Exhibit 99.1


Risk Factors that Could Affect Our Business

In the course of conducting our business  operations, we could be exposed to a
variety of risks that are inherent to the financial services  business.  A
summary of some of the significant risks that could affect our financial
condition and results of operations is included below. Some of these risks are
managed in accordance with established risk management  policies and procedures,
most of which are described in the Risk Management section of the Management's
Discussion and Analysis.


Market Risk
-----------
Our  business  may be  adversely  impacted by global  market and  economic
conditions  that may cause fluctuations in interest rates,  exchange rates,
equity and commodity  prices and credit spreads.  We are exposed to potential
changes in the value of financial  instruments  caused by  fluctuations  in
interest rates,  exchange  rates,  equity  and  commodity  prices,  credit
spreads,   and/or  other  risks.  These fluctuations may result from changes in
economic conditions,  monetary and fiscal policies,  the liquidity of global
markets,  availability and cost of capital,  international and regional
political events,  acts of war or terrorism and investor  sentiment.  We have a
large and increasing amount of proprietary trading and  investment  positions,
which  include  proprietary  trading  positions  in fixed  income,  currency,
commodities and equity securities,  as well as in real estate,  private equity
and other  investments.  We may incur losses as a result of increased market
volatility,  as these  fluctuations may adversely impact the valuation of our
trading and investment positions.  Conversely,  a decline in volatility may
adversely affect the  results in our  trading  business,  which  depend on
market  volatility  to create  client and proprietary trading opportunities.


Credit Risk
-----------
Our  business  may be  adversely  impacted by an increase in our credit
exposure  related to trading, lending, and other business activities. We are
exposed to the potential  for  credit-related  losses that can occur as a result
of an  individual, counterparty  or issuer  being  unable or unwilling  to honor
its  contractual  obligations.  These credit exposures  exist  within  lending
relationships,  commitments,  letters of credit,  derivatives,  foreign exchange
and other transactions.  These exposures may arise, for example,  from a decline
in the financial condition  of a  counterparty,  from  entering  into  swap  or
other  derivative  contracts  under  which counterparties  have  obligations  to
make  payments to us, from a decrease in the value of  securities of third
parties that we hold as  collateral,  or from  extending  credit to clients
through loans or other arrangements.  As our credit  exposure  increases,  it
could have an adverse  effect on our  business  and profitability if material
unexpected credit losses occur.

Liquidity Risk
--------------
Our  business and  financial  condition  may be adversely  impacted by an
inability to borrow funds or sell assets to meet maturing obligations. We are
exposed to liquidity risk,  which is the potential  inability to repay
short-term  borrowings with new  borrowings or assets that can be quickly
converted  into cash while meeting  other  obligations  and continuing to
operate as a going concern.  Our liquidity may be impaired due to circumstances
that we may be unable to control,  such as general  market  disruptions  or an
operational  problem  that affects our trading  clients  or  ourselves.  Our
ability  to sell  assets  may  also be  impaired  if  other  market participants
are seeking to sell similar  assets at the same time.  Our inability to borrow
funds or sell assets to meet maturing  obligations,  a negative  change in our
credit ratings that would have an adverse effect on our ability to borrow funds,
or regulatory  capital  restrictions  imposed on the free flows of funds
between  us and  our  subsidiaries  may  have a  negative  effect  on our
business  and  financial condition.


Operational Risk
----------------
We may incur  losses due to the failure of people,  internal  processes  and
systems or from  external events.  Our business may be  adversely  impacted by
operational  failures or from  unfavorable  external events.  We are exposed to
the risk of loss resulting from the failure of people,  internal  processes and
systems  or from  external  events.  Such  operational  risks may  include,
exposure  to theft and fraud, improper business practices,  client suitability
and servicing risks,  product complexity and pricing risk or from improper
recording,  evaluating or accounting for  transactions.  We could suffer
financial loss, disruption of our business,  liability to clients,  regulatory
intervention or  reputational  damage from such events, which would affect our
business and financial condition.


