ 1,217,582
                                                                   ==========                     ===========
 NET INCOME PER SHARE
       Basic                                                       $      .22                     $       .14
                                                                   ==========                     ===========
       Diluted                                                     $      .20                     $       .13
                                                                   ==========                     ===========

 WEIGHTED AVERAGE SHARES OUTSTANDING
       Basic                                                        8,174,541                       8,636,392
                                                                    =========                       =========
       Diluted                                                      9,055,846                       9,363,098
                                                                    =========                       =========
</TABLE>


            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


                                        2
<PAGE>

                                HOENIG GROUP INC.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED MARCH 31,
                                                   ---------------------------------
                                                     2000                   1999
                                                     ----                   ----
<S>                                                <C>                    <C>
Net income                                         $1,804,173             $1,217,582
                                                   ----------             ----------
Other comprehensive income (loss),
     net of tax

     Foreign currency translation adjustment         (26,702)               (71,248)
     Tax expense (benefit)                            (9,843)               (30,210)
                                                     --------               --------
     Other comprehensive income (loss)               (16,859)               (41,038)
                                                     --------               --------
Comprehensive income                               $1,787,314             $1,176,544
                                                   ==========             ==========
</TABLE>











            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS




                                        3
<PAGE>



                                HOENIG GROUP INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED MARCH 31,
                                                                        -----------------------------------------
                                                                             2000                     1999
                                                                             ----                     ----
<S>                                                                       <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                               $1,804,173                $1,217,582
 Adjustments to reconcile net income
  to net cash provided by (used in) operating activities:
  Depreciation and amortization                                              255,554                   363,984
  Loss on disposal of fixed assets                                             4,286
  Foreign currency translation adjustment                                   (16,859)                  (41,038)
  Issuance of stock compensation                                               --                       39,375
  Issuance of restricted stock                                                37,500                    37,500
Changes in assets and liabilities:
  Securities owned, net                                                  (2,636,904)                    63,836
  Receivable from correspondent brokers and dealers                      (9,557,636)                 (453,522)
  Receivable from customers                                                1,663,661               (3,070,312)
  Investment management fees receivable                                    (516,696)                  (44,546)
  Payable to customers                                                     8,769,349               (1,052,250)
  Deferred research/services expense                                       (611,575)                 (292,690)
  Other assets                                                             (391,326)                   373,986
  Payable to brokers and dealers                                         (1,427,151)                 3,106,249
  Accrued research/services payable                                        1,690,681               (1,049,680)
  Accrued compensation                                                   (6,377,254)               (4,553,494)
  Accrued expenses                                                         (188,997)                    57,102
  Other liabilities                                                          670,942                   244,282
                                                                         -----------               -----------
Net cash used in operations                                              (6,828,252)               (5,053,636)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment in U.S. Government obligations                                2,608,777                 (670,457)
  Investment in limited partnerships, at equity                            (128,453)                 1,639,673
  Investment in securities                                                 2,480,804                   662,076
  Purchases of equipment, furniture and leasehold
     improvements                                                          (342,696)                 (164,234)
                                                                           ---------                 ---------
Net cash provided by investing activities                                  4,618,432                 1,467,058

CASH FLOWS FROM FINANCING ACTIVITIES:
  Treasury stock purchased                                                  (70,000)               (1,094,476)
  Issuance of common stock                                                     6,482                   113,461
  Short-term bank loan payable                                               794,125                    49,123
                                                                             -------                 ---------
Net cash provided by (used in) financing activities                          730,607                 (931,892)

  Net decrease in cash and equivalents                                   (1,479,213)               (4,518,470)
  Cash and equivalents beginning of period                                28,554,972                19,575,824
                                                                          ----------                ----------

  Cash and equivalents end of period                                     $27,075,759               $15,057,354
                                                                         ===========               ===========
  Supplemental disclosure of cash flow information:
         Interest paid                                                   $   200,979               $    24,826
                                                                         ===========               ===========
         Taxes paid                                                      $   228,922               $   271,418
                                                                         ===========               ===========
</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 March 31, 2000 and December 31, 1999,
and the results of its operations, changes in comprehensive income and changes
in cash flows for the three months ended March 31, 2000 and 1999. The
consolidated financial statements included herein have been prepared by the
Company without independent audit. Certain information normally included in the
financial statements and related notes prepared in accordance with generally
accepted accounting principles 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, 1999. The results of operations for the period ended March 31, 2000 are not
necessarily indicative of operating results for the full year.

