##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

|           |                                                                                         
|---------- | ----------------------------------------------------------------------------------------
|(Mark One)
|           |                                                                                         
|[X]        | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
|           |                                                                                         
|           | For the quarterly period ended March 31, 2002                                           
|           |                                                                                         
|           | OR                                                                                      
|           |                                                                                         
|[  ]       | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|           |                                                                                         
|           | For the transition period from _______________ to _______________                       
|           |                                                                                         
|           | Commission File Number 0-16240                                                          

JB Oxford Holdings, Inc.

---

(Exact name of registrant as specified in its charter)


|                                                                                                   |  |                                                
|-------------------------------------------------------------------------------------------------- |  | -----------------------------------------------
|UTAH
(State of incorporation or organization)                                                      |  | 95-4099866
(I.R.S. Employer
Identification No.)
|                                                                                                   |  |                                                
|9665 Wilshire Blvd., Suite 300; Beverly Hills, California
(Address of principal executive offices) |  | 90212
(Zip Code)                               
|                                                                                                   |  |                                                
|Registrants telephone number, including area code                                                 |  | (310) 777-8888                                 

Indicate by check mark whether the Registrant: (l) has filed all reports required to be
filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during the preceding 12
months; and (2) has been subject to such filing requirements for the past 90 days. Yes [X]
No [  ]

Indicate the number of shares outstanding of each of the issuers classes of common stock,
as of the latest practicable date. As of May 9, 2002, the Registrant had the following
number of shares of common stock, $0.01 par value per share, outstanding: 14,141,525.





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TABLE OF CONTENTS



|                               |                                                                                               |                                                |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | Consolidated Statements of Financial Condition
|                               |                                                                                               | Consolidated Statements Of Operations         
|                               |                                                                                               | Consolidated Statements Of Cash Flows         
|                               |                                                                                               | Notes To Consolidated Financial Statements    
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|PART II  OTHER INFORMATION   
|                               | Item 1. Legal Proceedings                                                                    
|                               | Item 2. Changes in Securities and Use of Proceeds                                            
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     



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##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements

JB Oxford Holdings, Inc. and Subsidiaries
Consolidated Statements of Financial Condition

|        |                                                                                                                                                           |  |                |             |                   |  |   |             | 
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | ----------------- |  | - | ----------- | 
|        |                                                                                                                                                           |  | March 31, 2002 |             |                  
|        |                                                                                                                                                           |  | (Unaudited)    |             | December 31, 2001
|        |                                                                                                                                                           |  |                |             |                  
|Assets: |                                                                                                                                                           |  |                |             |                   |  |   |            
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Cash and cash equivalents (including securities
purchased under agreements to resell of $0 and $6,034,839)                                                |  | $              | 4,185,529   |                   |  | $ | 6,694,332   | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Cash and cash equivalents segregated under federal and
other regulations (including securities purchased under
agreements to resell of $0 and $1,695,974) |  |                | 187,971,926 |                   |  |   | 79,399,917  | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Receivable from broker-dealers and clearing organizations                                                                                                 |  |                | 24,094,514  |                   |  |   | 52,368,663  | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Receivable from customers (net of allowance for doubtful
accounts of $2,675,884 and $2,625,178)                                                           |  |                | 145,713,088 |                   |  |   | 101,641,363 | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Other receivables                                                                                                                                         |  |                | 504,781     |                   |  |   | 1,348,285   | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Marketable securities owned  at market value                                                                                                             |  |                | 1,307,858   |                   |  |   | 1,352,840   | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Notes receivable                                                                                                                                          |  |                | 2,500,000   |                   |  |   | 2,500,000   | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Furniture, equipment, and leasehold improvements (at
cost  net of accumulated depreciation and amortization
of $4,248,408 and $3,523,365)                |  |                | 2,966,648   |                   |  |   | 3,310,758   | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Income taxes receivable                                                                                                                                   |  |                | 3,962,160   |                   |  |   | 3,751,429   | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Deferred income taxes                                                                                                                                     |  |                | 1,470,058   |                   |  |   | 1,470,058   | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Clearing deposits                                                                                                                                         |  |                | 4,773,352   |                   |  |   | 5,199,277   | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Other assets                                                                                                                                              |  |                | 5,341,716   |                   |  |   | 3,402,495   | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |             | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            
|        | Total assets                                                                                                                                              |  | $              | 384,791,630 |                   |  | $ | 262,439,417 | 
|        |                                                                                                                                                           |  |                |             |                   |  |   |            

See accompanying notes to Consolidated Financial Statements.

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JB Oxford Holdings, Inc. and Subsidiaries
Consolidated Statements of Financial Condition

|                                      |                                            |                                                                                                       |   |                |             |                   |   |             |             |  
|------------------------------------- | ------------------------------------------ | ----------------------------------------------------------------------------------------------------- | - | -------------- | ----------- | ----------------- | - | ----------- | ----------- | -
|                                      |                                            |                                                                                                       |   | March 31, 2002 |             |                  
|                                      |                                            |                                                                                                       |   | (Unaudited)    |             | December 31, 2001
|                                      |                                            |                                                                                                       |   |                |             |                  
|Liabilities and shareholders equity: |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      | Liabilities:                               |                                                                                                       |   |                |             |                   |   |             |            
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Payable to broker-dealers and clearing organizations                                                  |   | $              | 145,540,071 |                   |   | $           | 51,334,581  |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Payable to customers                                                                                  |   |                | 201,023,891 |                   |   |             | 169,935,902 |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Securities sold, not yet purchased  at market value                                                  |   |                | 72,501      |                   |   |             | 846,585     |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Accounts payable and accrued liabilities                                                              |   |                | 4,514,165   |                   |   |             | 6,491,471   |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Loans from shareholders                                                                               |   |                | 5,418,696   |                   |   |             | 5,418,696   |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Notes payable                                                                                         |   |                | 5,461,375   |                   |   |             | 5,629,375   |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |             |             |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      | Total liabilities                          |                                                                                                       |   | 362,030,699    |             |                   |   | 239,656,610 |            
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      | Commitments and contingencies              |                                                                                                       |   |                |             |                   |   |             |            
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      | Shareholders equity:                      |                                                                                                       |   |                |             |                   |   |             |            
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Common stock ($.01 par value, 100,000,000 shares
authorized; 15,446,465 and 15,193,226 shares
issued) |   |                | 154,465     |                   |   |             | 151,932     |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Additional paid-in capital                                                                            |   |                | 16,829,848  |                   |   |             | 16,446,381  |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Retained earnings                                                                                     |   |                | 8,395,846   |                   |   |             | 8,803,722   |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            | Treasury stock at cost, 1,304,940 shares                                                              |   |                | (2,619,228  | )                 |   |             | (2,619,228  | )
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      | Total shareholders equity                 |                                                                                                       |   | 22,760,931     |             |                   |   | 22,782,807  |            
|                                      |                                            |                                                                                                       |   |                |             |                   |   |             |             |  
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            
|                                      | Total liabilities and shareholders equity |                                                                                                       | $ | 384,791,630    |             |                   | $ | 262,439,417 |            
|                                      |                                            |                                                                                                       |   |                |             |                   |   |            

