FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

(Mark One)

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934

For the quarterly period ended 09-30-98
                                       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: 0-26868


                      LEXINGTON GLOBAL ASSET MANAGERS, INC.


DELAWARE                                                     22-3395036
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)


PARK 80 WEST PLAZA TWO
SADDLE BROOK, NJ 07663
201-845-7300


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
Yes  X   No ____


              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

         Indicate by check mark whether the  registrant  has filed all documents
and reports  required  to be filed by Section 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes ____ No ____
 
                  (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock, as of September 30, 1998.


                      Common Stock-$.01 Par Value Per Share
                          Authorized 15,000,000 Shares
                          4,678,537 Shares Outstanding




                                TABLE OF CONTENTS


         Part I.  Financial Information                                 

                  Condensed Consolidated Statements of Financial Condition    
                  Condensed Consolidated Statements of Operations              
                  Condensed Consolidated Statements of Cash Flows           
                  Notes to Condensed Consolidated Financial Statements       
                  Management's Discussion and Analysis of Financial Condition
                       and Results of Operations                             

         Part II. Other Information
                  Legal Proceedings and Exhibits                            



                    
                                                 
Part I.  Financial Information
Item I.  Financial Statements

<TABLE>
<S>                                                 <C>            <C> 

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                                    9/30/1998     12/31/1997
                                                    (Unaudited)
Assets:
Cash and cash equivalents:
   Cash                                              $ 856,152      $ 193,383
   Money market accounts                             6,751,282      8,511,915
                                                   ------------   ------------
                                                     7,607,434      8,705,298
                                                   ------------   ------------
Receivables:
   Investment advisory and management fees             920,159      1,233,377
   Due from funds and other                            749,483        596,333
                                                   ------------   ------------
                                                     1,669,642      1,829,710
                                                   ------------   ------------
Marketable securities                                1,893,557      1,524,788
Prepaid expenses                                     1,724,312      1,708,122
Prepaid taxes                                           11,780          6,203
Fixed assets (net of accumulated depreciation
   and amortization)                                 1,211,487      1,384,772
Intangible assets (net of accumulated amortization)    182,526        194,676
Deferred income taxes                                1,802,467      1,938,213
Other assets                                             8,606        141,491
                                                   ------------   ------------
       Total assets                                $16,111,811   $ 17,433,273
                                                   ============   ============

Liabilities:
Accounts payable and other accrued expenses        $ 3,528,148    $ 4,437,585
Deferred income                                      1,841,984      1,626,123
Deferred compensation                                  756,416              -
Federal income taxes payable                           889,972        863,667
Other liabilities                                       16,970         10,579
                                                   ------------   ------------
       Total liabilities                             7,033,490      6,937,954
                                                   ------------   ------------
Minority interest                                      409,581        405,058

Stockholders' Equity:
Common stock, $.01 par value; 15,000,000 
  authorized shares; 5,487,887 issued                   54,879         54,879
Additional paid-in capital                          21,571,328     21,708,142
Accumulated deficit                                 (8,849,869)    (9,345,918)
Deferred compensation                               (1,276,679)    (1,654,342)
Treasury stock at cost                              (2,830,919)      (672,500)
                                                   ------------   ------------
       Total stockholders' equity                    8,668,740     10,090,261
                                                   ------------   ------------

       Total liabilities and stockholders' equity  $16,111,811   $ 17,433,273
                                                   ============   ============


See  accompanying  notes  to the  condensed  consolidated  financial  statements
(Unaudited).
</TABLE>

                                                                           
<TABLE>
<S>                                                       <C>              <C>             <C>            <C> 


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

                                                            Three Months Ended Sept. 30,     Nine Months Ended Sept. 30,
                                                                1998           1997            1998           1997

Revenues:
   Investment advisory:
      Mutual fund management fees (including approx.
           $92,000,  $178,000,  $278,000, and $465,000
            respectively from related parties)              $ 2,369,093    $ 3,401,795     $ 7,903,443    $ 9,328,513
      Mutual fund commissions                                    11,304          9,406          60,252         38,481
      Other management fees (including approximately
          $761,000,  $694,000,  $2,245,000, and
          $1,969,000 respectively from related parties)       2,045,178      1,788,396       5,955,961      5,129,896
   Commissions income                                            28,604         51,670          80,580        121,141
   Other income/(loss)                                         (114,693)       221,931          16,033        658,412
                                                            -----------    -----------     -----------    -----------
        Total revenues                                        4,339,486      5,473,198      14,016,269     15,276,443
                                                            -----------    -----------     -----------    -----------