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 $100,000 or
one-fifteenth of aggregate indebtedness. At March 31, 2000, Hoenig's minimum
required net capital was approximately $746,000, its net capital ratio was
 .74 to 1, and its actual net capital was approximately $15,073,000, which was
approximately $14,327,000 in excess of regulatory requirements. Hoenig's Tokyo
office (a branch of Hoenig) satisfied its March 31, 2000 capital requirement
of approximately (Yen)25,000,000 ($244,000). 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
March 31, 2000 was approximately (Pounds Sterling)347,000 ($553,000); it had
eligible capital of approximately (Pounds Sterling)838,000 ($1,335,000), and
excess financial resources at such date of approximately (Pounds
Sterling)491,000 ($782,000). Hoenig (Far East) Limited ("Far East") is required
to maintain liquid capital of the greater of HK$3,000,000 ($385,000) or 5% of
average quarterly total liabilities. Far East's required liquid capital was
approximately HK$16,080,000 ($2,065,000) at March 31, 2000, and it had actual
liquid capital of approximately HK$60,937,000 ($7,824,000) and excess liquid
capital of approximately HK$44,857,000 ($5,759,000).

NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS.

         Axe-Houghton Associates, Inc., the Company's wholly-owned asset
management subsidiary ("Axe-Houghton"), is the general partner of two limited
partnerships and maintains investments in each of the partnerships.
Axe-Houghton's partnership investments were 20.26% ($702,446) and 0.51%
($70,994) at March 31, 2000, and 20.26% ($654,776) and 0.51% ($65,412) at
December 31, 1999. Axe-Houghton does not maintain control of the partnerships
for consolidation purposes. These investments are accounted for under the equity
method.

         The Company also maintains an investment in an unaffiliated
multi-manager, market-neutral limited partnership. This multi-manager limited
partnership, which is managed by a professional money manager, makes investments
in other unaffiliated limited partnerships and funds which employ a variety of
alternative investment strategies. These strategies include relative-value,
event-driven, hedged-directional, convertible arbitrage, convertible hedging and
basis spread trading. This investment represented less than a 5% interest in the
partnership at March 31, 2000, and is accounted for at fair

                                       5




<PAGE>

market value. The value of this investment was $1.2 million and $1.1 million at
March 31, 2000 and December 31, 1999, respectively.

NOTE 4 - FINANCIAL INSTRUMENTS.

         The Company maintains a diversified portfolio of investment grade
preferred stock and U.S. Treasury futures used to hedge the preferred stock
positions. This investment is managed by a professional money manager and uses
or includes derivative financial instruments for the purpose of reducing
exposure to certain investment risks, including interest rate fluctuations. This
investment is accounted for at fair market value based upon available market
information and valuations received from the manager. Changes in the market
value, as well as gains or losses resulting from the termination or maturity of
these instruments, are recognized as gains or losses on investments in the
period in which they occur. The Company does not hold financial instruments for
trading purposes.

         During the three months ended March 31, 2000, the Company reduced its
investment in the diversified portfolio of preferred stocks and U.S. Treasury
futures and options to hedge the preferred stock positions by $2.3 million to
$1,878,214 as of March 31, 2000, which reflects a loss of $0.2 million during
the first quarter 2000 that was offset by dividend and interest income of $0.1
million. The value of this investment was $4,359,018 at December 31, 1999. The
Company liquidated the remaining balance of this investment during April 2000.

NOTE 5- EARNINGS PER SHARE.

         The Financial Accounting Standards Board ("FASB") has issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128").
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:

                                                THREE MONTHS ENDED MARCH 31,
                                                ----------------------------
                                                   2000              1999
                                                   ----              ----

Net income available to common stockholders     $1,804,173        $1,217,582
       Weighted average shares outstanding       8,174,541         8,636,392
       Effect of dilutive instruments
         Employee stock awards                     881,305           726,706
                                                 ---------         ---------
       Total weighted average diluted shares     9,055,846         9,363,098
                                                 ---------         ---------

Basic earnings per share                         $     .22         $     .14
                                                 =========         =========
Diluted earnings per share                       $     .20         $     .13
                                                 =========         =========

NOTE 6- SEGMENT REPORTING.