See accompanying notes to Consolidated Financial Statements.

3



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JB Oxford Holdings, Inc. and Subsidiaries
Consolidated Statements Of Operations
(Unaudited)

|          |                                   |                |                    |           |           |                            |            |            |            |          |            | 
|--------- | --------------------------------- | -------------- | ------------------ | --------- | --------- | -------------------------- | ---------- | ---------- | ---------- | -------- | ---------- | 
|          |                                   |                |                    |           |           | For The Three Months Ended
|          |                                   |                |                    |           |           | March 31,                 
|          |                                   |                |                    |           |           |                           
|          |                                   |                |                    |           |           | 2002                       |            | 2001      
|          |                                   |                |                    |           |           |                            |            |           
|Revenues: |                                   |                |                    |           |           |                            |            |           
|          | Clearing and execution            |                | $                  | 818,643   |           |                            | $          | 1,325,178  |           
|          | Trading profits                   |                |                    | 352,699   |           |                            |            | 1,367,781  |           
|          | Commissions                       |                |                    | 2,025,942 |           |                            |            | 4,688,371  |           
|          | Interest                          |                |                    | 1,902,573 |           |                            |            | 5,591,836  |           
|          | Other                             |                |                    | 176,264   |           |                            |            | 293,487    |           
|          |                                   |                |                    |           |           |                            |            |            |           
|          |                                   | Total Revenues |                    |           | 5,276,121 |                            |            |            | 13,266,653 |         
|          |                                   |                |                    |           |           |                            |            |           
|Expenses: |                                   |                |                    |           |           |                            |            |           
|          | Employee compensation             |                |                    | 2,175,305 |           |                            |            | 4,178,124  |           
|          | Clearing and floor brokerage      |                |                    | 185,627   |           |                            |            | 635,640    |           
|          | Communications                    |                |                    | 782,124   |           |                            |            | 1,318,649  |           
|          | Occupancy and equipment           |                |                    | 1,157,468 |           |                            |            | 1,317,012  |           
|          | Interest                          |                |                    | 536,518   |           |                            |            | 3,165,495  |           
|          | Data processing charges           |                |                    | 469,145   |           |                            |            | 1,409,559  |           
|          | Professional services             |                |                    | 722,731   |           |                            |            | 1,229,804  |           
|          | Promotional                       |                |                    | 413,614   |           |                            |            | 600,235    |           
|          | Bad debts                         |                |                    | 64,332    |           |                            |            | 237,771    |           
|          | Other operating expenses          |                |                    | (612,867  | )         |                            |            | 587,488    |           
|          |                                   |                |                    |           |           |                            |            |            |           
|          |                                   | Total Expenses |                    |           | 5,893,997 |                            |            |            | 14,679,777 |         
|          |                                   |                |                    |           |           |                            |            |           
|          | Loss before income taxes          |                |                    | (617,876  | )         |                            |            | (1,413,124 | )         
|          |                                   |                | Income tax benefit |           |           | (210,000                   | )          |            |            | (610,000 | )         
|          |                                   |                |                    |           |           |                            |            |           
|          | Net Loss                          |                | $                  | (407,876  | )         |                            | $          | (803,124   | )         
|          |                                   |                |                    |           |           |                            |            |           
|          | Basic Net Loss Per Share          |                | $                  | (0.03     | )         |                            | $          | (0.06      | )         
|          |                                   |                |                    |           |           |                            |            |           
|          | Diluted Net Loss Per Share        |                | $                  | (0.03     | )         |                            | $          | (0.06      | )         
|          |                                   |                |                    |           |           |                            |            |           
|          | Weighted average number of shares |                |                    |           |           |                            |            |            |           
|          |                                   |                |                    | Basic     |           |                            | 13,961,444 |            |            |          | 14,055,086 | 
|          |                                   |                |                    | Diluted   |           |                            | 13,961,444 |            |            |          | 14,055,086 | 

See accompanying notes to Consolidated Financial Statements.