Litigation Risk
---------------
Legal  proceedings  could adversely  affect our operating  results for a
particular  period and impact our credit ratings.  We have been named as a
defendant in various legal actions,  including  arbitrations, class actions,
and other  litigation  arising in connection  with our activities as a global
diversified financial  services  institution.  Some of the legal  actions
against us include  claims for  substantial compensatory  and/or punitive
damages or claims for indeterminate  amounts of damages.  In some cases, the
issuers who would  otherwise be the primary  defendants  are bankrupt or
otherwise in financial  distress. Given  the  number  of these  matters,  some
are  likely  to  result  in  adverse  judgments,  penalties, injunctions,
fines,  or other  relief.  We are also  involved in  investigations  and/or
proceedings  by governmental and self-regulatory agencies. We may explore
potential  settlements before a case is taken through trial because of
uncertainty,  risks, and costs  inherent in the  litigation  process.  In
accordance  with  Statement of Financial  Accounting Standards  ("SFAS") No. 5,
Accounting for  Contingencies,  we will accrue a liability when it is probable
that a  liability  has been  incurred  and the  amount of the loss can be
reasonably  estimated.  In many lawsuits  and  arbitrations,  including  almost
all of the  class  action  lawsuits  disclosed  in "Other Information
(Unaudited)  - Legal  Proceedings",  it is not possible to determine  whether a
liability has been incurred or to estimate the ultimate or minimum amount of
that  liability  until the case is close to resolution,  in which case no
accrual is made until  that  time.  In view of the  inherent  difficulty  of
predicting  the outcome of such matters,  particularly  in cases in which
claimants  seek  substantial or indeterminate  damages,  we cannot predict what
the eventual loss or range of loss related to such matters will be.  Potential
losses may be  material  to our  operating  results or cash flows for any
particular period and may impact our credit ratings.


Regulatory and Legislative Risks
--------------------------------
Many  of our  businesses  are highly  regulated and could be impacted,  and in
some instances adversely impacted, by regulatory and legislative  initiatives
around the world.  Our business may be affected by various U.S. and non-U.S.
legislative  bodies and  regulatory and exchange  authorities,  such as federal
and state  securities and bank  regulators  including the SEC, the FSA, the
Federal Deposit Insurance  Corporation,  the Office of Thrift Supervision
("OTS"),  and the Utah Department  of  Finance  Institutions,  and
self-regulatory  organizations  including  The New York Stock Exchange,  Inc.
("NYSE"),  the National  Association of Securities Dealers,  Inc. ("NASD"),
the Commodity Futures  Trading  Commission  ("CFTC")  and  industry
participants  that  continue to review and, in many cases,  adopt changes to
their  established  rules and policies.  Such changes have occurred in areas
such as corporate  governance,  anti-money  laundering,  privacy,  research
analyst  conflicts of interest and qualifications,  practices  related  to the
issuance  of  securities,  mutual  fund  trading,  disclosure practices and
auditor independence.



Competitive Environment
-----------------------
Competitive  pressures in the  financial  services  industry  could  adversely
affect our business and results of  operations.  We compete  globally for
clients on the basis of price,  the range of products that we offer,  the
quality  of our  services,  our  financial  resources,  and  product  and
service innovation.  The financial  services industry  continues to be affected
by an intensifying  competitive environment,  as demonstrated by the
introduction of new technology  platforms,  consolidation  through mergers,
increased  competition from new and established industry participants and
diminishing margins in many mature products and services. We compete with U.S.
and non-U.S.  commercial banks and other  broker-dealers  in brokerage,
underwriting,  trading,  financing and advisory  businesses.  For example,  the
financial  services  industry in general,  including  us, has experienced
intense price competition in brokerage,  as the ability to execute trades
electronically,through the internet and through other alternative  trading
systems has pressured  trading  commissions and spreads.  Many of our non-U.S.
competitors may have competitive  advantages in their home markets.
In addition,  our business is substantially  dependent on our continuing ability
to compete effectively to attract and retain  qualified  employees,  including
successful FAs,  investment  bankers,  trading professionals and other
revenue-producing or support personnel.

For further information on Risks refer to Note 6 to the Consolidated Financial
Statements.