SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                  For the Quarterly Period Ended June 30, 2004


                         Commission File Number 0-25056
                                                -------

                           MAXCOR FINANCIAL GROUP INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Delaware                                         59-3262958
  -------------------------------                          ----------------
  (State or other jurisdiction of                          (I.R.S. Employer
   incorporation or organization)                       Identification Number)


                         One Seaport Plaza - 19th Floor
                            New York, New York 10038
                     ---------------------------------------
                     (Address of principal executive office)

                                 (646) 346-7000
                           ----------------------------
                             (Registrant's telephone
                           number, including area code)


                  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 [ ]

                  Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

                  Yes [ ]                            No [X]

                  The number of shares of common stock, par value $.001 per
share, of the registrant outstanding as of August 12, 2004 was 6,980,542.

                        The Exhibit Index is on Page 32.

                               Page 1 of 35 Pages
<PAGE>

                           MAXCOR FINANCIAL GROUP INC.

                                      INDEX
                                      -----

                                                                            Page
                                                                            ----

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited):                                     3

         Consolidated Statements of Financial Condition                       4

         Consolidated Statements of Operations                                5

         Consolidated Statements of Changes in Stockholders' Equity           6

         Consolidated Statements of Cash Flows                                7

         Notes to the Consolidated Financial Statements                       9

Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations                                17

Item 3. Quantitative and Qualitative Disclosures about Market Risk           26

Item 4. Controls and Procedures                                              26


                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings                                                    28

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases
          of Equity Securities                                               28

Item 4. Submission of Matters to a Vote of Security Holders                  29

Item 6. Exhibits and Reports on Form 8-K                                     30

Signatures                                                                   31

Exhibit Index                                                                32

                               Page 2 of 35 Pages
<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)




                           MAXCOR FINANCIAL GROUP INC.
                           ---------------------------
                        CONSOLIDATED FINANCIAL STATEMENTS
                        ---------------------------------
                                  JUNE 30, 2004
                                  -------------
                                   (Unaudited)



                               Page 3 of 35 Pages

<PAGE>

                           MAXCOR FINANCIAL GROUP INC.
                           ---------------------------
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>
ASSETS                                                                  June 30, 2004      December 31, 2003
------                                                                -----------------    -----------------
<S>                                                                   <C>                  <C>
Cash and cash equivalents                                             $      51,178,736    $      67,170,247
Securities purchased under agreements to resell                             400,379,974        1,446,677,977
Deposits with clearing organizations                                         10,875,214            8,848,729
Receivable from broker-dealers and customers                                 26,733,860           22,324,106
Securities failed-to-deliver                                                 23,448,898           90,669,388
Securities owned                                                             80,753,537            6,687,124
Prepaid expenses and other assets                                             7,725,175            7,003,794
Deferred tax asset                                                              706,633              734,408
Fixed assets                                                                 12,219,739           13,010,863
                                                                      -----------------    -----------------

Total assets                                                          $     614,021,766    $   1,663,126,636
                                                                      =================    =================

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Liabilities:
   Short-term bank loan                                               $         900,000    $
   Securities sold under agreements to repurchase                           379,035,846        1,470,461,908
   Payable to broker-dealers and customers                                   13,417,973
   Securities failed-to-receive                                              15,816,460           66,544,835
   Securities sold, not yet purchased                                        80,117,168               22,428
   Accounts payable and accrued liabilities                                  22,568,623           21,137,048
   Accrued compensation payable                                              29,592,709           30,198,757
   Income taxes payable                                                       1,331,308            1,469,456
   Deferred taxes payable                                                     4,664,266            5,043,758
   Obligations under capitalized leases                                         339,528              703,944
   Revolving credit facility                                                  5,000,000            7,500,000
                                                                      -----------------    -----------------
                                                                            552,783,881        1,603,082,134
                                                                      -----------------    -----------------

Commitments and contingencies
Stockholders' equity:
   Preferred stock, $.001 par value, 1,000,000 shares authorized;
      none issued at June 30, 2004 and December 31, 2003
   Common stock, $.001 par value, 30,000,000 shares authorized;
      12,861,626 and 12,794,626 shares issued at June 30, 2004 and
      December 31, 2003, respectively                                            12,862               12,795
   Additional paid-in capital                                                39,022,575           38,718,445
   Treasury stock at cost; 5,821,871 and 5,655,903 shares of
      common stock held at June 30, 2004 and
      December 31, 2003, respectively                                (       18,597,785)  (       16,771,571)
   Retained earnings                                                         38,899,903           36,178,583
   Accumulated other comprehensive income:
      Foreign currency translation adjustments                                1,900,330            1,906,250
                                                                      -----------------    -----------------
      Total stockholders' equity                                             61,237,885           60,044,502
                                                                      -----------------    -----------------

   Total liabilities and stockholders' equity                         $     614,021,766    $   1,663,126,636
                                                                      =================    =================
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                               Page 4 of 35 Pages
<PAGE>

                           MAXCOR FINANCIAL GROUP INC.
                           ---------------------------
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                  For the Three Months Ended         For the Six Months Ended
                                                ------------------------------    ------------------------------
                                                June 30, 2004    June 30, 2003    June 30, 2004    June 30, 2003
                                                -------------    -------------    -------------    -------------
<S>                                             <C>              <C>              <C>              <C>
Revenues:
  Commission income                             $  47,511,109    $  48,132,375    $  95,561,410    $  89,281,729
  Interest income                                   3,007,644          675,099        4,934,612        1,314,816
  Principal transactions, net                         980,985        3,824,419        4,481,495   (      257,332)
  Other                                        (      256,833)  (      157,199)  (      632,449)  (      476,677)
                                                -------------    -------------    -------------    -------------
Gross revenues                                     51,242,905       52,474,694      104,345,068       89,862,536

Interest expense on securities indebtedness         2,765,527          260,048        4,460,806          305,149
                                                -------------    -------------    -------------    -------------
Net revenues                                       48,477,378       52,214,646       99,884,262       89,557,387
                                                -------------    -------------    -------------    -------------

Expenses:
   Compensation and related costs                  33,689,372       32,264,562       67,664,377       62,071,713
   Communication costs                              3,501,069        3,051,596        6,874,494        6,178,583
   Travel and entertainment                         2,674,013        2,357,077        5,448,996        4,268,974
   Occupancy and equipment rental                   1,820,313        1,810,596        4,392,232        3,032,920
   Charity Day contributions                        1,042,864          982,300        1,042,864          982,300
   Clearing and execution fees                      1,016,676          952,153        2,029,030        1,821,624
   Depreciation and amortization                      815,434          814,411        1,624,577        1,580,146
   Other interest expense                              31,417          196,025           84,666          232,499
   General, administrative and other expenses       2,077,360        2,060,828        3,982,164        3,743,554
                                                -------------    -------------    -------------    -------------
                                                   46,668,518       44,489,548       93,143,400       83,912,313
                                                -------------    -------------    -------------    -------------
Income before provision for income taxes,
    minority interest and extraordinary item        1,808,860        7,725,098        6,740,862        5,645,074

Provision for income taxes                            802,544        3,181,024        3,129,106        2,101,105
                                                -------------    -------------    -------------    -------------

Income before minority interest and
    extraordinary item                              1,006,316        4,544,074        3,611,756        3,543,969

Minority interest in income of consolidated
    subsidiary                                                                                    (      175,985)
                                                -------------    -------------    -------------    -------------

Income before extraordinary item                    1,006,316        4,544,074        3,611,756        3,367,984

Extraordinary gain on purchase of minority
    interest                                                                                           2,957,547
                                                -------------    -------------    -------------    -------------

Net income                                      $   1,006,316    $   4,544,074    $   3,611,756    $   6,325,531
                                                =============    =============    =============    =============

Basic earnings per share:
   Income before extraordinary item             $         .14    $         .66    $         .51    $         .48
   Extraordinary gain on purchase of minority
      interest                                                                                               .42
                                                -------------    -------------    -------------    -------------
   Net income                                   $         .14    $         .66    $         .51    $         .90
                                                =============    =============    =============    =============