         The FASB has issued SFAS 131, "Disclosure About Segments of an
Enterprise and Related Information," to assist financial statement users in
assessing the performance of an enterprise and its


                                        6
<PAGE>

prospects for future cash flows, and to make informed decisions about the
enterprise. The Company has three reportable operating segments: domestic
brokerage, international brokerage and asset management. 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, Hong Kong and
Tokyo) brokerage operations. In attributing commission revenues to its brokerage
segments, the Company primarily relies on the geographic location of the
customer. The Company's wholly-owned asset management subsidiary provides
professional investment management to U.S. public and corporate employee benefit
plans, investment partnerships and other U.S. institutional clients from its
U.S. office.

         The accounting policies of the 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, 1999. There
have been no material changes to the Company's segment presentation in 2000. The
Company evaluates performance based upon operating income or loss, not including
interest and investment income, as well as certain intercompany expenses. The
Company does not allocate certain corporate assets (goodwill and certain fixed
assets) to its reportable segments.


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

<TABLE>
<CAPTION>
THREE MONTHS ENDED                       DOMESTIC        INTERNATIONAL
MARCH 31, 2000                           BROKERAGE         BROKERAGE        ASSET MGMT          TOTAL
------------------                       ---------         ---------        ----------          -----
<S>                                     <C>               <C>                 <C>           <C>
Revenues from external customers        $18,876,594       $ 4,594,116         $3,143,834    $26,614,544
Segment operating income                  2,086,615           321,540          1,308,853      3,717,008
Segment assets                           30,592,448        27,985,448          7,623,213     66,201,109
</TABLE>


<TABLE>
<CAPTION>
THREE MONTHS ENDED                       DOMESTIC        INTERNATIONAL
MARCH 31, 1999                           BROKERAGE         BROKERAGE        ASSET MGMT          TOTAL
------------------                       ---------         ---------        ----------          -----
<S>                                     <C>               <C>                 <C>           <C>
Revenues from external customers        $15,202,299       $ 3,460,647         $1,957,767    $20,620,713
Segment operating income (loss)           2,391,073         (381,357)            637,764      2,647,480
Segment assets                           31,401,021        15,838,586          4,572,698     51,812,305
</TABLE>

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

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED MARCH 31,
                                       ----------------------------
                                       2000                    1999
                                       ----                    ----
<S>                                 <C>                    <C>
OPERATING REVENUES:
Domestic brokerage                  $18,876,594            $15,202,299
International brokerage               4,594,116              3,460,647
Asset management                      3,143,834              1,957,767
                                    -----------            -----------
Total operating revenues            $26,614,544            $20,620,713
                                    ===========            ===========
</TABLE>


                                        7
<PAGE>


<TABLE>
<CAPTION>
OPERATING INCOME (LOSS):
<S>                                  <C>                    <C>
Domestic brokerage                   $2,086,615             $2,391,073
International brokerage                 321,540              (381,357)
Asset management                      1,308,853                637,764
General corporate                   (1,168,260)            (1,089,192)
                                    -----------            -----------
Total operating income                2,548,748              1,558,288
Interest & investment income            563,425                696,982
                                     ----------             ----------
Income before income taxes           $3,112,173             $2,255,270
                                     ==========             ==========
</TABLE>

NOTE 7 - SUBSEQUENT EVENTS

On May 10, 2000, the Company committed to make a $7.5 million strategic
investment in InstiPro Group, Inc., the parent company of InstiPro, Inc., a new
business-to-business (B2B) on-line brokerage firm. The investment consists of
convertible notes and a warrant. The Company made an initial investment of $5
million on May 10, 2000 and has committed to invest another $2.5 million over
the next year upon InstiPro's achievement of certain goals. Once the Company
completes the investment, it will own notes convertible into approximately 35%
of the outstanding stock of InstiPro Group, Inc. and a warrant to purchase an
additional 10%.

The Company also has entered into consulting and licensing agreements with
InstiPro to provide the Company with InstiPro's technology and expertise in
providing active, on-line trading capabilities and other investment tools to
hedge funds and other institutional investors.

InstiPro expects to offer its partners, including Internet sites and financial
service organizations, a turnkey online brokerage service that will enable them
to deliver investment services to their retail customers directly from their
websites under a co-branded name.

On May 11, 2000, the Company determined to close its Tokyo brokerage operations.
As a result of the closing, the Company will incur in the second quarter 2000 a
one-time charge to earnings of approximately $989,000 before taxes and $570,000
($0.07 per share basic and $0.06 per share diluted) after taxes. The closing
will result in a positive cash flow and an increase in stockholders' equity of
approximately $143,000 in the second quarter 2000. Of the $989,000 pre-tax
charge, $712,000 relates to the recognition of the foreign currency translation
loss previously reflected in the Company's financial statements as a reduction
of stockholders' equity. The Company expects to complete the closing of the
Tokyo office in the next three to six months.


