Exhibit 99.1

CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS

STOCKWALK.COM GROUP, INC. (the Company) wishes to take advantage of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995 (the
Act) and is filing this cautionary statement in connection with such safe
harbor legislation.

The Companys Form 10-K, any Form 10-Q or Form 8-K filed by the Company or any
other written or oral statements made by or on behalf of the Company may
include forward- looking statements as defined in the Act. The words
believe, expect, anticipate, intend, estimate, forecast, project
and similar expressions identify such forward-looking statements.
Forward-looking statements reflect the Companys current views with respect to
future events and financial performance, and the Company wishes to caution
investors that any forward-looking statements made by or on behalf of the
Company are subject to uncertainties and other factors that could cause actual
results to differ materially from such statements. These uncertainties and
other factors include, but are not limited to, the factors listed below (many
of which have been discussed in the Companys prior filings with the Securities
and Exchange Commission).

Although the Company has attempted to identify important factors, the Company
wishes to caution investors that other factors might in the future prove to be
important in affecting the Companys results of operations. New factors emerge
from time to time, and it is not possible for Company management to predict all
of such factors, nor can Company management assess the impact of each such
factor on the business, or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements.

Investors are further cautioned not to place undue reliance on such
forward-looking statements because such statements reflect the Companys views
only as of the date the statement was made. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.

Company Risks

We experienced overall losses in recent operating periods, and these losses may
continue

We experienced an after-tax loss of $1.7 million for the fiscal year ended
March 31, 2000 and a $1.2 million loss after tax for the quarter ended June 30,
2000. The losses are primarily attributable to expenses incurred in
our  online trading operations. We believe our online brokerage business, particularly our
private label growth strategy, will provide a significant portion of our future
revenues. However, we cannot assure you that our growth strategy will prove to
be successful or that we will realize sufficient revenues in future operating
periods to become profitable.

Our online brokerage business is in an early stage of development and may not
become profitable

We began offering our online brokerage services to the public in September
1999 and incurred substantial losses due to start-up costs and a limited
revenue base. We expect to spend substantial amounts to ramp-up Online
Brokerage Solutions, Inc. which may not be recovered. In addition, we cannot assure
you that this division will achieve sufficient revenue to absorb all expenses
associated with a rapidly growing business or that market factors or other
factors will not cause operating losses in the future.

We expect significant fluctuations in future quarterly operating results, which may be caused by the following factors:



| |  |  |  the timing of introductions or
enhancements of online brokerage services and products by us or our
   competitors;
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| |  |  |  market acceptance of private label and online brokerage services and products;                                    
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| |  |  |  changes in trading volume in the securities markets;                                                              
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| |  |  |  trends in the securities markets;                                                                                 
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| |  |  |  changes in our pricing policies or in our competitors pricing policies;                                          
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| |  |  |  the success of and costs associated with acquisitions, joint ventures or other strategic relationships; and       

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| |  |  |  changes in the level of operating expenses to support projected growth.
| |  |  | -------------------------------------------------------------------------

Due to the factors listed above, quarterly revenue and operating results are
difficult to forecast. As a result, comparing our period-to-period operating
results may not be meaningful, and results of operations from prior periods may
not be indicative of future results. It is likely that our future quarterly
results will fluctuate from time-to-time, which could adversely affect the
market value of our common stock.

Because our online brokerage business is in an early stage, we cannot guarantee
that customers will accept or use our online services or that we will be able
to effectively manage our expansion

We are in an early stage of development of our online brokerage business.
Customer acceptance and demand for online brokerage services is uncertain due
to the industrys relatively short history, rapid technological changes,
evolving industry standards, and frequent new service and product
announcements, introductions and enhancements. Customers of traditional full
service brokerage firms, banks or discount brokers may be slow to convert to
online brokerage services for a variety of reasons, including security and
privacy concerns. If the market for private label online brokerage services
does not develop as we expect, our business, financial condition and operating
results could be materially and adversely affected.