Expenses:
   Salaries and other compensation                            2,131,241      2,197,855       6,887,635      6,568,937
   Selling and promotional                                      264,573        232,277         760,205        797,402
   Administrative and general                                 1,729,678      1,853,768       5,400,263      4,291,135
                                                            -----------    -----------     -----------    -----------
        Total expenses                                        4,125,492      4,283,900      13,048,103     11,657,474
                                                            -----------    -----------     -----------    -----------
        Income before income taxes and minority interest        213,994      1,189,298         968,166      3,618,969

Provision for income  taxes
   Current                                                      199,553        293,036         319,597        237,530
   Deferred                                                     (83,279)       250,429         135,745      1,040,125
                                                            -----------    -----------     -----------    -----------
        Total provision                                         116,274        543,465         455,342      1,277,655
                                                            -----------    -----------     -----------    -----------
        Income before minority interest                          97,720        645,833         512,824      2,341,314
Minority interest                                                 8,703         17,009          16,773         41,744
                                                            -----------    -----------     -----------    -----------
        Net income                                             $ 89,017      $ 628,824       $ 496,051     $2,299,570
                                                            ===========    ===========     ===========    ===========

Earnings per share:
   Basic earnings per share                                       $0.02          $0.12           $0.10          $0.43
                                                            ===========    ===========     ===========    ===========
   Diluted earnings per share                                     $0.02          $0.12           $0.10          $0.43
                                                            ===========    ===========     ===========    ===========

   Average shares outstanding during the period               4,982,511      5,231,409       5,088,603      5,371,806
                                                            ===========    ===========     ===========    ===========



See  accompanying  notes  to the  condensed  consolidated  financial  statements
(Unaudited).
</TABLE>



<TABLE>
<S>                                                                         <C>                <C>

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited)

                                                                             Nine Months Ended Sept. 30,
                                                                              1998               1997
                                                                              ----               ----
Cash flows from operating activities:
Net income                                                                    $ 496,051        $ 2,299,570
Adjustments to reconcile net income to net cash provided
   by  operating activities:
      Depreciation and amortization                                             249,450            243,802
      Deferred income taxes                                                     135,746          1,040,125
      Minority interest                                                          16,773             41,744
      Compensation expense - stock options                                      466,351                  -
Change in assets and liabilities
      Receivables                                                               160,068             13,707
      Marketable securities                                                    (368,769)          (547,824)
      Prepaid expenses                                                          (16,190)        (1,134,393)
      Prepaid taxes                                                              (5,577)             5,697
      Accounts payable and accrued expenses                                    (909,437)           112,257
      Federal income taxes payable                                               26,305           (164,326)
      Deferred income                                                           215,861            280,141
      Deferred compensation                                                     756,416                  -
      Other, net                                                                139,276             27,902
                                                                         ---------------    ---------------
Net cash provided by operating activities                                     1,362,324          2,218,402

Cash flows from investing activities:
      Purchases of furniture, equipment and leasehold
         improvements                                                           (64,015)          (298,529)

Cash flows from financing activities:
      Dividends and other                                                      (147,000)                 -
      Purchase of treasury stock                                             (2,249,173)        (2,280,375)
                                                                         ---------------    ---------------
Net cash used in financing activities                                        (2,396,173)        (2,280,375)
Net decrease in cash and cash equivalents                                    (1,097,864)          (360,502)
Cash and cash equivalents, beginning of period                                8,705,298          7,529,824
                                                                         ---------------    ---------------
Cash and cash equivalents, end of period                                    $ 7,607,434        $ 7,169,322
                                                                         ===============    ===============



See  accompanying  notes  to the  condensed  consolidated  financial  statements
(Unaudited).
</TABLE>





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.  Basis of Presentation:

The interim  financial  information  presented is  unaudited.  In the opinion of
Company  management,  all  adjustments,  (consisting  only of  normal  recurring
accruals),  necessary to present  fairly the  condensed  consolidated  financial
position and the results of  operations  for the interim  period have been made.
The  financial  statements  should  be read in  conjunction  with the  financial
statements  and related notes in the Company's  1997 Annual Report on Form 10-K.
The results of operations for the interim period  presented are not  necessarily
indicative of the results to be expected for the full year.