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, cost reduction measures taken
to address operating losses in certain international operations, including the
risk that such measures will not improve the profitability of international
brokerage operations, industry consolidation, acquisition and expansion plans,
strategic alliances, joint ventures 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, general economic conditions, market fluctuations, competitive
conditions within the brokerage and asset management businesses, changes in the
worldwide business environment affecting Internet and e-business proliferation,
stock market prices and trading volumes, changes in demand for asset management
and securities brokerage services, fluctuations in asset management

                                        8
<PAGE>

performance, 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.

INTRODUCTION

The Company provides global securities brokerage to institutional clients
through its wholly-owned brokerage subsidiaries in the United States, United
Kingdom, Hong Kong and Japan. The Company's wholly-owned subsidiary,
Axe-Houghton Associates, Inc., provides 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'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 also executes trades in U.S. fixed income securities on an
agency and riskless principal basis. The Company earns commissions in connection
with four 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 continue to be under downward
competitive pressure in most of the 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 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.
Two of the Company's international customers recently indicated that, beginning
in 2000, they will no longer engage in independent research arrangements. The
loss of business from these customers could have a material affect on the
Company's international brokerage operations.

During the fourth quarter of 1998, the Company began restructuring its brokerage
operations in Tokyo as part of an effort to reduce operating costs and improve
the profitability of its international brokerage operations. The Company
completed the restructuring during the first quarter 1999. The Company's Tokyo
operations then focused on sales and marketing activities. The Company has
continued to evaluate maintaining operations in Tokyo. On May 11, 2000, the
Company determined to close its Tokyo brokerage operations. As a result of the
closing, the Company will incur in the second quarter 2000 a one-time charge to
earnings of approximately $989,000 before taxes and $570,000 ($0.07 per share
basic and $0.06 per share diluted) after taxes. The closing will result in a
positive cash flow and an increase in stockholders' equity of approximately
$143,000 in the second quarter 2000. Of the $989,000 pre-tax charge, $712,000
relates to the recognition of the foreign currency translation loss previously
reflected in


                                        9
<PAGE>

the Company's financial statements as a reduction of stockholders' equity. The
Company expects to complete the closing of the Tokyo office in the next three to
six months.

The Company's second largest source of revenues is investment management fees
earned by Axe-Houghton, the Company's asset management subsidiary, in connection
with the provision of investment management services to institutional clients.
Investment management fee revenues are a function of assets under management and
the management fees charged. The profit margin on the Company's asset management
business is higher than those on the Company's brokerage activities and also
varies with the types of asset management services provided by the Company.

The amount of assets under management is affected by numerous factors, including
the ability to attract and retain clients and highly skilled personnel,
investment performance results, the number and variety of investment disciplines
offered and the capacity limitations of such disciplines (such as small
capitalization growth equity-related disciplines), the market performance of
particular investment disciplines, as well as the performance of the securities
markets generally. The Axe-Houghton investment professionals who are responsible
for managing small capitalization growth equity-related assets are employed
under contracts expiring on December 31, 2000. Axe-Houghton currently is
negotiating new employment arrangements with these individuals, but no
assurances can be given as to when or how these negotiations will conclude. The
financial results of the Company could be materially adversely affected if such
negotiations are not successfully resolved.

As the brokerage and asset management industries continue to consolidate, the
Company considers various strategies to enhance stockholder value. These
include, among others, strategic alliances, investments, and joint ventures;
spin-offs; purchase, sale or merger transactions with other companies; a
reorganization of the Company; and other similar transactions. In considering
any of these strategies, the Company evaluates the consequences of such strategy
including, among other things, the tax effects of the transaction and the
accounting consequences of the transaction. In addition, such strategies could
have various other significant consequences, including changes in the
management, control or operational or acquisition strategies of the Company.
There can be no assurance that any one of these strategies will be undertaken,
or that, if undertaken, any such strategy will be completed successfully.

THREE MONTHS ENDED MARCH 31, 2000 VERSUS MARCH 31, 1999

The Company's operating income for the three months ended March 31, 2000
increased 63.6% to $2.5 million, as compared to $1.6 million during the same
period in 1999. The increase in operating income for the first quarter ended
March 31, 2000 is primarily attributable to an increase in operating income from
international brokerage operations to $0.3 million from a loss of $0.4 million
during the same period in 1999 and a 105.2% increase in operating income from
asset management operations. The Company's net income for the three months ended
March 31, 2000 increased 48.2% to $1.8 million, as compared to $1.2 million
during the same period in 1999.