We must adapt to rapid technological changes to remain competitive

The brokerage and financial services industries are characterized by rapid
technological change, changes in customer requirements, frequent new service
and product introductions and enhancements, and emerging industry standards.
Recent legislative changes have led to increased competition and consolidation
in the industry. The introduction of services or products utilizing new
technologies and the emergence of new industry standards and practices can
render existing services or products obsolete and unmarketable. Our future
success will depend, in part, on our ability to accomplish the following:



| |  |  develop and incorporate leading
technologies; enhance our existing services and products;                                                    
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  develop new services and products that address the increasingly
sophisticated and varied needs of our customers and prospective
customers; and
|
| |  |  respond to technological advances and emerging industry standards
and practices on a timely and cost-effective basis.                         

The development of new services or products or enhanced versions of
existing services and products may require substantial capital to cover related
expenditures. We cannot assure you that we will be successful in effectively
implementing and using new technologies, adapting our services and products to
emerging industry standards, or developing, introducing and marketing service
and product enhancements or new services and products. Additionally, we may
experience difficulties that could delay or prevent the successful development,
introduction or marketing of these services and products, or our new services
and product enhancements may fail to adequately meet the requirements of the
marketplace and achieve market acceptance. Our failure, for technical reasons
or otherwise, to develop and introduce new services and products or
enhancements of existing services and products in a timely manner in response
to changing market conditions or customer requirements, or to achieve market
acceptance of our new services and products, could adversely and materially
affect our business, financial condition and operating results.

We rely upon third parties to provide critical transaction functions

All of our servers are leased from or housed at Digital Island, Inc. under
an agreement whereby Digital Island provides turn-key maintenance of our
servers that route all of our transaction traffic. Automated Financial
Systems, Inc. currently provides the software systems that manage our online
securities brokerage activity. We also have an agreement with Securities
Industries Software Corporation, a division of ADP, to run our back office
system. Finally, we contract with other vendors to produce, batch and mail our
confirmations and customer reports. We do not have long-term agreements with
any of these third parties, including Digital Island. As our business grows,
we cannot be assured that the technology and services we require from third
parties will be available. A third party contractors inability to meet our
needs could cause us to be unable to timely and accurately process our
customers transactions or maintain complete and accurate records of such
transactions. In such event, we may be forced to slow the expansion of our
customer base or risk the loss of customers. Our long-term objective is to
develop our own systems to replace certain of these functions provided by
critical third party vendors. However, for the next several years, we will
continue to be

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dependent upon third party vendors, and there is no assurance
that we will be able to successfully develop and install internal systems to
provide such services, or that our systems will be cost-effective or as
dependable as those of our third party vendors.

If the equipment and systems we rely upon fail or perform poorly, our customers
could suffer delays in trading, which could subject us to claims for those
losses and lost accounts

Our online brokerage service receives and processes trade orders
principally through the Internet and the telephone. This method of trading
depends heavily on the integrity of the technology supporting it. Orders placed
from the close of the stock markets one day until the opening of the next
business day must be processed through our system in a short period of time
prior to the opening of the stock markets. During peak trading times, our
systems will be subject to heavy volume that could cause them to operate at
unacceptable speeds or to fail. Any significant degradation or failure of our
systems or any other systems in the trading process (e.g., online service
providers, our trading engine, record keeping and data processing functions
performed by third parties, and third-party software such as Internet
browsers), even for a short time, could cause customers to suffer delays in
trading. Such delays could result in substantial customer losses and could
subject us to claims or litigation for those losses or to the loss of
dissatisfied customers.

We rely on strategic alliances with third parties to develop and maintain our
private label customer base, and we cannot guarantee that we will be able to
attract customers through these relationships

A major facet of our growth strategy involves developing relationships
with online bank service providers, small to medium-sized financial
institutions and affinity groups and Internet portals. We rely on these third
parties to market our services, and we expect that a large portion of our
online customer base will come from persons and entities that have pre-existing
customer or membership relationships with these entities and organizations. If
we fail to maintain existing relationships with these online bank service
providers, small to medium-sized financial institutions or affinity groups and
Internet portals, or if we fail to develop new relationships, our ability to
attract new customers may be impaired. We cannot assure you that our current
relationships with these organizations will continue to exist, nor can we
assure you that we will be able to draw customers out of these relationships.
Our inability to maintain such relationships or to acquire customers from these
relationships could adversely and materially affect our business, financial
condition and operating results.