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JB Oxford Holdings, Inc. and Subsidiaries
Consolidated Statements Of Cash Flows
(Unaudited)

|                                                      |                                                                                           |                                    |                                                           |            |                            |              |            |            |         |             |  
|----------------------------------------------------- | ----------------------------------------------------------------------------------------- | ---------------------------------- | --------------------------------------------------------- | ---------- | -------------------------- | ------------ | ---------- | ---------- | ------- | ----------- | -
|                                                      |                                                                                           |                                    |                                                           |            | For The Three Months Ended
|                                                      |                                                                                           |                                    |                                                           |            | March 31,                 
|                                                      |                                                                                           |                                    |                                                           |            |                           
|                                                      |                                                                                           |                                    |                                                           |            | 2002                       |              | 2001      
|                                                      |                                                                                           |                                    |                                                           |            |                            |              |           
|Increase (decrease) in cash and cash equivalents:     |                                                                                           |                                    |                                                           |            |                            |              |            |           
|Cash flows provided by operating activities:          |                                                                                           |                                    |                                                           |            |                            |              |            |           
|                                                      | Net loss                                                                                  |                                    | $                                                         | (407,876   | )                          |              | $          | (803,124   | )      
|                                                      | Adjustments to reconcile net loss to net cash provided by
(used in) operating activities: |                                    |                                                           |            |                            |              |            |            |        
|                                                      |                                                                                           | Depreciation and amortization      |                                                           |            | 377,606                    |              |            |            | 426,140 |            
|                                                      |                                                                                           | Deferred rent                      |                                                           |            | (40,003                    | )            |            |            | (48,089 | )          
|                                                      |                                                                                           | Provision for bad debts            |                                                           |            | 64,332                     |              |            |            | 237,771 |            
|                                                      |                                                                                           | Benefit for deferred taxes         |                                                           |            |                           |              |            |            | 74,999  |            
|                                                      |                                                                                           | Changes in assets and liabilities: |                                                           |            |                            |              |            |            |         |            
|                                                      |                                                                                           |                                    | Cash segregated under federal and other regulations       |            |                            | (108,572,009 | )          |            |         | (28,476,602 | )
|                                                      |                                                                                           |                                    | Receivable from broker-dealers and clearing
organizations |            |                            | 28,274,149   |            |            |         | (41,702,874 | )
|                                                      |                                                                                           |                                    | Receivable from customers                                 |            |                            | (44,136,057  | )          |            |         | 99,065,266  |  
|                                                      |                                                                                           |                                    | Other receivables                                         |            |                            | 843,504      |            |            |         | 30,706      |  
|                                                      |                                                                                           |                                    | Securities owned                                          |            |                            | 44,982       |            |            |         | (226,675    | )
|                                                      |                                                                                           |                                    | Clearing deposits                                         |            |                            | 425,925      |            |            |         | 1,312,090   |  
|                                                      |                                                                                           |                                    | Other assets                                              |            |                            | 21,779       |            |            |         | (238,251    | )
|                                                      |                                                                                           |                                    | Payable to broker-dealers and clearing organizations      |            |                            | 94,205,490   |            |            |         | (9,132,199  | )
|                                                      |                                                                                           |                                    | Payable to customers                                      |            |                            | 31,087,989   |            |            |         | (12,496,281 | )
|                                                      |                                                                                           |                                    | Securities sold not yet purchased                         |            |                            | (774,084     | )          |            |         | (56,463     | )
|                                                      |                                                                                           |                                    | Accounts payable and accrued liabilities                  |            |                            | (2,462,303   | )          |            |         | (2,362,895  | )
|                                                      |                                                                                           |                                    | Income taxes payable/receivable                           |            |                            | (210,731     | )          |            |         | (755,303    | )
|                                                      |                                                                                           |                                    |                                                           |            |                            |              |            |            |        
|Net cash provided by (used in) operating activities   |                                                                                           |                                    | (1,257,307                                                | )          |                            |              | 4,848,186  |           
|                                                      |                                                                                           |                                    |                                                           |            |                            |              |            |           
|Cash flows from investing activities:                 |                                                                                           |                                    |                                                           |            |                            |              |            |           
|                                                      | Acquisitions of customer accounts                                                         |                                    |                                                           | (1,050,000 | )                          |              |            | (2,400,000 | )      
|                                                      | Capital expenditures                                                                      |                                    |                                                           | (33,496    | )                          |              |            | (138,757   | )      
|                                                      |                                                                                           |                                    |                                                           |            |                            |              |            |            |        
|Net cash used in investing activities                 |                                                                                           |                                    | (1,083,496                                                | )          |                            |              | (2,538,757 | )         
|                                                      |                                                                                           |                                    |                                                           |            |                            |              |            |           
|Cash flows from financing activities:                 |                                                                                           |                                    |                                                           |            |                            |              |            |           
|                                                      | Repayments of notes payable                                                               |                                    |                                                           | (168,000   | )                          |              |            | (252,000   | )      
|                                                      |                                                                                           |                                    |                                                           |            |                            |              |            |            |        
|Net cash used in financing activities                 |                                                                                           |                                    | (168,000                                                  | )          |                            |              | (252,000   | )         
|                                                      |                                                                                           |                                    |                                                           |            |                            |              |            |           
|Net increase (decrease) in cash and cash equivalents  |                                                                                           |                                    | (2,508,803                                                | )          |                            |              | 2,057,459  |           
|Cash and cash equivalents at beginning of the quarter |                                                                                           |                                    | 6,694,332                                                 |            |                            |              | 8,004,000  |           
|                                                      |                                                                                           |                                    |                                                           |            |                            |              |            |           
|Cash and cash equivalents at end of the quarter       |                                                                                           | $                                  | 4,185,529                                                 |            |                            | $            | 10,061,459 |           
|                                                      |                                                                                           |                                    |                                                           |            |                            |              |            |           

See accompanying notes to Consolidated Financial Statements.

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JB Oxford Holdings, Inc. and Subsidiaries
Notes To Consolidated Financial Statements
(Unaudited)

Note 1. Companys Quarterly Report Under Form 10-Q

In the opinion of Management, the accompanying unaudited financial
statements contain all adjustments (all of which are normal and recurring in
nature) necessary to present fairly the financial statements of JB Oxford
Holdings, Inc. and subsidiaries (the Company) for the periods presented. The
accompanying financial information should be read in conjunction with the
Companys 2001 Annual Report on Securities and Exchange Commission (SEC) Form
10-K. Footnote disclosures that substantially duplicate those in the Companys
Annual Report on Form 10-K, including significant accounting policies, have
been omitted.