Operating revenues increased 29.1% to $26.6 million for the three months ended
March 31, 2000 from $20.6 million during the same period in 1999. This resulted
primarily from a 24.2% increase in operating revenues from domestic brokerage
operations, a 32.8% increase in operating revenues from international brokerage
operations and a 60.6% increase in investment management fee revenues.

Operating revenues from the Company's domestic brokerage operations for the
three months ended March 31, 2000 increased 24.2% to $18.9 million, as compared
to $15.2 million during the same period in 1999 due to increased trading
activity. Operating income of the Company's domestic brokerage operations
decreased 12.7% to $2.1 million for the three months ended March 31, 2000, as
compared to $2.4 million during the same period in 1999, primarily due to an
increase in independent research and


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services expense.

Operating revenues from international brokerage operations increased 32.8% to
$4.6 million for the three months ended March 31, 2000, as compared to $3.5
million during the same period in 1999, as a result of an 84.0% increase in
commission revenues earned by the Company's Hong Kong brokerage operations,
offset by a 20.2% decrease in revenues earned in Japan following the
restructuring of the Company's Tokyo operations.

Operating income from international brokerage operations increased to $0.3
million for the three months ended March 31, 2000, as compared to an operating
loss of $0.4 million during the same period in 1999. Operating revenues from
international brokerage operations represented 17.3% of total operating revenues
during the three months ended March 31, 2000, as compared to 16.8% during the
same period in 1999. Operating income of international brokerage operations for
the three months ended March 31, 1999 includes non-recurring operating expenses
of approximately $0.3 million related to the restructuring of the Company's
brokerage operations in Tokyo, Japan, which was completed as of March 31, 1999.

Investment management fee revenues increased 60.6% to $3.1 million during the
three months ended March 31, 2000, as compared to $2.0 million in 1999. This
increase in investment management fee revenues is due to an increase in the
percentage of assets managed in small capitalization growth equity-related
disciplines, which assets are managed at the Company's highest fee rates. Assets
managed in the Small Capitalization Growth Equity discipline, the Company's
first small capitalization growth discipline, increased 82.5% to $1.3 billion as
of March 31, 2000 (25.7% of total assets under management as of March 31, 2000)
from $728.4 million as of March 31, 1999 (18.6% of total assets under management
as of March 31, 1999), as a result of additional funds received from existing
clients, as well as appreciation of existing assets. Total assets under
management increased 32.0% to $5.2 billion as of March 31, 2000 from $3.9
billion as of March 31, 1999. Total assets under management were $4.96 billion
at December 31, 1999. Total assets under management increased primarily due to
investment performance, the receipt of additional assets from existing Small
Capitalization Growth Equity clients, and the development of two new small
capitalization growth equity-related investment disciplines, Focused Growth
Equities and Technology Growth, which together represented $297 million of
assets under management at March 31, 2000, as compared to $26.8 million at March
31, 1999 and $181 million at December 31, 1999. Operating income of the
Company's asset management operations for the three months ended March 31, 2000
increased 105.2% to $1.3 million from $0.6 million during the same period in
1999, as a result of the growth in assets under management.

Expenses related to independent research and other services provided to the
Company's brokerage clients, including commission refunds, during the three
months ended March 31, 2000 increased 43.1% to $11.7 million from $8.2 million
during the same period in 1999. These expenses were 50.0% of commission revenues
during the three months ended March 31, 2000, as compared to 43.9% during the
same period in 1999. These expenses increased as a percentage of commission
revenues primarily due to the timing of research expense incurred relative to
the receipt of commissions earned during the three months ended March 31, 2000.

Clearing, floor brokerage and exchange charges increased 5.5% to $2.5 million
during the three months ended March 31, 2000 from $2.4 million during the same
period in 1999. These expenses represented 10.9% of commission revenues during
the three months ended March 31, 2000 and 13.0% of commission revenues during
the same period in 1999. The decrease in these expenses as a percentage of
commission revenues was primarily due to a reduction in the cost of execution
and settlement of U.S. equity transactions, coupled with an increase in the
percentage of commissions earned on transactions executed in the Hong Kong
market, which cost less to execute and settle than comparable trades in other
Asian markets.


                                       11
<PAGE>

Employee compensation increased 19.6% to $6.8 million for the three months ended
March 31, 2000 from $5.7 million during the same period in 1999. This resulted
primarily from an increase in discretionary and performance-based bonus
compensation expense for the three months ended March 31, 2000.