The extension of credit to our customers in margin and cash transactions
exposes us to credit losses if customers breach their obligations to us

We lend funds to our customers and customers of our correspondent firms as
margin credit. These loans are made to customers on a secured basis, with the
firm maintaining collateral in the form of saleable securities, cash or cash
equivalents. In addition, cash securities transactions subject us to credit
risk during the period between the execution of a trade and the settlement of
such transaction by the customer.

If our customers and correspondent firms or a customer of a correspondent
firm, fail (a) to pay for their purchases, (b) to supply securities that they
have sold, (c) to repay funds they have borrowed, or (d) to satisfy any other
customer obligations, we may incur losses. There is no assurance that the
customer or correspondent firm will satisfy obligations to us or that the
collateral securing margin loans will cover the losses. In such an event, we
would be required to absorb the loss.

Our business is also subject to the risk that market declines will reduce
the value of margin collateral below required coverage levels. Our agreements
with margin and short account clients permit us to liquidate or buy securities
if the amount of our collateral becomes insufficient. However, we may be unable
to liquidate or buy securities for various reasons, including the following:



| |  |  |  the securities may not be actively traded;                                                        
| |  |  | ----------------------------------------------------------------------------------------------------
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| |  |  |  the securities might be a large block of securities that exceeds current market demand; or        
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| |  |  |  trading might be halted in a security for various reasons, including the issuance of a stop order.

As of June 30, 2000, customer margin loans owed to us totaled approximately
$191.9 million.

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Our failure to comply with net capital requirements could result in termination
of our business

Securities broker-dealers are subject to stringent rules with respect to
the maintenance of specific levels of net capital. Net capital is the measure
of a broker-dealers readily available liquid assets, reduced by its total
liabilities other than approved subordinated debt. Thus, as we increase the
amount of margin credit extended to our customers, our net capital requirements
increase. Furthermore, we will, following the closing of the Kinnard and
Steichen transactions, be subject to additional net capital requirements for
each of these new broker-dealer subsidiaries. If our broker-dealer
subsidiaries fail to maintain required net capital levels, we may be subject to
suspension or revocation of our license, which could ultimately lead to our
liquidation. If the net capital rules are changed or expanded, or if we incur
an unusually large charge against net capital, we might be required to limit or
discontinue those portions of our business that require intensive use of
capital. A large operating loss or charge against net capital could adversely
affect our ability to expand or even maintain our present levels of business.
Failure to meet our regulatory minimum net capital requirements could require
us to cease business.

We may incur significant losses from our trading and investment activities due
to market fluctuations and volatility

We generally maintain trading and investment positions in the fixed
income, currency and equity markets. To the extent that we own securities (have
long positions) in any of those markets, a downturn in those markets could
result in material losses from a decline in the value of those long positions.
Conversely, to the extent that we have sold securities that we do not own (have
short positions) in any of those markets, an upturn in those markets could
expose us to potentially unlimited losses as we attempt to cover our short
positions by acquiring assets in a rising market. We may from time-to-time have
a trading strategy consisting of holding a long position in one asset and a
short position in another, from which we expect to earn revenues based on
changes in the relative value of the two assets. If, however, the relative
value of the two assets changes in a direction or manner that we did not
anticipate, or against which we are not hedged, we might realize a loss in
those paired positions. In addition, we maintain trading positions that can be
adversely affected by the degree to which trading prices fluctuate over a
particular period, in a particular market, regardless of market levels.

We may not complete the Kinnard merger

While we have entered into a definitive agreement with Kinnard, the
completion of the transaction remains subject to many conditions. If the
merger is not completed, we will be required to absorb the expenses and costs
associated with the evaluation and negotiation of, and the preparation for
closing of, the mergers. We expect that the Kinnard acquisition will improve
our fixed charge coverage, i.e., our ability to pay scheduled principal and
interest on our debt. Additionally, we are obligated to release $1.0 million
currently held in escrow to Kinnard if we fail to complete that merger due to,
among other things, our knowing action or inaction.

Failure to successfully integrate the Steichen and Kinnard businesses will
negatively affect our ability to realize potential efficiencies

Although we intend to operate Steichen as a separate entity, following the
completion of the Kinnard and Steichen mergers, we will be required to
integrate the operations, technology and services of these organizations into
our own organization. This integration must occur in a timely and efficient
manner. Additionally, we will want to retain key personnel from both
organizations. Following integration of the organizations, we face the risk
that expected revenue growth and synergistic benefits may not materialize. Our
failure to successfully integrate these organizations or to successfully manage
the challenges presented during and following the integration process may
result in our not achieving the anticipated potential benefits of the
acquisitions. Any delay encountered in the transition process could materially
and adversely affect our operations and financial condition.