Diluted earnings per share:
   Income before extraordinary item             $         .13    $         .56    $         .45    $         .42
   Extraordinary gain on purchase of minority
     interest                                                                                                .36
                                                -------------    -------------    -------------    -------------
   Net income                                   $         .13    $         .56    $         .45    $         .78
                                                =============    =============    =============    =============

Cash dividends per share of common stock        $       .0625    $           0    $        .125    $           0
                                                =============    =============    =============    =============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                               Page 5 of 35 Pages
<PAGE>

                           MAXCOR FINANCIAL GROUP INC.
                           ---------------------------
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
           ----------------------------------------------------------
            FOR THE PERIODS ENDED DECEMBER 31, 2003 AND JUNE 30, 2004
            ---------------------------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                       Accumulated
                                                         Additional                                      Other
                        Comprehensive      Common         Paid-in       Treasury         Retained     Comprehensive
                           Income          Stock          Capital        Stock           Earnings        Income           Total
                        -------------   -------------  -------------  -------------   -------------   -------------   -------------
<S>                     <C>             <C>            <C>           <C>              <C>             <C>             <C>
Balance at
  December 31, 2002                     $      12,233  $  36,517,908 ( $ 11,208,967)  $  20,741,779   $   1,530,133   $  47,593,086
Comprehensive income
  Net income for the
    year ended
    December 31, 2003   $  16,314,792                                                    16,314,792                      16,314,792
  Foreign currency
    translation
    adjustment
    (inclusive of
    income tax benefit
    of $2,712)                376,117                                                                       376,117         376,117
                        -------------
Comprehensive income    $  16,690,909
                        =============
Exercise of stock
  options, including
  tax benefit of
  $763,293                                        562      2,200,537 (      826,303)                                      1,374,796
Acquisition of
  treasury stock                                                     (    4,736,301)                                 (    4,736,301)
Common stock dividends                                                               (      877,988)                 (      877,988)
                                        -------------  -------------  -------------   -------------   -------------   -------------

Balance at
  December 31, 2003                            12,795     38,718,445 (   16,771,571)     36,178,583       1,906,250      60,044,502
Comprehensive income
  Net income for the
    six months ended
    June 30, 2004       $   3,611,756                                                     3,611,756                       3,611,756
  Foreign currency
    translation
    adjustment
    (inclusive of
    income tax benefit
    of $125,307)       (        5,920)                                                               (        5,920) (        5,920)
                        -------------
Comprehensive income    $   3,605,836
                        =============
Exercise of stock
  options, including
  tax benefit of
  $71,454                                          67        304,130                                                        304,197
Acquisition of
  treasury stock                                                     (    1,826,214)                                 (    1,826,214)
Common stock dividends                                                               (      890,436)                 (      890,436)
                                        -------------  -------------  -------------   -------------   -------------   -------------
Balance at
  June 30, 2004                         $      12,862  $  39,022,575 ( $ 18,597,785)  $  38,899,903   $   1,900,330   $  61,237,885
                                        =============  =============  =============   =============   =============   =============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                               Page 6 of 35 Pages
<PAGE>

                           MAXCOR FINANCIAL GROUP INC.
                           ---------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                            For the Six Months Ended
                                                                       ----------------------------------
                                                                        June 30, 2004      June 30, 2003
                                                                       ---------------    ---------------
<S>                                                                    <C>                <C>
Cash flows from operating activities:
      Net income                                                       $     3,611,756    $     6,325,531
      Adjustments to reconcile net income to net cash (used in)
         provided by operating activities:
         Depreciation and amortization                                       1,624,577          1,580,146
         Gain on disposal of fixed assets                             (         36,025)
         Provision for doubtful accounts                                        23,197   (         73,841)
         Gain on purchase of minority interest                                           (      2,957,547)
         Minority interest in net earnings of consolidated
           subsidiaries                                                                           175,985
         Unreimbursed losses of contractual arrangements                       294,966            829,462
         Deferred income taxes                                        (        348,020)  (        194,707)
      Change in assets and liabilities:
         Decrease (increase) in securities purchased under
           agreements to resell                                          1,046,298,003   (    259,312,500)
         (Increase) decrease in deposits with clearing organizations  (      2,026,485)               296
         Increase in receivable from broker-dealers and customers     (      4,347,533)  (     11,855,269)
         Decrease (increase) in securities failed-to-deliver                67,220,490   (     40,839,865)
         (Increase) decrease in securities owned                      (     74,064,884)         2,594,631
         Increase in prepaid expenses and other assets                (        659,928)  (      1,036,844)
         Increase in short-term bank loan                                      900,000          5,511,000
         (Decrease) increase in securities sold under agreements to
           repurchase                                                 (  1,091,426,062)       260,108,438
         Increase (decrease) in payable to broker-dealers and
           customers                                                        13,417,973   (      6,531,377)
         (Decrease) increase in securities failed-to-receive          (     50,728,375)        34,741,195
         Increase in securities sold, not yet purchased                     80,094,740          2,278,069
         Increase in accounts payable and accrued liabilities                1,058,367          8,072,139
         (Decrease) increase in accrued compensation payable          (        873,462)         3,101,896
         (Decrease) increase in income taxes payable                  (         93,920)         1,408,217
                                                                       ---------------    ---------------
               Net cash (used in) provided by operating activities    (     10,060,625)         3,925,055
                                                                       ---------------    ---------------

Cash flows from investing activities:
      Purchase of fixed assets                                        (      1,063,885)  (      8,190,393)
      Purchase of minority interest                                                      (      2,613,156)
                                                                       ---------------    ---------------
               Net cash used in investing activities                  (      1,063,885)  (     10,803,549)
                                                                       ---------------    ---------------
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                               Page 7 of 35 Pages
<PAGE>

                           MAXCOR FINANCIAL GROUP INC.
                           ---------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                             (Unaudited) (Continued)

<TABLE>
<CAPTION>
                                                                       For the Six Months Ended
                                                                    ------------------------------
                                                                    June 30, 2004    June 30, 2003
                                                                    -------------    -------------
<S>                                                                 <C>              <C>
Cash flows from financing activities:
     Proceeds from exercise of options                                    232,743          150,025
     Payment of obligations under capitalized leases               (       79,387)  (       89,610)
     Repayments (borrowings) under revolving credit facility, net  (    2,500,000)      12,000,000
     Common stock dividends                                        (      890,436)
     Proceeds from asset sales under sales-leaseback transactions                        5,220,658
     Acquisition of treasury stock                                 (    1,826,214)  (    4,736,301)
                                                                    -------------    -------------
           Net cash (used in) provided by financing activities     (    5,063,294)      12,544,772
                                                                    -------------    -------------

Effect of exchange rate changes on cash                                   196,293          349,573
                                                                    -------------    -------------

Net (decrease) increase in cash and cash equivalents               (   15,991,511)       6,015,851

Cash and cash equivalents at beginning of period                       67,170,247       52,781,616
                                                                    -------------    -------------

Cash and cash equivalents at end of period                          $  51,178,736    $  58,797,467
                                                                    =============    =============

Supplemental disclosures of cash flow information:

Interest paid                                                       $   4,245,803    $     529,729
Income taxes paid                                                       3,536,254          933,487
Non-cash financing activities:
     Income tax benefit on option exercises                                71,454           22,236
     Capital lease obligations cancelled                                  298,924
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                               Page 8 of 35 Pages
<PAGE>

                           MAXCOR FINANCIAL GROUP INC.
                           ---------------------------
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION:
-----------------------------------------------

Maxcor Financial Group Inc. ("MFGI") is a publicly-held financial services
holding company that was incorporated in Delaware in 1994. In August 1996, MFGI
acquired Euro Brokers Investment Corporation ("EBIC"), a privately held
international and domestic inter-dealer broker.

EBIC, incorporated in December 1986 in connection with a management buyout of
predecessor operations dating to 1970, through its subsidiaries and businesses
is primarily an inter-dealer broker of money market instruments, derivative
products and selected securities, with principal offices in New York, London and
Tokyo, other offices in Stamford (CT), Switzerland and Mexico, as well as
correspondent relationships with other brokers throughout the world. Maxcor
Financial Inc. ("MFI"), a U.S. registered broker-dealer subsidiary, also
conducts institutional sales and trading operations in various fixed income and
equity securities and institutional securities financing operations.