2.  Common Stock Buy-Back Program

On March 7, 1997 and  September  17, 1998 the Board of  Directors of the Company
authorized share repurchase programs of up to 750,000 shares for a total program
of up to 1,500,000  shares.  Repurchases have been and will be made from time to
time in the open market or through privately  negotiated  transactions at market
price. The stock  repurchase  plans have terms of three years.  During 1997, the
Company  repurchased  313,000  shares of stock for a total of  $2,280,375.  Also
during 1997, 233,000 treasury shares were awarded under the Company's Restricted
Stock  Award  Plan.  In the first nine  months of 1998,  the  Company  purchased
507,350  shares of its stock for a total of  $2,249,173.  During the nine months
ended, 11,000 treasury shares were awarded under the Company's  Restricted Stock
Award Plan. To date, 11,000 shares have been issued under the plan.


3.  New Accounting Pronouncements

In June 1997,  FASB  issued  SFAS No.  131,  "Disclosures  about  Segments of an
Enterprise and Related Information".  SFAS No. 131 establishes standards for the
way a public  enterprise  reports  information  about operating  segments in its
annual and interim  financial  statements.  It also  establishes  standards  for
related  disclosures  about  products and services,  geographic  areas and major
customers.  Generally,  financial information will be required to be reported on
the basis used by management for evaluating segment performance and for deciding
how to allocate  resources  to segments.  SFAS No. 131 is  effective  for fiscal
years  beginning  after  December  15,  1997 and need not be  applied to interim
reporting  in the initial  year of  adoption.  The Company  intends to adopt the
provisions  of  SFAS  No.  131 in its  December  31,  1998  annual  consolidated
financial statements,  however, management of the Company has not yet determined
what additional information, if any, will need to be reported.

In  July  1998,  the  Emerging  Issues  Task  Force  ("EITF")  of the  Financial
Accounting Standards Board reached a consensus on EITF  Issue 97-14, "Accounting
for Deferred Compensation  Arrangements Where Amounts Earned are Held in a Rabbi
Trust and Invested" ("EITF 97-14"). Under EITF 97-14, assets of the trust are to
be consolidated with those of the employer and the value of the investments held
in the rabbi trust should be classified as a liability.  The Company has adopted
EITF 97-14 as of September 30, 1998. The investments held in the rabbi trust are
diversified  into other  investments,  and at September  30, 1998,  the value of
these investments was $756,416.


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

Management's Discussion and Analysis contained in the Company's Annual Report on
Form 10-K for December 31, 1997 is  incorporated  herein by reference and should
be read in conjunction with the following.

Nine Months Ended September 30, 1998 and 1997

The  consolidated  net income for the nine months ended  September  30, 1998 was
$0.5 million,  or $0.10 per share,  compared to $2.3 million, or $0.43 per share
for the first nine months of 1997.

Total assets under  management at September 30, 1998 were $3.2 billion  compared
to $3.8 billion at  September  30,  1997.  Mutual fund assets  under  management
decreased  $0.5 billion  from the year earlier  period from $2.2 billion to $1.7
billion.

Total  revenues of $14.0 million are down $1.3 million from $15.3 million in the
first nine months of 1997.  Mutual fund management  fees, the Company's  largest
revenue source,  decreased $1.4 million to $7.9 million in the first nine months
of 1998 compared to $9.3 million in the first nine months of 1997.  The decrease
is mainly  attributable  to corrections in securities  markets around the world.
These  corrections  began in the emerging  markets of the Far East in the fourth
quarter of 1997 and  immediately  spread to other  emerging  markets  around the
world  through the end of 1997 and into 1998.  With the "Asian  Flu"  showing no
signs of abatement in 1998,  capital  markets around the world began to question
the prospects for continued  economic growth;  consequently,  the more developed
capital markets of the world have experienced corrections.  The Company's assets
under  management  are  invested in capital  markets  around the world and these
investments were adversely impacted by the broad downturn in capital markets.

Other  management fees of $6.0 million  increased $0.9 million from $5.1 million
in the first  nine  months  of 1997.  The  Company's  private  account  business
accounted for $0.7 million of the increase due to continued  increases in assets
under  management  associated  with the continuing  strength of the U.S.  equity
markets.  Institutional  asset  management fees  contributed $0.1 million of the
increase  despite a $0.1 billion decline in assets under  management  during the
quarter.  This reflects the fact that these accounts are billed  quarterly based
on the  assets  under  management  as of the  end of the  immediately  preceding
quarter. Other income decreased $0.6 million from the first nine months of 1997.
This decrease is a result of unrealized depreciation of marketable securities of
$0.3  million  for nine  months  ended  September  30,  1998  versus  unrealized
appreciation of marketable  securities of $0.3 million for the first nine months
of 1997. The unrealized  appreciation/depreciation  stems from  investments in a
number of the products managed by the Company.