Note 2. Earnings Per Share

The following table reconciles the numerators and denominators of the
basic and diluted earnings per share computation:

|                           |                            |                                                                                  |   |                            |            |      |   |       |            |  
|-------------------------- | -------------------------- | -------------------------------------------------------------------------------- | - | -------------------------- | ---------- | ---- | - | ----- | ---------- | -
|                           |                            |                                                                                  |   | For The Three Months Ended
|                           |                            |                                                                                  |   | March 31,                 
|                           |                            |                                                                                  |   |                           
|                           |                            |                                                                                  |   | 2002                       |            | 2001
|                           |                            |                                                                                  |   |                            |            |     
|Basic Earnings Per Share   |                            |                                                                                  |   |                            |            |      |   |      
|                           |                            | Net loss                                                                         |   | $                          | (407,876   | )    |   | $     | (803,124   | )
|                           |                            |                                                                                  |   |                            |            |      |   |       |            |  
|                           |                            | Income available to common stockholders (numerator)                              |   | $                          | (407,876   | )    |   | $     | (803,124   | )
|                           |                            |                                                                                  |   |                            |            |      |   |      
|                           |                            | Weighted average common shares outstanding (denominator)                         |   |                            | 13,961,444 |      |   |       | 14,055,086 |  
|                           |                            |                                                                                  |   |                            |            |      |   |       |            |  
|                           |                            | Basic Earnings Per Share                                                         |   | $                          | (0.03      | )    |   | $     | (0.06      | )
|                           |                            |                                                                                  |   |                            |            |      |   |      
|Diluted Earnings Per Share |                            |                                                                                  |   |                            |            |      |   |      
|                           |                            | Net loss                                                                         |   | $                          | (407,876   | )    |   | $     | (803,124   | )
|                           |                            | Interest on convertible debentures, net of income tax                            |   |                            |           |      |   |       |           |  
|                           |                            |                                                                                  |   |                            |            |      |   |       |            |  
|                           |                            | Income available to common stockholders plus assumed
conversions (numerator)     |   | $                          | (407,876   | )    |   | $     | (803,124   | )
|                           |                            |                                                                                  |   |                            |            |      |   |      
|                           |                            | Weighted average common shares outstanding                                       |   |                            | 13,961,444 |      |   |       | 14,055,086 |  
|                           |                            | Weighted average options outstanding                                             |   |                            |           |      |   |       |           |  
|                           |                            | Weighted average convertible debentures                                          |   |                            |           |      |   |       |           |  
|                           |                            | Stock acquired with option proceeds                                              |   |                            |           |      |   |       |           |  
|                           |                            |                                                                                  |   |                            |            |      |   |      
|                           |                            | Weighted average common shares and assumed conversions
outstanding (denominator) |   |                            | 13,961,444 |      |   |       | 14,055,086 |  
|                           |                            |                                                                                  |   |                            |            |      |   |       |            |  
|                           | Diluted Earnings Per Share |                                                                                  | $ | (0.03                      | )          |      | $ | (0.06 | )         
|                           |                            |                                                                                  |   |                            |            |      |   |      

The assumed conversions have been excluded in computing the diluted
earnings per share when there is a net loss for the period. They have been
excluded because their inclusion would reduce the loss per share or be
anti-dilutive. If the assumed conversions would have been used, the fully
diluted shares outstanding for the quarters ended March 31, 2002 and 2001 would
be 22,039,928 and 22,372,048, respectively.

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The options carry exercise prices ranging from $0.63 to $9.00 at March 31,
2002 and 2001. Options to purchase 2,676,950 shares of common stock at March
31, 2002 expire at various dates through December 5, 2011.

Note 3. Regulatory Requirements

JBOC is subject to Rule 15c3-1 of the Securities Exchange Act of 1934, as
amended, which requires the maintenance of minimum net capital. JBOC has
elected to use the alternative method permitted by the rule, which requires it
to maintain minimum net capital, as defined, equal to the greater of $250,000
or two percent of aggregate debit balances arising from customer transactions,
as defined. The rule also provides, among other things, for a restriction on
the payment of cash dividends, payments on subordinated borrowings or the
repurchase of capital stock if the resulting excess net capital would fall
below five percent of aggregate debits.

At March 31, 2002, JBOC had net capital of $17,123,672, which was 11.4% of
aggregate debit items and $14,120,481 in excess of the minimum amount required.
At December 31, 2001, JBOC had net capital of $18,975,361, which was 18.2% of
aggregate debit items and $16,891,455 in excess of the minimum amount required.

Note 4. Contingent Liabilities

The Company and/or its subsidiaries are defendants in several lawsuits and
arbitrations the most significant of which follows:

In May 2002, the staff of the Pacific Regional Office of the Securities
and Exchange Commission informed JB Oxford Holdings and JB Oxford & Company
(collectively, JB Oxford) that the staff does not intend to recommend any
enforcement action against JB Oxford arising out of the SEC investigation. JB
Oxford had previously disclosed that it had entered into a tentative settlement
of the SEC investigation with the SEC staff. Because the SEC staff has decided
not to recommend any action against JB Oxford, the terms and conditions that
had been a part of the proposed settlement will not be imposed. The staffs
decision effectively closes the SECs investigation into JB Oxford.

Also in May 2002, the Company amended its agreement with the Los Angeles
office of the United States Attorneys Office (the USAO) extending the
payment schedule for the balance owing under the settlement agreement. No
payment will be made in fiscal year 2002, and the balance will be paid in equal
annual installments of $500,000 in February 2003 and February 2004.

The Company originally accrued payments to the USAO and SEC totaling
approximately $3.0 million. Because the SEC investigation closed without action
or monetary assessment, the amount accrued has been reduced by approximately $1
million.

In August 2000, the assignee and holder of two of the demand notes payable
by the Company to Oeri Finance Inc., in the principal face amount of
$1,939,375, filed to collect the amounts due under the notes as well as seek
return of certain securities seized by the government. The Company filed an
answer and asserted defenses to payment including, among other defenses, a
right of set-off for certain expenses incurred by the Company in connection
with the governmental investigation described above and related matters. In
February 2002, the US District Court, Central District of California, issued an
Order granting the assignees application for writ of pre-judgment attachment
against the assets of JB Oxford Holdings, Inc. A final determination of these
issues on the merits has yet to be made. The notes and underlying obligations
have previously been disclosed by the Company in its Annual Reports on Form
10-K and Quarterly Reports on Form 10-Q since the issuance of the notes in July
1997. The Company believes that it has valid defenses and set-offs to the
claims and intends to vigorously defend itself, although no assurance can be
given as to the outcome of this matter.