The consolidated financial statements include the accounts of MFGI and its
majority-owned subsidiaries and other entities over which it exercises control
(collectively, the "Company"). All significant intercompany balances and
transactions have been eliminated.

The accompanying unaudited consolidated financial statements of the Company have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair statement have
been included. Certain reclassifications have been made to previously reported
balances on the Statement of Operations to conform with the current
presentation. Operating results for the interim periods ended June 30, 2004 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2004. For further information, refer to the audited
consolidated financial statements of the Company included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2003 ("2003 Form
10-K").

                               Page 9 of 35 Pages
<PAGE>

NOTE 2 - EARNINGS PER SHARE:
---------------------------

The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share computations for the three and six month
periods respectively ended June 30, 2004 and June 30, 2003:

<TABLE>
<CAPTION>
                                                      Three Months Ended               Six Months Ended
                                                -----------------------------   -----------------------------
                                                June 30, 2004   June 30, 2003   June 30, 2004   June 30, 2003
                                                -------------   -------------   -------------   -------------
<S>                                             <C>             <C>             <C>             <C>
Income before extraordinary item                $   1,006,316   $   4,544,074   $   3,611,756   $   3,367,984
Extraordinary gain on purchase of minority
   interest                                                                                         2,957,547
                                                -------------   -------------   -------------   -------------
Net income                                          1,006,316       4,544,074       3,611,756       6,325,531

Weighted average common shares outstanding -
   basic calculations                               7,113,784       6,875,169       7,133,883       7,002,373
Dilutive effect of stock options and warrants         762,572       1,171,625         851,710       1,091,109
                                                -------------   -------------   -------------   -------------
Weighted average common shares outstanding -
   diluted calculations                             7,876,356       8,046,794       7,985,593       8,093,482
Basic earnings per share:
   Income before extraordinary item             $         .14   $         .66   $         .51   $         .48
   Extraordinary gain on purchase of minority
     interest                                                                                             .42
                                                -------------   -------------   -------------   -------------
   Net income                                   $         .14   $         .66   $         .51   $         .90
                                                =============   =============   =============   =============

Diluted earnings per share:
   Income before extraordinary item             $         .13   $         .56   $         .45   $         .42
   Extraordinary gain on purchase of minority
     interest                                                                                             .36
                                                -------------   -------------   -------------   -------------
   Net income                                   $         .13   $         .56   $         .45   $         .78
                                                =============   =============   =============   =============

Antidilutive common stock equivalents:
   Options                                            130,000                          60,000
   Warrants
</TABLE>

NOTE 3 - REPURCHASE AND REVERSE REPURCHASE AGREEMENTS:
-----------------------------------------------------

Transactions involving the purchase of U.S. Treasury and federal agency
securities under agreements to resell (reverse repurchase agreements) and the
sale of U.S. Treasury and federal agency securities under agreements to
repurchase (repurchase agreements) are treated as collateralized financings and
recorded at contracted amounts, plus accrued interest. These amounts are
presented on a net-by-counterparty basis when the requirements of Financial
Accounting Standards Board (FASB) Interpretation No. 41 are satisfied. Income
and expense on these agreements are recognized as interest over the life of the
transaction.

The Company monitors the fair value of the securities purchased and sold under
these agreements daily and obtains additional collateral or returns excess
collateral when appropriate. Securities received as collateral for reverse
repurchase agreements are used to secure repurchase agreements. As of June 30,
2004, the fair value of securities received as collateral under reverse
repurchase agreements of $525.5 million was repledged under repurchase
agreements.

                              Page 10 of 35 Pages
<PAGE>

NOTE 4 - STOCKHOLDERS' EQUITY:
-----------------------------

Preferred stock:
---------------

Pursuant to the Company's adoption of a shareholder rights plan (the "Plan") in
December 1996, the Company authorized the creation of Series A Junior
Participating Preferred Stock and reserved 300,000 shares thereof for issuance
upon exercise of the rights that, pursuant to the Plan, were at the time
dividended to holders of common stock.

Common stock, options and warrants:
----------------------------------

At December 31, 2003, the Company had 7,138,723 shares of common stock
outstanding and held 5,655,903 shares in treasury.

During the six months ended June 30, 2004 the Company repurchased 165,968 shares
under its existing share repurchase program for an aggregate purchase price of
$1,826,214. This program was authorized by the Board of Directors in July 2001
and was expanded in September 2001 and again in April 2003. As of June 30, 2004,
the remaining authorization under this expanded program was 528,225 shares. In
July 2004, the Company's Board of Directors authorized a further expansion of
the program by an additional 500,000 shares. In addition, during the six months
ended June 30, 2004, the Company issued 67,000 shares pursuant to options
exercised under the Company's 1996 Stock Option Plan and 2002 Stock Option Plan.

As a result of the activities described in the preceding paragraph, at June 30,
2004, the Company had 7,039,755 shares of common stock outstanding and held
5,821,871 shares in treasury.

In January 2004, the Company cancelled all 425,000 warrants issued and
outstanding under a warrant program established to provide employee inducements
and incentives in connection with the formation of a leveraged finance
department. The warrants had been issued in April 2002 at an exercise price of
$5.875 per warrant, with vesting over four years at the rate of 50% on the
second anniversary of the grant date and 25% on each of the third and fourth
anniversaries.

The Company has elected to continue to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting for
its option and warrant plans. Accordingly, the Company has not recognized any
compensation cost associated with these instruments since the market prices of
the underlying stock on the option and warrant grant dates were not greater than
the option exercise prices. As required by Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure-an Amendment of FASB Statement No. 123," the Company has disclosed
below its estimated pro forma net income and earnings per share if compensation
for awards issued under its option and warrant plans had been recognized using
the fair value method of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," with such fair value estimated using
the Black-Scholes option pricing model. The pro forma benefit for stock-based
compensation during the six months ended June 30, 2004 includes the reversal of
the aggregate pro forma expense of $444,153 previously determined for prior
periods for the cancelled leveraged finance warrants.

                              Page 11 of 35 Pages
<PAGE>

NOTE 4 - STOCKHOLDERS' EQUITY (Continued):
-----------------------------------------
<TABLE>
<CAPTION>
                                                       Three Months Ended                 Six Months Ended
                                                 ------------------------------    -----------------------------
                                                 June 30, 2004    June 30, 2003    June 30, 2004   June 30, 2003
                                                 -------------    -------------    -------------   -------------
<S>                                              <C>              <C>              <C>             <C>
Net income, as reported                          $   1,006,316    $   4,544,074    $   3,611,756   $   6,325,531

Deduct: Total stock-based compensation (expense)
   benefit determined under fair value based
   method for all awards, net of
   related tax effects                          (      174,891)  (      187,038)          37,625  (      357,143)
                                                 -------------    -------------    -------------   -------------

 Pro forma net income                            $     831,425    $   4,357,036    $   3,649,381   $   5,968,388
                                                 =============    =============    =============   =============



                                                       Three Months Ended                 Six Months Ended
                                                 ------------------------------    -----------------------------
                                                 June 30, 2004    June 30, 2003    June 30, 2004   June 30, 2003
                                                 -------------    -------------    -------------   -------------
Earnings per share:
   Basic, as reported                            $         .14    $         .66    $         .51   $         .90
   Basic, pro forma                              $         .12    $         .63    $         .51   $         .85

   Diluted, as reported                          $         .13    $         .56    $         .45   $         .78
   Diluted, pro forma                            $         .11    $         .54    $         .46   $         .74
</TABLE>

Dividends:
---------

During the six months ended June 30, 2004, the Company declared and paid two
quarterly common stock dividends, each at the rate of $.0625 per share ($.25 per
share on an annualized basis), for aggregate payments of $890,436.