Total  expenses of $13.0 million are $1.3 million above total  expenses of $11.7
million  in the first  nine  months  of 1997.  The total  expense  increase  was
primarily due to  administrative  and general expenses of $5.4 million which are
$1.1 million above $4.3 million for the first nine months of 1997. This increase
is almost entirely  attributable to the Company's  administrative  contract with
Select Advisors  ("Select") for the Company's private account  operations.  This
contract was part of the  reorganization  of this  business,  which  occurred in
1996. Under this contract the Company pays fees to Select for administrative and
support  services for the  Company's  private  account  clients.  Because  these
clients  are  billed  annually  in  advance,   the  expenses  incurred  for  the
administrative  contract are deferred and amortized  evenly over a  twelve-month
period.  Expenses in the first nine months of 1998 include  amortization  of the
contract expense across the entire client base. Prior to September 30, 1996, the
date  of  the  West  Coast  reorganization,  a  subsidiary  of the  Company  was
performing  all  administrative  services and  therefore  did not incur a fee to
Select. In 1997 the Company benefited from the fact that no administrative  fees
were  charged  for  those  accounts  which  entered  into  or  renewed  advisory
agreements  prior  to the West  Coast  reorganization  on  September  30,  1996.
Partially   offsetting  this  increase  was  a  decrease  in  sub-advisory  fees
associated  with mutual fund  revenue,  which  decreased  $0.1 million from last
year,  primarily  due to the  decrease  in average net assets in the funds which
have shared revenue arrangements.

Total  personnel  costs of $6.9  million are $0.3  million  higher than the $6.6
million  recorded  in the first  nine  months of 1997.  Of this  increase,  $0.5
million is due to the  amortization  of  restricted  stock issued to certain key
executive   employees  in  1997  and  1998.  In  addition,   salaries  increased
approximately $0.3 million due to annual salary increases.  Partially offsetting
these  increases  was a reduction  in bonus  expense of $0.6  million due to the
Company's lower earnings.

Selling and  promotional  costs of $0.8 million in 1998 were consistent with the
first nine months of 1997.

Pre-tax income of $1.0 million decreased $2.6 million from $3.6 million recorded
in the first nine months of 1997.  The  provision  for state and  federal  taxes
decreased $0.8 million due to the decrease in taxable  income.  The Company used
$1.6  million in net  operating  loss  carryforwards  ("NOLs") in the first nine
months of 1998, and the Company has remaining  approximately  $0.4 million which
are available to offset future  taxable  income and which expire over the period
2003 through 2010.


Three Months Ended September  30, 1998 and 1997

The  consolidated  net income for the three months ended  September 30, 1998 was
$89,017, compared to $628,824 for the third quarter of 1997.

Total  revenues of $4.3 million are 21% below the third quarter of 1997 when the
Company recorded  revenues of $5.5 million.  Mutual fund management fees of $2.4
million  were $1.0 million  below the third  quarter of 1997 due to lower assets
under  management  and a change in the product mix of assets  under  management.
Mutual fund assets under  management  of $1.7 billion are $0.5 billion  lower at
September 30, 1998 than at September  30, 1997.  The most  significant  declines
occurred in the  Lexington  Troika Dialog Russia Fund which dropped $181 million
from the  September  30,  1997  figure  of $200  million,  and in the  Lexington
Worldwide  Emerging  Markets Fund which  dropped $138 million from the September
30, 1997 figure of $204  million.  Other income of negative $0.1 million is $0.3
million below the third quarter of 1997 and reflects unrealized  depreciation in
the  Company's  investment  accounts.  For the three months ended  September 30,
1998,  unrealized  depreciation  totaled  $0.2  million  compared to  unrealized
appreciation  of $0.1  million  for the third  quarter of 1997.  The  unrealized
appreciation/depreciation  stems from  investments  in a number of the  products
managed  by the  Company.  Other  management  fees of $2.0  million  are up $0.2
million from $1.8 million in the prior year period. The private account business
accounts for the increase, due to an increase in assets under management in this
segment.