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Note 5. Supplemental Disclosures of Cash Flow Information

|                                                                                    |              |  |                                      |         |      |  |   |           | 
|----------------------------------------------------------------------------------- | ------------ |  | ------------------------------------ | ------- | ---- |  | - | --------- | 
|                                                                                    |              |  | For The Three Months Ended March 31,
|                                                                                    |              |  |                                     
|                                                                                    |              |  | 2002                                 |         | 2001
|                                                                                    |              |  |                                      |         |     
|Supplemental Disclosures of Cash Flow Information
Cash paid during the quarter for: |              |  |                                      |         |      |  |   |          
|                                                                                    | Interest     |  | $                                    | 546,485 |      |  | $ | 3,152,252 | 
|                                                                                    | Income taxes |  |                                      |        |      |  |   | 70,000    | 

Supplemental disclosure of non-cash investing and financing activities:

Common stock issued and future payable incurred for acquisition of
customer accounts in the amount of $911,000.

Note 6. Acquisitions of Customer Accounts

During the quarter ended March 31, 2002, the Company acquired certain customer
accounts from a securities broker dealer. The cost of this acquisition has
been included in other assets as an intangible asset. The Company is
amortizing this intangible asset over four years, which is the estimated useful
life.

Note 7. Notes Payable and Committed Lines

The Company currently has outstanding a bank note payable in the amount of
$2,572,000 as of March 31, 2002. The bank note payable carries an interest
rate of prime plus 1%. Principal payments of $84,000, plus interest, are due
monthly, with a balloon payment due on September 5, 2002. For the year ended
December 31, 2001, the Company was not in compliance with the net income and
net worth covenants of its bank note payable agreement which require that the
Company earn net income of at least $5 million per year and maintain net assets
of at least $25 million. The Company reached an agreement with the bank in
December 2001 to amend the credit agreement by repaying $1 million of principal
as well as granting a first priority security interest in the Companys Federal
and State tax refunds. Based on management discussions with the bank, the
Company believes that this amendment to the credit agreement will lead to a
waiver of the debt covenants as of and for the year ended December 31, 2001,
however, the bank has not granted an official waiver. In the event that the
Company is deemed to be in default of the covenants, the interest rate on the
note will increase from Prime plus 1% to Prime plus 3%. To date, the Company
has made all of its required payments under the bank note payable.




Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

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Through our wholly-owned subsidiaries, we are engaged in the business of
providing brokerage and related financial services to retail customers and
broker-dealers nationwide. We are a fully integrated brokerage firm, providing
retail brokerage services, clearing services and market making services to our
customers. Our business is headquartered in Los Angeles and we have additional
branches in New York, Miami and Minneapolis.

Our primary subsidiary is JB Oxford & Company. JB Oxford is a registered
broker-dealer offering the following services: (i) providing discount and
electronic brokerage services to the investing public; (ii) providing clearing
and execution services to independent broker-dealers (correspondents) on a
fully-disclosed basis; and (iii) acting as a market maker in stocks traded on
NASDAQ National Market System and other national exchanges. For 2001, our
annual consolidated revenues were $35,347,821, which consisted primarily of
commission and interest income from our discount and electronic brokerage
division.

In early March, 2002 the Company acquired the right to service the customer
accounts of a Minneapolis-based broker dealer. Under the terms of the
transaction, JB Oxford acquired approximately 11,500 customer accounts located
throughout the United States. The consideration paid by JB Oxford in the
transaction is a combination of cash and stock. The Company expects to maintain
a presence in Minneapolis, MN and will continue to look for acquisitions within
the financial service industry.

Discount and Electronic Brokerage Services

JB Oxford provides a full line of brokerage services and products to customers,
including the ability to buy and sell securities, security options, mutual
funds, fixed income products, annuities and other investment securities. We
continue to upgrade and improve our brokerage technologies in order to provide
our customers with the resources necessary to conveniently and economically
execute securities transactions and access related financial information. In
addition to our trading capabilities, JB Oxfords Internet site
(www.jboxford.com) provides market quotes, charts, company research, and
customer account information, such as cash balances, portfolio balances and
similar information.

We believe that the Company can recover from the volume declines in the market
and grow our discount and electronic brokerage division throughout 2002, due in
part to our ability to provide high quality, flexible, and customer-sensitive
responses and services. We continually upgrade our computer systems and
services within each of our divisions to utilize and take advantage of the most
recent technological developments.

Clearing and Execution Services

JB Oxford is self-clearing and provides clearing and execution services to
independent broker-dealers. The clearing business offers a high return on
capital, and we believe that by careful selection and monitoring of JB Oxfords
correspondents, this business segment will remain profitable.

Market Making Activities

In order to facilitate the execution of security transactions for our own
customers and the customers of our correspondents, JB Oxford acts as a market
maker for approximately 350 public corporations

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whose stocks are traded on the NASDAQ National Market System, NYSE or other
national exchanges. The number of companies in which JB Oxford acts as a market
maker fluctuates depending upon various factors, including trading volume and
the number of employees in a trading capacity. Our market making activities
concentrate on the execution of unsolicited transactions for customers and are
required to be in compliance with the rules of the National Association of
Securities Dealers, Inc. (NASD) regarding best execution.

Results of Operations

Revenues

The Companys total revenues were $5,276,121 in the first quarter 2002, a
decrease of 60% from $13,266,653 in the first quarter of 2001. The primary
reason for the decrease was a decline in commission revenue of 57% to
$2,025,942 in the current quarter from $4,688,371 in the first quarter of 2001.
Additionally, interest revenue decreased 66% to $1,902,573 in the first
quarter of 2002 from $5,591,836 in the first quarter of 2001. Trading profits
decreased 74% to $352,699 in the first quarter of 2002 from $1,367,781 in the
first quarter of 2001.