NOTE 5 - NTL WHEN-ISSUED EQUITY TRADES:
--------------------------------------

On January 10, 2003, NTL Inc. ("NTL") emerged from Chapter 11 bankruptcy under
an amended plan of reorganization providing for the issuance of 50 million
shares of common stock. MFI and other participants in the when-issued trading
market for NTL shares, which began in September 2002 after confirmation of NTL's
prior plan of reorganization that contemplated the issuance of 200 million
shares, expected the settlement of their when-issued trades would be adjusted to
reflect the equivalent of a one-for-four reverse stock split. A number of buyers
of NTL when-issued shares, seizing upon a Nasdaq advisory issued on January 14,
2003 that Nasdaq would neither cancel nor adjust such trades, either have
retained the full, unadjusted number of shares delivered to them as a result of
certain automated settlement processes or are demanding compensation for the
remaining unadjusted number of shares not delivered to them if settlement was
made on an adjusted basis.

In February 2003, MFI filed a suit in the New York State Supreme Court (the
"Court"), naming all of its counterparties to its NTL when-issued trades, in
order to seek a uniform, adjusted settlement of these trades. Similar
proceedings, some seeking settlement on an adjusted basis, others on an
unadjusted basis, have been commenced by other parties to NTL when-issued trades
against their counterparties, including MFI, both in the Court and before NASD.

                              Page 12 of 35 Pages
<PAGE>

NOTE 5 - NTL WHEN-ISSUED EQUITY TRADES (Continued):
--------------------------------------------------

Included in principal transactions for the six months ended June 30, 2003 is a
loss of $5.1 million recorded on the settlement of MFI's NTL when-issued trades.
This loss includes the estimated damages payable if the above proceedings
conclude that all of MFI's NTL when-issued trades, other than permanently
adjusted settlements by mutual agreement, should have settled on an unadjusted
basis, and is net of a partially offsetting $800,000 principal transaction gain
recorded on NTL shares determined no longer to constitute a hedge against such
an outcome.

In March 2004, the Court granted a summary judgment motion made by MFI and
issued a decision stating that all NTL when-issued trades among the parties
before the Court should be settled on an adjusted and uniform basis. Following
this decision, MFI in March 2004 reached a permanent settlement of this dispute
with its one NTL counterparty who had brought a claim before NASD, resulting in
the reversal of $625,000 of the $5.1 million net loss recorded by MFI during
2003. This reversal, recorded in March 2004, is included as a gain in principal
transactions for the six months ended June 30, 2004. As a result of this
settlement, MFI's dispute with its remaining NTL counterparties is now fully
centralized in only one forum (the Court).

In July 2004, MFI obtained a judgment from the Court entitling MFI to collect a
total of $3.6 million (inclusive of interest) from those counterparties that
received and retained unadjusted deliveries of NTL shares from MFI. The
judgment, which is still subject to collection, implements an order of the
Court, entered earlier in July, that gave effect to the Court's March 2004
summary judgment decision. The judgment, together with a $2.9 million accrual
MFI has remaining on its books to cover damages potentially payable in the event
that the Court's decision is reversed, means that MFI may be able to record up
to a $6.5 million pre-tax gain in the future if the current outcome is upheld.
However, four of MFI's counterparties have already filed notices of appeal and,
accordingly, MFI only intends to record gains from the judgment, and to reverse
portions of the accrual, if and to the extent it achieves permanent resolutions,
whether by mutual consent, completion of the appeals process or otherwise, with
any one or more of its remaining counterparties. Moreover, it is likely that the
costs associated with the appellate process and any such other resolutions are
likely to offset a portion of this $6.5 million amount.

General, administrative and other expenses include the following legal fees
related to this matter during the three and six-month periods respectively ended
June 30, 2004 and June 30, 2003:

                Three Months Ended                      Six Months Ended
          -------------------------------       -------------------------------
          June 30, 2004     June 30, 2003       June 30, 2004     June 30, 2003
          -------------     -------------       -------------     -------------
          $      70,000     $     300,000       $     188,000     $    500,000


                              Page 13 of 35 Pages

<PAGE>

NOTE 6 - TOKYO BASED VENTURE:
----------------------------

Since 1994, the Company has held an interest in a Tokyo-based derivatives
brokering venture (the "Tokyo Venture") structured under Japanese law as a
Tokumei Kumiai ("TK"). A TK is a contractual arrangement in which an investor
invests in a business of a TK operator by making a capital contribution to the
TK operator and, in return, becomes entitled to a specified percentage of the
profits of the business while also becoming obligated to fund a specified
percentage of the losses of the business. The Company has a 57.25% interest in
the Tokyo Venture, with Nittan Capital Group Limited ("Nittan"), the TK
operator, holding a 42.75% interest. Although the operations of the Tokyo
Venture have always been run and managed by persons appointed by the Company, it
does not operate in a legal entity separately distinguishable from Nittan, which
has other substantial operations, and, accordingly, the Company accounts for its
share of the results of operations of the Tokyo Venture in other income as
non-equity income or loss from contractual arrangement.

Summarized operating results of the Tokyo Venture for the three and six month
periods respectively ended June 30, 2004 and June 30, 2003, along with the
Company's share of those results, are presented below:

<TABLE>
<CAPTION>
                            Three Months Ended                 Six Months Ended
                      ------------------------------    ------------------------------
                      June 30, 2004    June 30, 2003    June 30, 2004    June 30, 2003
                      -------------    -------------    -------------    -------------
<S>                   <C>              <C>              <C>              <C>
Revenues              $   1,141,839    $   1,657,338    $   2,216,804    $   3,323,797
Expenses                  1,657,064        2,181,555        3,288,468        4,772,639
                      -------------    -------------    -------------    -------------
Loss                 ($     515,225)  ($     524,217)  ($   1,071,664)  ($   1,448,842)
                      =============    =============    =============    =============

Company's share      ($     294,966)  ($     300,114)  ($     613,528)  ($     829,462)
                      =============    =============    =============    =============
</TABLE>


NOTE 7 - NET CAPITAL REQUIREMENTS:
---------------------------------

MFI, as a U.S. broker-dealer, is subject to the Uniform Net Capital Rule (rule
15c3-1) of the Securities and Exchange Commission ("SEC"), which requires the
maintenance of minimum regulatory net capital. MFI has elected to use the
alternative method, as permitted by the rule, which requires that MFI maintain
minimum regulatory net capital, as defined, equal to the greater of $250,000 or
2% of aggregate debit items arising from customer transactions, as defined; or
4% of the funds required to be segregated pursuant to the Commodity Exchange Act
and regulations thereunder. MFI's membership in the Government Securities
Division of the Fixed Income Clearing Corporation ("GSD-FICC") requires it to
maintain minimum excess regulatory net capital of $10,000,000 and minimum net
worth of $25 million. At June 30, 2004, MFI had regulatory net capital of $41.9
million, a regulatory net capital requirement of $250,000 and net worth of $55.0
million. Euro Brokers Ltd. ("EBL"), a U.K. brokerage subsidiary of the Company,
is a Type D registered firm

                              Page 14 of 35 Pages
<PAGE>

of the Financial Services Authority ("FSA"), required to maintain a financial
resources requirement generally equal to six weeks' average expenditures plus
the amount of less liquid assets on hand. At June 30, 2004, EBL had financial
resources in accordance with FSA's rules of (pound)4.5 million ($8.2 million)
and a financial resources requirement of (pound)3.5 million ($6.3 million).

NOTE 8 - SEGMENT REPORTING:
--------------------------

In accordance with the requirements for interim period reporting under Statement
of Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS 131"), the Company is reporting the
operating revenues (commission income, principal transactions and information
sales revenue) and net income (loss) attributable to its operating segments. The
Company has defined its operating segments based upon geographic location.
Although all segments are engaged in the brokerage business, they are managed
separately to reflect their unique market, employment and regulatory
environments. The reportable segments for the three and six-month periods
respectively ended June 30, 2004 and June 30, 2003 as defined by SFAS 131
consist of the United States, United Kingdom, Japan and Switzerland. United
States amounts are principally derived from the Company's New York office, but
include all U.S. based operations, with operating revenues and net income for
the six months ended June 30, 2003 reflecting the net loss of $5.1 million
recorded on NTL when-issued equity trades (see Note 5). The net income for the
United Kingdom segment for the six months ended June 30, 2003 reflects the $3.0
million extraordinary gain realized on the February 2003 purchase of the
minority interest in EBL and includes the results for EBL, for periods prior to
the purchase, net of such minority interest. Japan amounts primarily reflect the
non-equity losses from contractual arrangement (Tokyo Venture). See Note 6 for
additional disclosure of the revenues and expenses of the Tokyo Venture. Other
geographic segments which did not meet the SFAS 131 materiality thresholds for
the year ended December 31, 2003 and which are not expected to meet these
thresholds for the year ended December 31, 2004 have been included in "All
Other."