Our success depends upon the services of key personnel

For the foreseeable future, we will place substantial reliance upon the
personal efforts and abilities of Eldon C. Miller, Chairman of the Board and
Chief Executive Officer; David B. Johnson, President; and Todd W. Miller, Chief
Financial Officer. The loss of services of any of these individuals likely
would materially and adversely affect our business, financial condition and
operating results.

We cannot guarantee that we will be able to retain existing personnel and
attract and retain additional personnel to support the growth of our business

Our success is dependent upon our ability to retain and hire highly
skilled personnel. As our business grows, we will need to hire many additional
employees. We face intense competition from other broker-dealers in hiring
experienced and licensed personnel. Additionally, we face a tight and expensive
employment market in general, particularly for skilled programmers,

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customer
service representatives and systems maintenance personnel. We cannot assure you
that we will be able to retain such personnel or hire and retain additional
qualified and skilled personnel.

Our management exercises substantial control over our business

As of July 31, 2000, our directors and executive officers beneficially
owned, in the aggregate, approximately 16,300,000 shares of our common stock,
representing approximately 75% of our common stock outstanding. Additionally,
we issued approximately 4,300,000 shares of our common stock, or
approximately 20% of our then outstanding common stock, to the shareholders of
Steichen, upon completion of the Steichen transaction on August 1,
2000. After completion of the
Steichen transaction, Messrs. Miller, Johnson, Kuehn, Rahm, John E. Feltl and
John C. Feltl own approximately 69% of our outstanding common stock.
Accordingly, they will control matters requiring approval of our shareholders,
including the election of our Board of Directors.

The Securities and Exchange Commission and the National Association of
Securities Dealers could require us to change or discontinue our method of
compensating entities

Many of the third parties with which we contract to provide access to our
online trading services are not currently registered with the Securities and
Exchange Commission (the SEC) as broker-dealers under the Securities and
Exchange Act of 1934, as amended. If we compensate these third parties so that
they have a salespersons stake in the securities transactions, they may be
considered to be acting as broker-dealers. Based on prior National Association
of Securities Dealers (NASD) interpretations, we believe we may compensate
financial institutions based on the value of the transactions. However, we
cannot guarantee that the NASD will not change its current position on
compensation of financial institutions. Additionally, no definitive
interpretations exist as to compensation of non-financial institutions.
Currently, we compensate such third parties based on the number of orders
executed through their portals. The possibility exists that a referral fee paid
to a third party based on the number of new customer accounts or orders
executed could cause the third party to be deemed a broker-dealer. In such
case, we may be required to discontinue this marketing strategy.

We believe that our current method of compensating Internet service
portals is consistent with the current position of the SEC as reflected in
no-action letters. However, the possibility exists that the SEC could determine
that our method of compensating portals does not meet the standards of its
no-action letters, or that the SEC could change its current policy and no
longer allow such compensation to non-broker-dealers. Any change in the SECs
current policy could materially and adversely affect our business, financial
condition and operating results.

We cannot guarantee that we will be financially or otherwise able to make
necessary acquisitions to fulfill our growth strategy or that the acquisitions
we do make will be successful

We plan to make additional strategic acquisitions of complementary
brokerage and technology companies serving the securities industry to help our
business grow. We cannot guarantee that we will have the financial resources to
make acquisitions when they become available, nor can we guarantee that
satisfactory acquisition alternatives will always be available. When we do make
acquisitions, they may entail significant risks, including possible difficulty
in assimilating acquired operations and products, diverting managements
attention to other business concerns, amortizing acquired intangible assets,
and potentially losing key employees of acquired companies. We cannot guarantee
that we will be able to successfully integrate any operations, personnel,
services or products that might be acquired in the future, or that any such
acquisitions will enhance our business, financial condition or operating
results.