Commission revenue decreased $2,662,429 or 57% to $2,025,942 in the first
quarter 2002 compared to $4,688,371 in the first quarter of 2001. This decline
is the direct result of the decline in trading volume, which is down 57% in the
first quarter of 2002 compared to the first quarter of 2001, as the entire
industry experiences decreased volume in the continuing downtrending market.
For 2002, the Company anticipates commission revenue will track the overall
trading volumes within the industry. The Company intends to look for
opportunities to grow its business through acquisitions of accounts from
compatible discount and on-line brokerage operations of other firms. Although
the Company has completed acquisitions in the past year, there can be no
assurance that the Company will complete any additional acquisitions, or if
completed, that it will be successful.

Interest revenues decreased $3,689,263 or 66% to $1,902,573 in the first
quarter 2002 compared to $5,591,836 in the first quarter of 2001. Net interest
income decreased 44% from $2,426,341 in the first quarter 2001 to $1,366,055 in
the first quarter 2002. The changes in interest revenues are consistent with
usual fluctuation of debit balances in brokerage margin accounts as well as
changes in broker-call rates on which the interest charged to customers is
calculated. The decline in margin balances has been the most significant
factor for the decrease.

Trading profits decreased 74% to 352,699 in the first quarter of 2002 from
$1,367,781 in the first quarter of 2001. The decrease in trading profits
resulted from a decrease in trading volume from the Companys discount and
on-line brokerage operations. Volumes in the inventory accounts have decrease
58% in the first quarter of 2002 compared to the first quarter of 2001.
Management anticipates trading profits will continue to track the volumes of
the discount and on-line brokerage operation for 2002, however, management is
also exploring new sources of order flow for the Company to utilize.

Clearing and execution revenues decreased $506,535 or 38% to $818,643 in the
first quarter 2002 compared to $1,325,178 in the first quarter of 2001. The
decrease represents the decrease in

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correspondent trades cleared by the Company and the trend tracks the overall
volume trend of the industry.

Expenses

Expenses totaled $5,893,997 for the first quarter of 2002, a decrease of 60%
from $14,679,777 in the first quarter of 2001. The decrease in expenses from
2001 is primarily a result of the decline in trading volume in the Companys
discount and on-line brokerage divisions. The decrease also reflects the impact
of cost containment measures taken by management during the past year. Many of
the Companys expenses, including clearing expense, interest expense, and data
processing charges are directly related to commission revenues, interest
revenues and trading revenues, which are all down from the first quarter of
2001. Data processing expense decreased 67% to $469,145 in the first quarter
of 2002 from $1,409,559 in the first quarter of 2001. This decrease is the
result of decline in commission and trading volumes.

Employee compensation decreased by 48% in the first quarter of 2002 to
$2,175,305 from $4,178,124 in the first quarter of 2001. Interest expense
decreased 83% to $536,518 in the first quarter of 2002 from $3,165,495 in the
first quarter of 2001. These decreases are in line with the revenue decreases
discussed above, where commission revenue decreased 57% and interest revenue
decreased 66%. The Company has eliminated its commissioned sales force in the
first quarter 2002 and now pays on a salary basis with some incentives for
performance.

Promotional expenses decreased $186,621 or 31% to $413,614 in the first quarter
of 2002 from $600,235 in the first quarter of 2001. These costs have decreased
as management has focused on more efficient means of advertising. The Company
is currently running a print campaign with an estimated annual budget of
$1,800,000. Management will continue its advertising as a means of name
branding while also looking to increase customer accounts through acquisitions.

Other expense decreased by $1,200,355 during the first quarter of 2002 compared
to the first quarter of 2001. The reason for the decrease is due to the
reversal of the amount accrued for an anticipated payment to the Securities and
Exchange Commission of $960,000.

Management continues to examine ways to contain costs and improve efficiencies.
The Company will continue to seek ways to cut costs and add revenues.

Liquidity and Capital Resources

The Company finances its growth through the use of funds generated from the
business operations of its subsidiaries, mainly JBOC. Additionally, JBOC has
established committed lines of revolving credit with other banking institutions
with an aggregate borrowing availability approximating $55,000,000 as of March
31, 2002. Further, the Company has available stock loan financing when
necessary. Amounts borrowed bear interest at a fluctuating rate based on the
broker call and prime rates. Certain of these credit facilities are subject to
financial covenants and restrictions which could limit the amount the Company
could borrow at any given time in the event of changes in financial ratios and
continuing losses.

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The Company currently has outstanding a bank note payable in the amount of
$2,572,000 as of March 31, 2001. The bank note payable carries an interest
rate of prime plus 1%. Principal payments of $84,000, plus interest, are due
monthly, with a balloon payment due on September 5, 2002. For the year ended
December 31, 2001, the Company was not in compliance with the net income and
net worth covenants of its bank note payable agreement which require that the
Company earn net income of at least $5 million per year and maintain net assets
of at least $25 million. The Company reached an agreement with the bank in
December 2001 to amend the credit agreement by repaying $1 million of principal
as well as granting a first priority security interest in the Companys Federal
and State tax refunds. Based on management discussions with the bank, the
Company believes that this amendment to the credit agreement will lead to a
waiver of the debt covenants as of and for the year ended December 31, 2001,
however, the bank has not granted an official waiver. In the event that the
Company is deemed to be in default of the covenants, the interest rate on the
note will increase from Prime plus 1% to Prime plus 3%. To date the Company
has made all of its required payments under the bank note payable.

The majority of the Companys corporate assets at March 31, 2002, were held by
its subsidiary, JBOC, and consisted of cash or assets readily convertible to
cash. The Companys statement of financial condition reflects this largely
liquid financial position. Receivables with other brokers and dealers
primarily represent current open transactions that typically settle within a
few days, or stock borrow-and-loan transactions where the contracts are
adjusted to market values daily. Additionally, JBOC is subject to the
requirements of the NASD and the SEC relating to liquidity, net capital
standards and the use of customer cash and securities. See Note 3, Regulatory
Requirements, to the financial statements for regulatory requirements of the
Company.