<TABLE>
<CAPTION>
                        United States    United Kingdom         Japan          Switzerland       All Other          Total
                        --------------   --------------     --------------    --------------   --------------   --------------
<S>                     <C>              <C>                <C>               <C>              <C>              <C>
Three months ended
   June 30, 2004

Operating revenues      $   27,150,546   $   19,290,795     $                 $    1,177,803   $      872,950   $   48,492,094
Net income (loss)               57,992          773,306    (       294,966)          434,552           35,432        1,006,316
Assets                     597,506,305       34,658,261            178,270         5,507,396        2,006,477      639,856,709

Three months ended
   June 30, 2003

Operating revenues      $   31,753,831   $   18,894,134     $                 $      424,016   $    1,009,813   $   52,081,794
Net income (loss)            2,696,203        1,862,567    (       268,623)          215,562           38,365        4,544,074
Assets                     426,649,335       31,772,409            167,894         2,423,155        2,198,753      463,211,546

Six months ended
   June 30, 2004

Operating revenues      $   54,941,505   $   40,532,979     $                 $    2,570,059   $    1,998,362   $  100,042,905
Net income (loss)            1,527,334        1,528,840    (       613,527)          986,670          182,439        3,611,756

Six months ended
   June 30, 2003

Operating revenues      $   50,907,347   $   35,686,303     $                 $      778,830   $    1,901,917   $   89,274,397
Net income (loss)              666,999        6,003,833    (       813,935)          354,469          114,165        6,325,531
</TABLE>

                               Page 15 of 35 Pages
<PAGE>

NOTE 8 - SEGMENT REPORTING (Continued):
--------------------------------------

Included below are reconciliations of reportable segment assets to the Company's
consolidated totals as reported in the Consolidated Statements of Financial
Condition in this report and in the Company's Form 10-Q for the quarterly period
ended June 30, 2003.

                                                          As of June 30,
                                                 ------------------------------
                                                     2004             2003
                                                 -------------    -------------
Total for reportable segments                    $ 637,850,232    $ 461,012,793
Other assets                                         2,006,477        2,198,753
Elimination of intersegment receivables         (   12,738,959)  (    7,585,347)
Elimination of investments in other segments    (   13,095,984)  (   13,095,984)
                                                 -------------    -------------
                                                 $ 614,021,766    $ 442,530,215
                                                 =============    =============

                              Page 16 of 35 Pages
<PAGE>

References in this report to "we," "us" and "our" mean Maxcor Financial Group
Inc. and its subsidiaries and other businesses, unless the context requires
otherwise.

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

                          Critical Accounting Policies

The following is a discussion of certain of our significant accounting policies
(see Note 2 to the Consolidated Financial Statements for the fiscal year ended
December 31, 2003 in the 2003 Form 10-K) that we consider to be of particular
importance because they require difficult, complex or subjective judgments on
matters that are often inherently uncertain.

Securities positions are carried at fair values generally based on quoted market
prices. From time to time quoted market prices are not available for certain
municipal or other securities positions. For such securities, we, with the
assistance of independent pricing services, determine fair values by analyzing
securities with similar characteristics that have quoted market prices.
Consideration is given to the size of our individual positions relative to the
overall market activity in such positions when determining the impact our sale
would have on fair values. The assumptions used in valuing our securities
positions may be incorrect and the actual value realized upon disposition could
be different from the current carrying value.

Included in accounts payable and accrued liabilities are reserves for certain
contingencies to which we may have exposure, such as the employer portion of
National Insurance Contributions in the U.K., interest and claims on securities
settlement disputes, such as the NTL matter, and reserves for certain income tax
contingencies. The determination of the amounts of these reserves requires
significant judgment on our part. We consider many factors in determining the
amount of these reserves, such as legal precedent and case law and historic
experience. The assumptions used in determining the estimates of reserves may be
incorrect and the actual costs of resolution of these items could be greater or
less than the reserve amounts.


                        Three Months Ended June 30, 2004
                  Compared to Three Months Ended June 30, 2003

Commission income represents revenues generated on brokerage transactions
conducted on an agency (including name give-up) or matched riskless principal
basis. For the three months ended June 30, 2004, these revenues decreased
$621,266 to $47,511,109, compared to $48,132,375 for the comparable period in
2003, reflecting a decrease in New York, offset by increases in London and
Switzerland. In New York, the decrease primarily reflected a reduction in
riskless principal transactions from our restructured institutional corporate
bond sales and trading operations. The increases in London and Switzerland
primarily reflected growth in the inter-dealer brokerage and the institutional
businesses started in 2003 and exchange rate movements.

                              Page 17 of 35 Pages
<PAGE>

Interest income for the three months ended June 30, 2004 increased $2,332,545 to
$3,007,644, compared to $675,099 for the three months ended June 30, 2003,
primarily reflecting increased financing income earned on reverse repurchase
agreements in connection with the institutional securities financing operations
we started in 2003 and coupon and financing income associated with securities
positions taken by our restructured institutional corporate bond sales and
trading operations.

Principal transactions represent the net gains or losses generated from
securities transactions involving the assumption of market risk for a period of
time. For the three months ended June 30, 2004, these activities resulted in a
gain of $980,985, compared to a gain of $3,824,419 for the three months ended
June 30, 2003. This change primarily reflected a reduction in gains from our
restructured institutional corporate bond sales and trading group and the effect
of an $800,000 gain recorded in the prior period on NTL shares determined to no
longer constitute a hedge.

As discussed in Note 5 to the Consolidated Financial Statements included in this
report, the $800,000 gain recorded during the three months ended June 30, 2003
on the sale NTL shares offset in part a $5.9 million loss recorded during the
first quarter of 2003. The $5.9 million loss reflected the contingency that all
of MFI's NTL when-issued trades, other than permanently adjusted settlements by
mutual agreement, should have settled on an unadjusted basis. In March 2004, the
New York State Supreme Court granted a summary judgment motion made by MFI and
issued a decision stating that all NTL when-issued trades among the parties
before the Court should be settled on an adjusted and uniform basis. Following
this decision, MFI in March 2004 reached a permanent settlement of this dispute
with its one NTL counterparty who had brought a claim before NASD, resulting in
the reversal of $625,000 of the loss recorded by MFI during 2003. As a result of
this settlement, MFI's dispute with its remaining NTL counterparties is now
fully centralized in only one forum (New York State Supreme Court).

In July 2004, MFI obtained a judgment from the Court entitling MFI to collect a
total of $3.6 million (inclusive of interest) from those counterparties that
received and retained unadjusted deliveries of NTL shares from MFI. The
judgment, which is still subject to collection, implements an order of the
Court, entered earlier in July, that gave effect to the Court's March 2004
summary judgment decision. The judgment, together with a $2.9 million accrual
MFI has remaining on its books to cover damages potentially payable in the event
that the Court's decision is reversed, means that MFI may be able to record up
to a $6.5 million pre-tax gain in the future if the current outcome is upheld.
However, four of MFI's counterparties have already filed notices of appeal and,
accordingly, MFI only intends to record gains from the judgment, and to reverse
portions of the accrual, if and to the extent it achieves permanent resolutions,
whether by mutual consent, completion of the appeals process or otherwise, with
any one or more of its remaining counterparties. Moreover, it is likely that the
costs associated with the appellate process and any such other resolutions are
likely to offset a portion of this $6.5 million amount.

Other items for the three months ended June 30, 2004 resulted in a loss of
$256,833, as compared to a loss of $157,199 for the three months ended June 30,
2003. This increased loss resulted from the expiration of an information
licensing agreement in the second half of 2003, which generated $125,000 of
licensing income during the three months ended June 30, 2003, offset by an
increase in other gains. The losses for the three months ended June 30, 2004 and
2003 on our 57.25% interest in the Tokyo Venture were comparable at $294,966 and
$300,114, respectively.