Total  expenses of $4.1 million  decreased $0.2 million from $4.3 million in the
third quarter of 1997. Of this decrease,  $0.1 million is due to  administrative
and  general   expenses,   and  $0.1  million  is  due  to  salaries  and  other
compensation.  Despite a $0.3 million increase in administrative fees to Select,
administrative and general expenses declined from the prior year period due to a
$0.3 million decrease in sub-advisory fees. These fees declined with the decline
in assets under management.  Also contributing to the decline was a $0.1 million
decrease in  professional  fees,  due to a decline in tax  services and employee
recruiting  fees.  Salaries and other  compensation  decreased $0.1 million as a
result of a $0.4 million  decrease in bonus expense,  due to the Company's lower
profits.  Partially  offsetting  this decline is a $0.2 million  increase in the
amortization  of  restricted  stock  associated  with the granting of restricted
stock in 1997 and 1998, as well as a $0.1 million increase in salaries.

Profit  before tax  amounted to $0.2  million,  down $1.0  million from the $1.2
million  recorded  in the third  quarter of 1997.  The  provision  for state and
federal taxes decreased $0.4 million to $0.1 million in the third quarter due to
lower taxable income.

Year 2000

The Company,  like most  commercial  and financial  institutions,  is working to
ensure that its operating and processing  systems will,  along with those of its
service providers,  continue to function when the Year 2000 arrives. The Company
has developed  and  implemented  a  comprehensive  plan to prepare the Company's
computer  systems and applications for the Year 2000, as well as to identify and
address any other Year 2000  operational  issues  which may affect the  Company.
Progress  reports on the Company's Year 2000 program are presented  regularly to
the Company's Board of Directors and senior management.

The  Company's  Year  2000  program,  which  was  commenced  in June 1997 and is
administered  by internal  staff,  consists of the  following  three  components
relating to the Company's operations: (i) information technology ("IT") computer
systems and  applications  which may be impacted by the Year 2000 problem,  (ii)
non-IT  systems and equipment  which include  embedded  technology  which may be
impacted by the Year 2000  problem and (iii) third party  vendors with which the
Company has significant  relationships  which could adversely affect the Company
if such parties fail to be Year 2000 compliant.

The general  phases common to all three  components  of the Company's  Year 2000
program are: (1) Awareness  (the  identification  of the Year 2000 issues facing
the Company);  (2) Assessment (the  prioritization of the issues and the actions
to be taken); (3) Renovation  (implementation of the specific actions determined
upon assessment, including repair, modification or replacement of items that are
determined not to be Year 2000 compliant); (4) Validation (testing of the new or
modified  information  systems,  other systems, and equipment to verify the Year
2000  readiness);  (5)  Implementation  (actual  operation  of such  systems and
equipment and, if necessary,  the actual implementation of any contingency plans
in the event Year 2000 problems occur,  notwithstanding the Company's renovation
program).

The  Company has  completed  an  assessment  of its Year 2000  readiness  and is
undergoing a renovation of its internal  systems  which are not  currently  Year
2000  compliant.  This phase involves the  replacement  of certain  systems with
purchased software, the renovation of other systems, and the purchase of certain
hardware and other devices,  all of which are Year 2000  compliant.  The Company
anticipates  that the renovation phase related to these  applications  should be
completed by the end of December 1998,  and that the validation  phase should be
completed  by the end of March 1999.  The  implementation  phase should begin in
April 1999.  Excluding normal system upgrades,  the Company estimates that total
costs for conversion and testing of new or modified IT systems and  applications
will aggregate  approximately $50,000, of which an aggregate of $26,000 has been
incurred to date.

The Company is keeping  apprised of the  progress of outside  vendors'  plans to
become Year 2000 compliant. All outside vendors are in the validation phase.

The Company  expects to be Year 2000  compliant by the first quarter of 1999 and
has not yet prepared a contingency plan.  However, in the first quarter of 1999,
the Company will begin to prepare a contingency  plan, which the Company expects
to be completed by the second quarter of 1999.

Although the Company believes it is adequately  addressing its Year 2000 issues,
the  failure  to  correct  a  material  Year  2000  problem  could  result in an
interruption  in,  or a  failure  of,  certain  normal  business  activities  or
operations.  Such  failure  could  materially  affect the  Company's  results of
operations, liquidity and financial condition.