We cannot guarantee the success of our encryption technology

The secure transmission of confidential information over public networks
places a significant barrier to online commerce and communication. We rely on
encryption and authentication technology, including public key cryptography
technology licensed from third parties, to provide the security and
authentication necessary to effect secure transmission of confidential
information. We cannot assure you that advances in computer capabilities, new
discoveries in the field of cryptography or other events or developments will
safeguard against a compromise or breach of technologies to be used by us to
protect customer transaction data. Any such compromise of our security could
adversely and materially affect our business, financial condition and operating
results.

Our business plan will require more capital, and we cannot guarantee that we
will obtain additional financing to meet future capital needs

Our business plan will require additional capital. Each of our
broker-dealer subsidiaries is required to maintain certain minimum regulatory
capital amounts. We have historically retained capital in excess of minimum
regulatory requirements. To the

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extent these broker-dealers hold customer
funds, the capital requirement is much greater. In particular, growth in our
clearing and customer margin business will require increasing levels of
capital. Should the proportionate increase in customer margin balances outpace
earnings, we may require additional capital. If we issue equity securities to
raise additional capital, the percentage ownership of our shareholders will be
reduced, shareholders may experience dilution in net book value or earnings per
share, or such equity securities may have rights, preferences or privileges
senior to holders of our common stock. We cannot assure you that additional
financing will be available when needed on terms favorable to us, if at all, or
that it will not be senior to the Convertible Notes. If adequate funds are not
available on acceptable terms, we may be forced to slow our growth plan and
unable to take advantage of future opportunities or respond to competitive
pressures or unanticipated requirements. Our inability to do so could
materially and adversely affect our business, financial condition and operating
results.

Employee misconduct is difficult to detect and could harm our business

We run the risk that employee misconduct could occur, including binding us
to transactions that exceed authorized limits or present unacceptable risks, or
hiding unauthorized or unsuccessful activities. This type of misconduct could
result in unknown and unmanaged losses. Employee misconduct could also involve
the improper use of confidential information, which could result in the loss of
confidential and proprietary information, regulatory sanctions or harm to our
reputation. We may not be able to detect, deter or prevent any of these types
of employee misconduct.

Securities Industry Risks

Unpredictable economic and market conditions cause uncertainty in the
securities industry

The securities business is, by its nature, subject to various risks,
particularly in volatile or illiquid securities markets, including the risk of
losses resulting from the underwriting or ownership of securities, customer
fraud, employee errors and misconduct, failures in connection with the
processing of securities transactions and litigation. Our business and its
profitability is affected by many factors, including the following:



| |  |  |  the volatility and price level of the securities markets;                             
| |  |  | ----------------------------------------------------------------------------------------
|
| |  |  |  the volume, size and timing of securities transactions;                               
|
| |  |  |  the demand for investment banking services;                                           
|
| |  |  |  the level and volatility of interest rates;                                           
|
| |  |  |  the availability of credit; and                                                       
|
| |  |  |  legislation affecting the business, financial communities, and the economy in general.

Any one of the above factors could adversely affect our financial condition and
operating results.

If stock prices decrease, or if trading volumes decrease, commissions,
investment banking and margin interest revenue, will decline

A market downturn could lead to a decline in the volume of transactions
that we execute for our customers and, therefore, to a decline in commission
and clearing revenue. A market downturn could also reduce customer margin
balances which would, in turn, result in reduced margin interest revenue.
Similarly, unfavorable financial or economic conditions would likely reduce the
number and size of transactions in which we provide underwriting, mergers and
acquisitions advisory and other services. Our investment banking revenue, in
the form of financial advisory and underwriting fees, are directly related to
the number and size of the transactions in which we participate and would,
therefore, be adversely affected by a sustained market downturn.

We perform underwriting, brokerage and trading services for small
capitalization, emerging and start-up companies, whose securities may be
particularly volatile and subject to greater risks than larger, established
companies

A large portion of our business and the business of Kinnard, through JGK,
and Steichen focuses on the underwriting, brokerage and trading of securities
of small capitalization, emerging and start-up companies, which may be subject
to greater risks than the equity markets as a whole and, consequently, may be
marketable to only a limited segment of the investing public. We

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believe that
many small capitalization, emerging and start-up companies have significant
potential for growth, although such companies generally have limited product
lines, markets, market shares and financial resources, and their securities may
trade less frequently and in more limited volume than those of more established
companies. Additionally, in recent years, the stock market has experienced a
high degree of price and volume volatility for the securities of many small
capitalization, emerging and start-up companies. In particular, small
capitalization, emerging and start-up companies that trade in the
over-the-counter market have experienced wide price fluctuations not
necessarily related to the operating performance of such companies.