                              Page 18 of 35 Pages
<PAGE>

For the three months ended June 30, 2004, interest expense on securities
indebtedness increased $2,505,479 to $2,765,527, compared to $260,048 for the
three months ended June 30, 2003, primarily as a result of interest expense
incurred on repurchase agreements in connection with our institutional
securities financing operations and coupon and financing expense on securities
positions taken by our restructured institutional corporate bond sales and
trading operations.

Compensation and related costs for the three months ended June 30, 2004
increased $1,424,810 to $33,689,372, compared to $32,264,562 for the three
months ended June 30, 2003, primarily as a result of increased brokerage staff
in connection with expansion efforts in New York, including in our restructured
institutional corporate bond sales and trading operations, increased revenues in
London and Switzerland from the growth of various departments started in 2003
(resulting in higher incentive-based compensation) and the effects of
translating strengthened foreign currency balances to U.S. dollars.

Communication costs for the three months ended June 30, 2004 increased $449,473
to $3,501,069, compared to $3,051,596 for the three months ended June 30, 2003,
primarily as a result of the currency effects of translating strengthened
British pound sterling amounts to U.S. dollars and the effect of a $250,000
reduction during the prior period to communication accruals in London that were
no longer considered necessary.

Travel and entertainment costs for the three months ended June 30, 2004
increased $316,936 to $2,674,013, compared to $2,357,077 for the three months
ended June 30, 2003, reflective in part of our various business expansion
efforts.

Occupancy and equipment rental represent expenses incurred in connection with
our office premises, including base rent and related escalations, maintenance,
electricity and real estate taxes, as well as rental costs for equipment under
operating leases. For the three months ended June 30, 2004 and 2003, these costs
were comparable at $1,820,313 and $1,810,596, respectively.

All the revenue generated on our Charity Days by our New York, Stamford, Mexico,
London and Switzerland offices are donated to designated charities. All
participating brokerage employees waive any entitlement to commissions from such
revenues. The proceeds of $1,042,864 raised on our April 19, 2004 Charity Day
are designated for The Euro Brokers Relief Fund, Inc. and the firm's Maxcor
Foundation, which is designating four recipients: Marine Corps-Law Enforcement
Foundation, Inc., Columbia University, College of Physicians & Surgeons, Duke
University's Fuqua/Coach K Center for Leadership & Ethics and The Royal Marsden
Hospital in London. Our May 12, 2003 Charity Day raised a total of $982,300
which was contributed to The Euro Brokers Relief Fund, Inc. and various
charities supported by the Maxcor Foundation.

Clearing and execution fees are fees paid to clearing organizations for
transaction settlements and credit enhancements and to other broker-dealers
(including ECNs) for providing access to various markets and exchanges for

                              Page 19 of 35 Pages
<PAGE>

executing transactions. For the three months ended June 30, 2004, these costs
increased $64,523 to $1,016,676, compared to $952,153 for the three months ended
June 30, 2003, primarily as a result of the increase in transaction volumes from
our institutional sales and trading businesses.

Depreciation and amortization expense consists principally of depreciation of
communication and computer equipment and automobiles under capitalized leases
and amortization of leasehold improvements and software. For the three months
ended June 30, 2004 and 2003, these costs were comparable at $815,434 and
$814,411, respectively.

Other interest expense represents interest costs incurred on non-securities
related indebtedness, such as revolving credit facilities and capitalized lease
obligations. For the three months ended June 30, 2004, these costs decreased
$164,608 to $31,417, compared to $196,025 for the three months ended June 30,
2003, primarily due to decreased borrowings under our revolving credit facility
with the Bank of New York ("BONY") and decreased capitalized lease obligations.

General, administrative and other expenses include such expenses as corporate
insurance, office supplies and expenses, professional fees, food costs and dues
to various industry associations. For the three months ended June 30, 2004,
these expenses increased $16,532 to $2,077,360, as compared to $2,060,828 for
the three months ended June 30, 2003, reflecting the net effects of a decrease
of $230,000 in legal fees related to the NTL when-issued trade disputes ($70,000
in the current period compared to $300,000 in the prior period), the effects of
adjustments made in the prior period to increase our reserve in the U.K. for the
employer portion of National Insurance Contributions by $465,000 and to reduce
expenses for the recovery of consumption taxes previously paid of $160,000, and
increases in various general and administrative costs such as corporate
insurance, securities licensing fees and office expenses.

Provision for income taxes for the three months ended June 30, 2004 decreased
$2,378,480 to $802,544, compared to $3,181,024 for the three months ended June
30, 2003, primarily as a result of a decrease in pre-tax income.

                         Six Months Ended June 30, 2004
                   Compared to Six Months Ended June 30, 2003

For the six months ended June 30, 2004, commission income increased $6,279,681
to $95,561,410, compared to $89,281,729 for the comparable period in 2003,
primarily reflecting increases in London and Switzerland, offset by a decrease
in New York. The increases in London and Switzerland primarily reflected growth
in the inter-dealer brokerage and institutional businesses started in 2003 and
exchange rate movements. The decrease in New York was primarily the result of a
decrease in riskless principal transactions from our restructured institutional
corporate bond sales and trading operations.

Interest income for the six months ended June 30, 2004 increased $3,619,796 to
$4,934,612, compared to $1,314,816 for the six months ended June 30, 2003,
primarily reflecting increased financing income earned on reverse repurchase
agreements in connection with the institutional securities financing operations

                              Page 20 of 35 Pages
<PAGE>

we started in 2003 and coupon and financing income associated with securities
positions taken by our restructured institutional corporate bond sales and
trading operations.

For the six months ended June 30, 2004, principal transactions resulted in a
gain of $4,481,495, compared to a loss of $257,332 for the six months ended June
30, 2003. This change primarily reflected the effect of a net loss of $5.1
million recorded by MFI during the prior period on the disputed settlement of
its NTL when-issued equity trades, the reversal of $625,000 of this loss during
the current period, and a $1.5 million gain recorded during the current period
from the resolution of contingencies associated with the settlement of certain
principal transactions in the aftermath of the September 11th attacks.
Offsetting these improvements to principal transactions was a reduction in gains
from our restructured institutional corporate bond sales and trading group.

Other items for the six months ended June 30, 2004 resulted in a loss of
$632,449, as compared to a loss of $476,677 for the six months ended June 30,
2003. This increased loss resulted from the expiration of an information
licensing agreement in the second half of 2003, which generated $250,000 of
licensing income during the six months ended June 30, 2003, offset by an
increase in other gains and a narrowing of the loss incurred by the Tokyo
Venture. For the six months ended June 30, 2004, we recorded a loss of $613,528
on our 57.25% interest in this venture, as compared to a loss of $829,462 for
the six months ended June 30, 2003.

For the six months ended June 30, 2004, interest expense on securities
indebtedness increased $4,155,657 to $4,460,806, compared to $305,149 for the
six months ended June 30, 2003, primarily as a result of interest expense
incurred on repurchase agreements in connection with our institutional
securities financing operations and coupon and financing expense on securities
positions taken by our restructured institutional corporate bond sales and
trading operations.

Compensation and related costs for the six months ended June 30, 2004 increased
$5,592,664 to $67,664,377, compared to $62,071,713 for the six months ended June
30, 2003, primarily as a result of increased brokerage staff in connection with
expansion efforts in New York, including in our restructured corporate bond and
trading operations, increased revenues in London and Switzerland from the growth
of various departments started in 2003 (resulting in higher incentive-based
compensation) and the effects of translating strengthened foreign currency
balances to U.S. dollars.

Communication costs for the six months ended June 30, 2004 increased $695,911 to
$6,874,494, compared to $6,178,583 for the six months ended June 30, 2003,
primarily as a result of the currency effects of translating strengthened
British pound sterling amounts to U.S. dollars and the effect of a $250,000
reduction during the prior period to communication accruals in London that were
no longer considered necessary.

Travel and entertainment costs for six months ended June 30, 2004 increased
$1,180,022 to $5,448,996, compared to $4,268,974 for the six months ended June
30, 2003, reflective in part of our various business expansion efforts.