Effects of Inflation

The Company does not believe that inflation has had a significant  impact on the
operations of the Company to date.  The Company's  assets  consist  primarily of
cash and  investments  which are  monetary  in  nature.  However,  to the extent
inflation results in rising interest rates with the attendant adverse effects on
the securities  markets and on the values of  investments  held in the Company's
accounts,  inflation may adversely affect the Company's  financial  position and
results of operations. Inflation also may result in increased operating expenses
(primarily  personnel-related  costs) that may not be readily recoverable in the
fees charged by the Company.

Liquidity and Financial Condition

The  Company's   business  typically  does  not  require   substantial   capital
expenditures.  The most  significant  investments  are in technology,  including
computer equipment and telephones.

Historically,  the  Company  has been  cash  self-sufficient.  Cash  flows  from
operations have ranged between inflows of $3.7 million and $1.5 million over the
past three years.  In the first nine months of 1998 the Company had cash inflows
from  operations of $1.4  million.  The major source of this cash inflow was net
income.

Net cash from investing  activities  has ranged between  inflows of $0.5 million
and outflows of $0.5  million  over the past three years.  Outflows of cash from
investing  activities were just marginally  negative in the first nine months of
1998 reflecting the purchase of computer equipment.

Cash flows from financing  activities  consistently  have been negative over the
past three years. On March 7, 1997 and September 17, 1998, the Company announced
share repurchase programs under which the Company may repurchase up to 1,500,000
shares of its stock from time to time in the open  market or  through  privately
negotiated  transactions at market prices. The stock repurchase plans have three
year terms. During 1997, the Company repurchased 313,000 shares of its stock for
a total of $2,280,375.  In the first nine months of 1998, the Company  purchased
507,350  shares of its stock for a total of  $2,249,173.  The Company may in the
future  issue debt  securities  or  preferred  stock or enter into loan or other
agreements  that  restrict  the payment of dividends  on and  repurchase  of the
Company's capital stock.

Historically,  the Company has maintained a substantial  amount of liquidity for
purposes of meeting regulatory  requirements and potential business demands.  At
September  30, 1998 the Company had $7.6  million of cash and cash  equivalents.
Management  believes  the  Company's  cash  resources,  plus  cash  provided  by
operations,  are  sufficient  to meet  the  Company's  foreseeable  capital  and
liquidity  requirements.  As a result  of the  holding  company  structure,  the
Company's  cash flows will depend  primarily on  dividends or other  permissible
payments from its subsidiaries.  The Company has no standby  lines-of-credit  or
other similar arrangements.

LFD,  as  a  registered  broker-dealer,   had  federal  and  state  net  capital
requirements at September 30, 1998 of $25,000.  The aggregate net capital of LFD
was $0.3  million at  September  30,1998.  LMC,  MSR,  and MSRI,  as  registered
investment  advisors,  must meet net capital requirements imposed at the Federal
and state levels.

Stockholders'  equity on September 30, 1998 decreased to $8.7 million from $10.1
million at  December  31,  1997  primarily  as a result of the  purchase of $2.2
million of treasury shares offset partially by the Company's $0.5 million in net
income and amortization of $0.5 million of deferred compensation.

Management  believes that the Company's  liquid assets and its net cash provided
by operations will enable it to meet any foreseeable cash requirements.

Forward Looking Statements

Some of the statements included within Management's  Discussion and Analysis may
be  considered  to be forward  looking  statements  which are subject to certain
risks and uncertainties.  Factors which could cause the actual results to differ
materially  from those  suggested by such  statements are described from time to
time in the  Company's  Annual  Report on Form 10-K and other  filings  with the
Securities and Exchange Commission.



Part II.  Other Information

Item 1.  Legal Proceedings

     None

Item 5.  Other Information

During the third quarter of 1998, the Company received verbal  notification that
its advisory  relationship with one of its larger accounts will be terminated in
the fourth  quarter of 1998.  Assets under  management in this account amount to
approximately $332 million as of September 30, 1998 and annualized revenues from
this account are approximately $1.3 million.


Item 6. Exhibits and Reports on Form 8-K

   (a)      List of Exhibits
No.  27  Financial  Data  Schedule  (filed  with  the  Securities  and  Exchange
Commission)

Other Items under Part II have been  omitted  since they are either not required
or are not applicable.


                                   SIGNATURES

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

LEXINGTON GLOBAL ASSET MANAGERS, INC.

By: /s/Richard M. Hisey
_____________________________
RICHARD M. HISEY
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER

Date: 11-16-98