Our investment banking activities subject our capital to risks

The potential risks of our investment banking activities include market,
credit and liquidity risks, which risks arise primarily when underwritten
securities cannot be resold, for any reason, at anticipated price levels.
Further, under applicable securities laws and court decisions regarding
underwriters liability and limitations on indemnification by issuers, an
underwriter may be exposed to substantial claims by securities purchasers or
sellers arising out of public and private offerings of equity and debt
instruments.

Our clearing operations expose us to additional potential losses

Our clearing division provides clearing and execution services for all of
our brokerage businesses, as well as for our correspondent firms. Clearing
services include the confirmation, receipt, settlement and delivery functions
involved in securities transactions. As a clearing broker, our clearing
division also assumes direct responsibility for the possession and control of
customer securities and other assets, the clearance of customer securities
transactions and customer account record keeping. We risk losses if
correspondent firms fail to reimburse us if their customers fail or refuse to
perform their obligations to us. Additionally, as a self-clearing securities
firm, we are subject to substantially more regulatory control and examination
than brokers that rely on others to perform those functions, such as many of
our competitors. Errors in performing clearing functions, including clerical
and other errors related to the handling of funds and securities held by us on
behalf of customers and introducing brokers, could lead to civil penalties
imposed by regulatory authorities as well as claims brought by customers and
others.

We are subject to increasing governmental and organizational regulation

Our business, and the securities industry generally, is subject to
extensive regulation at both the federal and state levels. In addition,
self-regulatory organizations, such as the NASD, require strict compliance with
their rules and regulations. Among other things, these regulatory authorities
impose restrictions on sales methods, trading practices, use and safekeeping of
customer funds and securities, record keeping and the conduct of principals and
employees. The extensive regulatory framework applicable to broker-dealers, the
purpose of which is to protect customers and the integrity of the securities
markets, imposes significant compliance burdens on us. Failure to comply with
any of the laws, rules or regulations of any independent, state or federal
regulatory authority could result in a fine, injunction, suspension or
expulsion from the industry, which could materially and adversely impact us.
Furthermore, amendments to existing state or federal statutes and regulations
or the adoption of new statutes and regulations could require us to alter our
methods of operation at costs which could be substantial.

We are subject to an increased risk of legal proceedings

Many aspects of our business involve substantial risks of potential
liability and regulatory enforcement by state and federal regulators.
Additionally, participants in the securities industry face an increasing amount
of litigation and arbitration proceedings. Underwriters and selling agents may
be liable if they make material misstatements or omit material information in
prospectuses and other communications regarding underwritten offerings of
securities. Dissatisfied customers regularly make claims against securities
firms and stockbrokers for fraud, unauthorized trading, suitability, churning,
mismanagement and breach of fiduciary duty. We cannot assure you that these
types of proceedings will not materially and adversely affect us. Further,
while certain legal proceedings may be settled or otherwise resolved without a
material adverse economic effect on us, those proceedings may still result in
adverse publicity which could affect our operations.

The NASDAQ market continues to implement reforms to monitor trading, which
could cause increased compliance requirements and costs

NASD, the trade organization supervising the NASDAQ market, conducts
policing of NASDAQ-listed companies. In recent years, the NASD boosted its
internal compliance and monitoring programs. In addition, loosened restrictions
on relationships between financial institutions and securities firms are
leading to increased competition and consolidation in the industry. We face the
risk that the NASD will implement further changes. For example, if the NASDs
regulatory unit, NASD Regulation, Inc. (NASDR), combines with the New York
Stock Exchange regulatory unit, we could face additional compliance
requirements. We cannot fully anticipate the effects of any further NASDAQ
restructuring on our operations. The cost of

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compliance with any new rules,
regulations and procedures instituted by the NASDR could be significant.
Increased compliance costs or our inability to attain or maintain the listing
of underwriting clients on the NASDAQ system could adversely affect our
performance.