                              Page 21 of 35 Pages
<PAGE>

Occupancy and equipment rental for the six months ended June 30, 2004 increased
$1,359,312 to $4,392,232, compared to $3,032,920 for the six months ended June
30, 2003, primarily due to an increase of $673,000 to an accrual in London for
excess office space (arising from a terminated sublet) designated for sublease.
This adjustment was based upon a reassessment of the length of time it will take
to generate sublease income on this space. Also contributing to the increase in
these costs were increased costs for office space in London effective the second
quarter of 2003 and a full period of rental costs on equipment in New York that
we started leasing in late March 2003.

All the revenue generated on our Charity Days by our New York, Stamford, Mexico,
London and Switzerland offices are donated to designated charities. All
participating brokerage employees waive any entitlement to commissions from such
revenues. The proceeds of $1,042,864 raised on our April 19, 2004 Charity Day
are designated for The Euro Brokers Relief Fund, Inc. and the firm's Maxcor
Foundation, which is designating four recipients: Marine Corps-Law Enforcement
Foundation, Inc., Columbia University, College of Physicians & Surgeons, Duke
University's Fuqua/Coach K Center for Leadership & Ethics and The Royal Marsden
Hospital in London. Our May 12, 2003 Charity Day raised a total of $982,300
which contributed to The Euro Brokers Relief Fund, Inc. and various charities
supported by the Maxcor Foundation.

Clearing and execution fees for the six months ended June 30, 2004 increased
$207,406 to $2,029,030, compared to $1,821,624 for the six months ended June 30,
2003, primarily as a result of the increase in transaction volumes from our
institutional sales and trading businesses.

For the six months ended June 30, 2004, depreciation and amortization increased
$44,431 to $1,624,577, compared to $1,580,146 for the six months ended June 30,
2003, reflecting the net effect of an increase in New York from a full period of
depreciation and amortization of furniture and leasehold improvements purchased
for our new headquarters which we have occupied since March 2003, and a
reduction in London from assets which have been fully depreciated.

Other interest expense for the six months ended June 30, 2004 decreased $147,833
to $84,666, compared to $232,499 for the comparable period in 2003, primarily
due to decreased borrowings under our revolving credit facility with BONY and
decreased capitalized lease obligations.

For the six months ended June 30, 2004, general, administrative and other
expenses increased $238,610 to $3,982,164, as compared to $3,743,554 for the six
months ended June 30, 2003, reflecting the net effects of a decrease of $312,000
in legal fees related to the NTL when-issued trade disputes ($188,000 in the
current period compared to $500,000 in the prior period), the effects of
adjustments in the prior period to increase our reserve in the U.K. for the
employer portion of National Insurance Contributions by $465,000 and to reduce
expenses for the recovery of consumption taxes previously paid of $160,000, and
increases in various general and administrative costs such as corporate
insurance, securities licensing fees and office expenses.

Provision for income taxes for the six months ended June 30, 2004 increased
$1,028,001 to $3,129,106, compared to $2,101,105 for the six months ended June
30, 2003, primarily as a result of an increase in pre-tax income.

                              Page 22 of 35 Pages
<PAGE>

For the six months ended June 30, 2003, minority interest in consolidated
subsidiaries resulted in a reduction of the net income from such subsidiaries of
$175,985. The lack of minority interest in the current period is the result of
the Company's purchase of the minority interest in EBL in February 2003.

During the six months ended June 30, 2003, we recorded an extraordinary gain of
$2,957,547 as the result of our February 2003 discounted purchase of the 50%
minority shareholding held in EBL. We purchased this interest, pursuant to the
terms of an EBL shareholders agreement that we enforced in a U.K. court
proceeding, as a result of the failure of the minority shareholder to provide
certain requested funding to EBL in late 2000. The discounted purchase price,
calculated under the agreement as 70% of the book value attributable to this
shareholding as of December 31, 2000, resulted in an extraordinary gain of
$2,957,547. The gain reflected the excess of $5,570,703, the amount recorded for
the 50% interest in EBL as of the February 2003 purchase date, over the purchase
price of $2,613,156.

                         Liquidity and Capital Resources

A substantial portion of our assets, similar to other brokerage firms, is
liquid, consisting of cash, cash equivalents and assets readily convertible into
cash, such as receivables from broker-dealers and customers and securities
owned.

Cash and cash equivalents at June 30, 2004 reflect a reduction from the level at
December 31, 2003, principally due to the increased use of cash resources for
securities positions (including repurchase and reverse repurchase agreements) in
connection with our institutional sales and trading operations and our
institutional securities financing operations.

U.S. Treasury and federal agency securities purchased under agreements to resell
(reverse repurchase agreements) and U.S. Treasury and federal agency securities
sold under agreements to repurchase (repurchase agreements) are collateralized
financings on which we seek to earn an interest spread. The balances recorded on
these transactions, reflected on the Consolidated Statements of Financial
Condition respectively as "securities purchased under agreements to resell" and
"securities sold under agreements to repurchase," are the contracted amounts,
plus accrued interest. The reduction in these balances from those at December
31, 2003 reflect the increased customer demand for financing that occurs at a
calendar year end. We monitor the fair value of the securities purchased and
sold under these agreements and obtain additional collateral or return excess
collateral where appropriate.

Securities owned and securities sold, not yet purchased reflect securities
positions taken in connection with sales and trading operations and in our firm
investment account. Securities positions taken by our sales and trading
businesses are often for the purpose of facilitating anticipated customer needs
and are typically hedged with offsetting positions of a similar nature.
Securities owned are financed either from cash resources, by short-term bank
loans from our clearing bank, by repurchase agreements or by margin borrowings
(if available) from broker-dealers that clear certain of these transactions on

                              Page 23 of 35 Pages
<PAGE>

our behalf. We are able to make delivery on securities sold, not yet purchased
by borrowing such securities either from clearing firms that clear certain of
these transactions on our behalf or through reverse repurchase agreements.

In the ordinary course of settling our U.S. Treasury and federal agency
securities transactions (including repurchase and reverse repurchase agreements)
we have securities failed-to-deliver and failed-to-receive obligations. These
fails are generally resolved shortly afterwards through proper receipt/delivery.

As reflected on the Consolidated Statements of Financial Condition, and as
detailed in the table below, we had net assets relating to securities positions
(including repurchase and reverse repurchase agreements) of $15.4 million at
June 30, 2004, an increase of $8.3 million as compared to net assets relating to
securities positions of $7.1 million at December 31, 2003.

<TABLE>
<CAPTION>
                                                              (in millions)
                                                    June 30, 2004     December 31, 2003
                                                    -------------     -----------------
<S>                                                 <C>                <C>
Securities purchased under agreements to resell     $       400.4      $     1,446.7
Securities failed-to-deliver                                 23.4               90.7
Securities owned                                             80.8                6.7
Short-term bank loan                               (          0.9)
Securities sold under agreements to repurchase     (        379.0)    (      1,470.5)
Payable to broker-dealers and customers            (         13.4)
Securities failed-to-receive                       (         15.8)    (         66.5)
Securities sold, not yet purchased                 (         80.1)
                                                    -------------      -------------
   Net assets relating to securities positions      $        15.4      $         7.1
                                                    =============      =============
</TABLE>

MFI is a member of the GSD-FICC for the purpose of clearing transactions in U.S.
Treasury and federal agency securities and repurchase agreements collateralized
by such instruments. Pursuant to such membership, MFI is required to maintain
excess regulatory net capital of $10 million and a minimum net worth (including
subordinated borrowing) of $25 million. In addition, MFI is required to maintain
a clearing deposit with GSD-FICC, based upon the level and nature of its trading
activity (with a minimum deposit of $5 million), as well as certain minimum
collateral deposits with its clearing brokers. The aforementioned deposits have
been reflected as deposits with clearing organizations on the Consolidated
Statements of Financial Condition.

EBL is a Type D registered firm of the FSA in the U.K., required to maintain a
financial resources requirement generally equal to six weeks average
expenditures plus the amount of less liquid assets on hand (a $6.3 million
requirement at June 30, 2004).