The Company currently anticipates that its cash resources and available credit
facilities will be sufficient to fund its expected working capital and capital
expenditure requirements at least through the end of 2002 and for the
foreseeable future. However, in order to more aggressively expand its
business, respond to competitive pressures, develop additional products and
services, or take advantage of strategic opportunities, or in the event losses
continue or future positive cash flow is not realized, the Company may need to
raise additional funds. If funds are raised through the issuance of equity
securities, or securities which are convertible into equity securities, the
Companys existing shareholders may experience additional dilution in ownership
percentages or book value. Additionally, such securities may have rights,
preferences and privileges senior to those of the holders of the Companys
common stock. If such funds are needed, there can be no assurance that
additional financing will be available or whether it will be available on terms
satisfactory to the Company.

Liquidity at March 31, 2002

The Companys cash position decreased during the first quarter of 2002 by
$2,508,803 to $4,185,529. This compares with a net increase in cash and cash
equivalents of $2,057,459 in the first quarter of 2001. The fluctuation in the
Companys cash position is impacted by the settlement cycles of the business,
which relate directly to the cash provided from or used in operations.

Cash Flows From Operating Activities

Net cash used in operating activities was $1,257,307 for the first quarter of
2002, compared to cash of $4,848,186 provided by operations during the first
quarter of 2001. The Companys net cash provided

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by or used in operating activities is impacted by changes in the
brokerage-related assets and liabilities of JBOC.

During the first quarter of 2002, the most significant source of cash was the
increase in payables to broker-dealers and clearing organizations of
$94,205,490 and was the result of increased stock loan activity. This source
of cash was used by the increase in cash segregated under federal and other
regulations which increased $108,572,009. Additional cash was provided through
an increase in payables to customers of $31,087,989, and a decrease of
$28,274,149 in receivables from broker-dealers and clearing organizations.

Cash Flows Used In Investing Activities

The net cash used in investing activities during the first quarter of 2002 was
$1,083,496 compared with $2,538,757 during the same quarter of 2001. Cash used
in the first quarter of 2002 include $1,050,000 used to acquire the right to
service certain customer accounts, $2,400,000 was used for this same purpose in
the first quarter of 2001. The remaining $33,496 of cash uses are a direct
result of capital expenditures made by the Company during the first quarter of
2002 as compared to $138,757 for the first quarter of 2001. The Company
presently has no plans to open additional offices and no significant
commitments for capital expenditures, therefore, the Companys requirement for
capital resources is not material to the business as a whole. The Company
continues to look for opportunity to grow its business through acquisition and
if acquisitions are made, the Company may expend its resources on an investment
in such an acquisition.

Cash Flows From Financing Activities

Financing activities used cash of $168,000 in the first quarter of 2002,
compared to $252,000 cash used by financing activities in the first quarter of
2001. The cash used in 2002 and 2001 was for the repayment of notes payable.

Recent Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 141, Business Combinations and SFAS
No. 142, Goodwill and Other Intangible Assets. The Company was required to
adopt SFAS No. 141 upon issuance. As such, all business combinations for which
the Company may prospectively enter must be accounted for as purchase
transactions. The Company adopted SFAS No. 142 on January 1, 2002. The
adoption of SFAS No. 142 ceases the current amortization of goodwill and will
instead be subject to at least an annual assessment for impairment by applying
a fair-value-based test. The adoption of this statement did not have a
material effect on the Companys financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets and
supercedes or amends previous pronouncements including SFAS No. 121, Accounting
Principles Board Opinion No. 30, and Accounting Research Board No. 51. The

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Company adopted this statement on January 1, 2002. The adoption of this
statement did not have a material effect on the Companys financial position or
results of operations.

Special Note Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q, particularly under
Items 2 and 3, as well as certain information provided periodically in writing
or orally by us, constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance, or achievements of the Company
to be materially different from any future results, performance, or
achievements, expressed or implied by such forward-looking statements.

You should carefully consider the risks described below and all other
information contained in this report and in our other filings with the SEC,
including but not limited to information under the heading Business Overview 
Forward Looking Statements and Risk Factors, in our Form 10-K for the year
ended December 31, 2001 before making an investment decision in the Company.
These risks include, among others, the following:



| |  | we have incurred operation losses in the past and may incur future operation losses.                                                                                                                                                                 
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | our business is adversely affected by downturns in the U.S. securities markets.                                                                                                                                                                      
| 
| |  | demand and market acceptance for our services are subject to a high level of uncertainty.                                                                                                                                                            
| 
| |  | we are exposed to certain credit risks with our customers.                                                                                                                                                                                           
| 
| |  | our clearing operations expose us to losses beyond the loss of business.                                                                                                                                                                             
| 
| |  | our success is dependent upon the development and enhancement of our services and products.                                                                                                                                                          
| 
| |  | the discount and electronic brokerage services market is highly competitive                                                                                                                                                                          
| 
| |  | the loss of significant customers could adversely affect our business.                                                                                                                                                                               
| 
| |  | our plans to expand through acquisitions of other companies may have a material adverse effect on our business.                                                                                                                                      
| 
| |  | our business is dependent on strategic relationships with online and Internet service providers and software and
information services providers.                                                                                                     
| 
| |  | our business is subject to extensive regulation under both federal and state laws.                                                                                                                                                                   
| 
| |  | our failure to maintain the net capital levels required by various regulators could adversely affect our business.                                                                                                                                   
| 
| |  | we could suffer substantial losses and be subject to customer litigation if our electronic systems which support online
trading fail or our transactions process is slow.                                                                            
| 
| |  | our business could suffer if we cannot protect the confidentiality of customer information.                                                                                                                                                          
| 
| |  | the trading price of our common stock has been and may continue to be subject to wide fluctuations.                                                                                                                                                  
| 
| |  | your interests as a stockholder may conflict with our controlling shareholders, our Chief Executive Officer and our
President.                                                                                                                       
| 
| |  | the loss of certain key executive officers could harm our business.                                                                                                                                                                                  
| 
| |  | we may be unable to maintain the listing of our common stock on the Nasdaq SmallCap market and Penny Stock rules may apply
to the sale of our common stock which, in each case, would make it more difficult for you to dispose of your common stock.
| 
| |  | our Board of Directors has the authority to issue preferred stock, which could deter takeover bids even if those bids are
in the shareholders best interests.                                                                                       

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| |  | securities litigation could adversely affect our business.                                                                                        
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | we may be unable to hire and retain skilled personnel.                                                                                            
| 
| |  | recent events related to our independent auditor, Arthur Andersen could adversely affect our ability to timely file our
required periodic reports.