All other expenses increased 8.2% to $3.0 million for the first quarter ended
March 31, 2000 from $2.7 million in the first quarter 1999. This increase
resulted from an increase in interest expense related to the clearing and
settlement brokerage transactions and marketing expenses, offset by the absence
of expenses related to Y2K incurred during the same period in 1999.

Net investment income and other for the three months ended March 31, 2000
decreased 19.2% to $0.6 million, as compared to $0.7 million during the same
period in 1999. This decrease resulted from realized and unrealized losses
incurred on the Company's investments in the diversified portfolio of preferred
stock and U.S. treasury futures and options, offset by gains on other
investments during the three months ended March 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2000, the Company had cash, U.S. Government obligations, net
accounts receivable and other net investments of $51.3 million. All receivables
from correspondent brokers and dealers are fully collectible, and no provision
for uncollectibles is 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 from time to time considers various
strategies to enhance stockholder value, including strategic alliances,
investments and joint ventures; purchase, sale or merger transactions with other
companies; and other similar transactions, which could potentially have an
impact on liquidity and capital resources.

The Company maintains overseas overdraft facilities, which bear a variable rate
of interest based upon prevailing market rates in the United Kingdom, Europe and
Hong Kong and are used to facilitate the settlement of daily trading activities.
The total amount outstanding under these facilities was $814,678 and $20,553 as
of March 31, 2000 and December 31, 1999, respectively.

During the three months ended March 31, 2000, the Company reduced its investment
in the diversified portfolio of preferred stocks and U.S. Treasury futures to
hedge the preferred stock positions by $2.3 million to $1.9 million. The $2.3
million was invested in U.S. Treasury securities and money market funds. The
Company liquidated the remaining balance of this investment during April 2000.

On May 10, 2000, the Company committed to make a $7.5 million strategic
investment in InstiPro Group, Inc., the parent company of InstiPro, Inc., a new
business-to-business (B2B) on-line brokerage firm. The investment consists of
convertible notes and a warrant. The Company made an initial investment of $5
million on May 10, 2000 and has committed to invest another $2.5 million over
the next year upon InstiPro's achievement of certain goals. Once the Company
completes the investment, it will own notes convertible into approximately 35%
of the outstanding stock of InstiPro Group, Inc. and a warrant to purchase an
additional 10%.

The Company also has entered into consulting and licensing agreements with
InstiPro to provide the Company with InstiPro's technology and expertise in
providing active, on-line trading capabilities and other investment tools to
hedge funds and other institutional investors.

                                       12
<PAGE>

InstiPro expects to offer its partners, including Internet sites and financial
service organizations, a turnkey online brokerage service with no start-up costs
that will enable them to deliver investment services to their retail customers
directly from their websites under a co-branded name.

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 and 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 and related
derivatives as a result of fluctuations in interest rates, foreign exchange
rates and equity prices. Market risk is inherent in investments that contain
derivative and non-derivative financial instruments. 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
Japanese Yen, U.K. Pounds Sterling and Hong Kong Dollars. 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 market, are a result of trading errors that occur in the ordinary
course of business. These positions are normally closed out during the next day
of trading.

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, 1999.
Significant changes which have occurred since December 31, 1999 are as follows:

During the three months ended March 31, 2000, the Company reduced its investment
in the diversified portfolio of preferred stocks and U.S. Treasury futures to
hedge the preferred stock positions by $2.3 million to $1.9 million. The $2.3
million was invested in U.S. Treasury securities and money market funds and is
subject to interest rate risk. This investment portfolio, which is subject to
interest rate risk, incurred investment losses of $0.2 million, offset by
dividends and interest of $0.1 million, during the three months ended March 31,
2000. The Company liquidated the remaining balance in this investment during
April 2000.


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                           PART II - OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS

         27.1 Financial Data Schedule

(B)      REPORTS ON FORM 8-K

         The Registrant did not file any reports on Form 8-K during the quarter
         ended March 31, 2000.


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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:  May 12, 2000                      By:/s/ Fredric P. Sapirstein
                                            ----------------------------------
                                                Fredric P. Sapirstein,
                                                Chairman and
                                                Chief Executive Officer



Date:  May 12, 2000                      By:/s/ Alan B. Herzog
                                            ---------------------------------
                                                Alan B. Herzog,
                                                Chief Operating Officer and
                                                Chief Financial Officer



                                       15
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                                  EXHIBIT INDEX


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

27.1                      Financial Data Schedule


                                       16