We face substantial competition within the securities industry

In all aspects of our business, and at both the national and regional
level, we compete with numerous other securities firms, commercial banks,
investment banking firms, insurance companies, asset management firms, trust
companies and others. Our competitors have substantially greater access to
capital and other resources not available to us. In addition, many of these
competitors offer a wider range of services and financial products than we do
and possess greater name recognition and more extensive customer bases than we
do. These competitors may be able to respond more quickly to new or changing
opportunities, technologies and customer requirements. These competitors may
also be able to undertake more extensive promotional activities and offer more
attractive terms and prices to their customers, possibly even sparking a price
war within the brokerage business. Finally, current and potential competitors
may continue to establish cooperative relationships among themselves or with
third parties to enhance their services and products. Accordingly, it is
possible that new competitors or alliances among competitors may emerge and
rapidly acquire significant market share.

The general financial success of companies within the securities industry
over the past several years, and the elimination of barriers between financial
institutions and securities firms through the Gramm-Leach-Bliley Act, is
expected to continue to attract new competitors to the industry, including
banks, insurance companies, providers of online financial and information
services and others, as such companies expand their product lines. Many of
these companies now offer their customers certain corporate and individual
financial services traditionally provided by securities firms. Due to the
current trend toward consolidation in the securities industry, our competitors
success in attracting and retaining customers drawn to the convenience of
one-stop shopping could adversely affect our business and our ability to grow.

We also expect the intensely competitive market for online brokerage
services to continue to evolve rapidly. We will encounter direct competition
from other brokerage firms providing either telephone or online brokerage
services, or both. Additionally, we compete for customer investment dollars
with financial institutions, mutual fund sponsors and other organizations, some
of which provide electronic brokerage services.

The clearing business has become considerably more competitive over the
past few years, and there are numerous large, highly visible and well-financed
securities firms that either have begun offering clearing services or have
attempted to increase their share of the market. Despite our efforts to remain
competitive, our clearing customers may decide to discontinue using our
services. In addition, there has been consolidation within the financial
services industry by securities firms and other financial institutions having
financial resources far greater than us. These developments have increased
competition from firms with greater capital resources and possibly greater
operating efficiencies than ours. We run the risk that one of our clearing
competitors could create a successful private label solution for clients, which
could result in fewer clearing customers for us.

We cannot assure you that we will be able to compete effectively with
current or future competitors. Likewise, we cannot assure you that the
competitive pressures we face will not materially or adversely affect our
business, financial condition and operating results.

Losses due to customer fraud could adversely affect our business

We are exposed to potential losses resulting from fraud and other
misconduct by customers, such as fraudulent trading (including access to
legitimate customer accounts, or the use of a false identity to open an
account) or the use of forged or counterfeit checks for payment. These types of
fraud may be difficult to prevent or detect. We may not be able to recover the
losses caused by these activities. Any of these losses could materially and
adversely affect our business, financial condition and operating results.

New laws regarding the Internet may be passed, which could hinder our ability
to deliver our online services

The legal and regulatory environment surrounding the Internet is uncertain
and rapidly changing. New laws and regulations, including securities laws and
regulations, could be difficult to comply with and could increase our costs of
doing business and prevent us from delivering our products and services over
the Internet, which could adversely affect our customer base and our revenue.
In addition to new regulations being adopted, existing laws may be applied to
the Internet. New and existing laws may cover issues that include sales and
other taxes, access charges, user privacy, characteristics and quality of
products and services, and other claims based on the nature and content of the
Internet.

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We are dependent on Internet infrastructure in conducting our business

The successful implementation of our online business strategy will depend
in large part upon the continued development of Internet infrastructure, such
as a reliable network backbone with the necessary speed, data capacity and
security, and timely development of complementary products for providing
reliable Internet access and services. Because global commerce and online
exchange of information on the Internet and other similar open wide area
networks are new and evolving, we cannot predict with any assurance whether the
Internet will support increasing use. The Internet has experienced, and is
expected to continue to experience, significant growth in the number of users
and the amount of content. We cannot assure you that the Internet
infrastructure will continue to be able to support the demands placed on it.
Furthermore, the performance or reliability of the Internet could be adversely
affected by this continued growth.

We do not expect to pay dividends in the foreseeable future

We intend to retain all earnings in the foreseeable future for our
continued growth and, thus, do not expect to declare or pay any cash dividends
in the foreseeable future. Additionally, our ability to pay dividends in the
future may be restricted by our brokerage subsidiaries obligations to comply
with the net capital rules applicable to broker-dealers.

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