These risks and uncertainties are not the only ones facing the Company and
there may be additional risks that we do not presently know of or that we
currently deem immaterial. If any of the risks actually occur, these risks
could have a materially adverse affect on our business, financial condition or
results of operations. In that case, the trading price of our stock could
decline, and you may lose all or part of your investment. We undertake no
obligation to publicly update or revise the forward-looking statements or risks
and uncertainties to reflect events or circumstances occurring after the date
of this Form 10-Q or to reflect the occurrence of unanticipated events.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk Disclosures

The following discussion about the Companys market risk disclosures involves
forward-looking statements. Actual results could differ materially from those
projected in these forward-looking statements. See Item 2 Managements
Discussion and Analysis of Financial Condition and Results of Operations -
Special Note Regarding Forward-Looking Statements above. The Company is
exposed to market risk related to changes in interest rates and equity security
price risk. The Company does not have derivative financial instruments for
speculative or trading purposes.

Retail broker-dealers with clearing operations, such as the Company, are
exposed to risks that exceed the simple risk of loss of business due to the
loss of retail customers and/or correspondents. Broker-dealers engaged in
clearing operations for other correspondent broker-dealers are exposed to
losses beyond the loss of business in the event that the correspondent fails.
These risks result where the total assets, securities held in inventory, and
cash of the failed correspondent are insufficient to cover the unpaid customer
debits, together with losses which may be generated in the correspondents
trading account. The Company has established procedures to review a
correspondents inventory and activities in an effort to prevent such losses in
the event of a correspondents failure.

Areas outside the control of the Company which affect the securities market,
such as severe downturns or declines in market activity, may cause substantial
financial exposure. This is particularly true with regard to the receivables
that are carried in customers margin accounts. A significant decline in
market value may decrease the value of securities pledged in the margin
accounts to a point that the margin loans would exceed such value. While the
Company is authorized to liquidate the securities and to utilize the
correspondents account balances to cover any shortfall, in a worst case
scenario, such collateral may not be sufficient to cover all losses.

Interest Rate Sensitivity and Financial Instruments

For its working capital and reserves that are required to be segregated under
federal or other regulations, the Company invests primarily in U.S. Treasury
securities under agreements to resell.

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These agreements have maturity dates ranging from one to seven days, and do not
present a material interest rate risk.

Equity Price Risk

JBOC acts as a market maker for approximately 350 public corporations whose
stocks are traded on the NASDAQ National Market System, NYSE or other national
exchanges. The Company selects companies in which it makes a market based on a
review of the current market activity, and also to facilitate trading activity
of its own and correspondents clients. Market making may result in a
concentration of securities which may expose the Company to additional risk;
however, the Company does not maintain a significant inventory of equity
securities.




PART II  OTHER INFORMATION




Item 1. Legal Proceedings

The Company and its subsidiaries are a party to a number of pending legal or
administrative proceedings, including suits involving various customers that
allege damages arising as a result of brokerage transactions by the Company.
All of the legal and administrative proceedings have arisen in the ordinary
conduct of its business. Those that may have a significant impact on the
Company have been reported in previous filings and the following is a
description of any material developments or changes in such legal proceedings.

In May 2002, the staff of the Pacific Regional Office of the Securities and
Exchange Commission informed JB Oxford Holdings and JB Oxford & Company
(collectively, JB Oxford) that the staff does not intend to recommend any
enforcement action against JB Oxford arising out of the SEC investigation. JB
Oxford had previously disclosed that it had entered into a tentative settlement
of the SEC investigation with the SEC staff. Because the SEC staff has decided
not to recommend any action against JB Oxford, the terms and conditions that
had been a part of the proposed settlement will not be imposed. The staffs
decision effectively closes the SECs investigation into JB Oxford.

Also in May 2002, the Company amended its agreement with the Los Angeles office
of the United States Attorneys Office (the USAO) extending the payment
schedule for the balance owing under the settlement agreement. No payment will
be made in fiscal year 2002, and the balance will be paid in equal annual
installments of $500,000 in February 2003 and February 2004.

The Company originally accrued payments to the USAO and SEC totaling
approximately $3.0 million. Because the SEC investigation closed without action
or monetary assessment, the amount accrued has been reduced by approximately $1
million.

The above legal proceedings involving the SEC and the USAO were previously
reported by us in our Annual Reports on Form 10-K and Quarterly Reports on Form
10-Q.




Item 2. Changes in Securities and Use of Proceeds

There has been no material modification of ownership rights of securities
holders. Certain subsidiary companies, as part of their normal broker-dealer
activities, have minimum capital requirements

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imposed by regulatory agencies. See Note 4, Regulatory Requirements, to the
financial statements. These requirements may restrict the payment of
dividends.




Item 6. Exhibits and Reports on Form 8-K

|    |  |                                                                         
|--- |  | ------------------------------------------------------------------------
|(b) |  | Reports on Form 8-K.                                                    
|    |  |                                                                         
|    |  | During the first quarter, the Company did not file a Report on Form 8-K.

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

JB Oxford Holdings, Inc.

/s/ Michael J. Chiodo

Michael J. Chiodo
Chief Financial Officer

May 15, 2002

18