At June 30, 2004, we had $5 million outstanding under a three-year revolving
credit facility entered into by Euro Brokers Inc. ("EBI"), a U.S. subsidiary,
with BONY in March 2003. This facility, as amended in November 2003, provides
for borrowings of up to $10 million and is secured by EBI's receivables and the
stock issued by EBI to its direct parent. The agreement with BONY contains
certain covenants which require EBI separately, and MFGI on a consolidated

                              Page 24 of 35 Pages
<PAGE>

basis, to maintain certain financial ratios and conditions. Borrowings under
this facility bear interest at a variable rate based upon two types of borrowing
options, (1) an "alternate base rate" option which incurs interest at the Prime
Rate plus a margin or (2) a Eurodollar option which incurs interest at rates
quoted in the London interbank market plus a margin. Commitment fees of .35% per
annum are charged on the unused portion of this facility.

As of June 30, 2004, we had authorization remaining for the repurchase of up to
528,225 shares of our common stock under our existing share repurchase program
authorized by our Board of Directors in July 2001. The program originally
authorized the repurchase of up to 709,082 shares (10% of the then-outstanding
shares), was initially expanded in the immediate aftermath of the September 11th
attacks to authorize the repurchase of up to 1,200,000 shares, and was further
expanded in April 2003 by an additional 700,000 shares, for a total of 1,900,000
shares. In July 2004, our Board authorized a further expansion of the program by
an additional 500,000 shares, for a total of 2,400,000 shares. As has been the
case with prior repurchase program authorizations, purchases are to be made from
time to time as market and business conditions warrant, and accordingly, there
is no guarantee as to the timing or number of shares to be repurchased.

In July 2004, our Board of Directors declared a common stock cash dividend of
$.0625 per share for our fiscal second quarter. The dividend is payable on
September 14, 2004 to holders of record on August 27, 2004. We believe that the
dividend, which on an annual basis is anticipated to be $.25 per share, is a
tax-efficient way to return value to our shareholders while at the same time
enabling us to retain sufficient earnings for growth opportunities.

In the ordinary course of our businesses, we are subject to extensive regulation
at international, federal and state levels by various regulatory bodies which
are charged with safeguarding the integrity of the securities and other
financial markets and protecting the interest of customers. The compliance
requirements of these different regulatory bodies may include, but are not
limited to, net capital or stockholders' equity requirements.

We believe that all of our ongoing liquidity needs will be met in timely fashion
from our cash and cash equivalents and other resources. Moreover, we have
historically met regulatory net capital and stockholders' equity requirements
and believe we will be able to continue to do so in the future.

                           Forward-Looking Statements

Certain statements contained in this Item 2 and elsewhere in this report, as
well as other oral and written statements made by us to the public, contain and
incorporate by reference forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Wherever possible, we have identified these forward-looking statements by
words such as "believes," "anticipates," "expects," "may," "intends" and similar
phrases. Such forward-looking statements, which describe our current beliefs
concerning future business conditions and the outlook for our company and
business, are subject to significant uncertainties, many of which are beyond our
control. Actual results or performance could differ materially from that which

                              Page 25 of 35 Pages
<PAGE>

we expect. Uncertainties include factors such as: market and economic
conditions, including the level of trading volumes in the instruments we broker
and interest rate volatilities; the effects of any additional terrorist acts or
acts of war and governments' military and other responses to them; the success
of our technology development and deployment; the status of our relationships
with employees, clients, business partners, vendors and clearing firms; possible
third-party litigations or regulatory actions against us or other unanticipated
contingencies; the scope of our trading gains and losses; the actions of our
competitors; and government regulatory changes. For a fuller description of
these and additional uncertainties, reference is made to the "Competition,"
"Regulation," "Cautionary Statements," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the "Quantitative and
Qualitative Disclosures about Market Risk" sections of the 2003 Form 10-K. The
forward-looking statements made herein are only made as of the date of this
report and we undertake no obligation to publicly update such forward-looking
statements to reflect new information or subsequent events or circumstances.


Item 3. Quantitative and Qualitative Disclosures about Market Risk

In January 2004, we restructured our institutional corporate bond sales and
trading operations. The table below provides information at June 30, 2004, about
the securities positions associated with these operations. Our market risk
analysis did not otherwise materially change from the market risk analysis as of
December 31, 2003 presented in the 2003 Form 10-K.

As of June 30, 2004:
-------------------
<TABLE>
<CAPTION>
                          2004         2005          2006          2007         2008        After 2008      Total       Fair Value
                       ----------   -----------   -----------   -----------  -----------   ------------  ------------  ------------
<S>                    <C>          <C>           <C>           <C>          <C>           <C>           <C>           <C>
Trading:
-------
Interest rate
sensitivity:
  Securities owned:
    Corporate bonds    $   45,000   $ 3,570,000   $ 4,385,000   $ 1,230,000  $ 2,460,000   $ 60,803,000  $ 72,493,000  $ 75,545,484
     (weighted
     average interest
     rate-6.86%)
    U.S. Treasury
    securities                                                                                1,208,000     1,208,000     1,396,451
      (weighted
      average interest
      rate-5.92%)
  Securities sold, not
   yet purchased:
    Corporate bonds   (    65,000) (  1,576,000) (  2,491,000) (  5,619,000)(  1,757,000) (  43,767,000)(  55,275,000)(  56,774,897)
     (weighted
     average interest
     rate-6.61%)
    U.S. Treasury
    securities                                   (  3,900,000) (    350,000)              (  18,412,000)(  22,662,000)(  23,310,825)
      (weighted
      average interest
      rate-4.73%)
</TABLE>

Item 4. Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of our disclosure controls and
procedures as of June 30, 2004. Our disclosure controls and procedures are
designed to provide reasonable assurance that the information required to be

                              Page 26 of 35 Pages
<PAGE>

disclosed in our periodic SEC reports has been appropriately recorded,
processed, summarized and reported. Based on that evaluation, our Chief
Executive Officer and our Chief Financial Officer have concluded that our
disclosure controls and procedures are effective at the reasonable assurance
level.

Our management, including our Chief Executive Officer and Chief Financial
Officer, has evaluated any changes in our internal control over financial
reporting that occurred during the quarterly period ended June 30, 2004, and has
concluded that there was no change during this quarterly period that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

                              Page 27 of 35 Pages
<PAGE>

                           PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

See Note 5 to the Consolidated Financial Statements (unaudited) included as a
part of this report for a discussion of the proceedings in the Supreme Court of
the State of New York involving the disputed settlement of our NTL Inc.
when-issued equity trades.

Item 2.   Changes in Securities, Use of Proceeds and Issuer Purchases of Equity
          Securities

(e)  Issuer Purchases of Equity Securities

The following table is a summary of all purchases made by us of our common stock
during the three months ended June 30, 2004 and, as of each month end during
such three-month period, the maximum number of shares that could still be
purchased under our share repurchase program as then constituted:

                    Issuer Purchase of Equity Securities (1)

<TABLE>
<CAPTION>
                                                                         Total Number of       Maximum
                                                                         Shares Purchased     Number of
                                                                            as Part of     Shares that May
                                        Total Number of     Avrage           Publicly     Yet be Purchased
                                            Shares        Price Paid     Announced Plans   Under the Plans
         Period                           Purchased        per Share       or Programs     or Programs(2)
         ------                         --------------   --------------   --------------   --------------
<S>                                            <C>       <C>                     <C>              <C>
April 1 to April 30, 2004                        5,400   $        11.29            5,400          663,793
May 1 to May 31, 2004                           95,268   $        10.97           95,268          568,525
June 1 to June 30, 2004                         40,300   $        10.90           40,300          528,225
                                        --------------   --------------   --------------
                             Total:            140,968   $        10.96          140,968
</TABLE>

----------------------------
(1)   Following the full utilization of earlier share repurchase authorizations
      announced on May 15, 2000 (833,744 shares) and January 26, 2001 (787,869
      shares), we announced on July 26, 2001, a further authorization by our
      Board of Directors of a share repurchase program for up to 709,082 shares
      (10% of our then-outstanding shares). On September 18, 2001, in the
      immediate aftermath of the September 11th attacks, we announced the
      expansion of this authorization to bring the total repurchase
      authorization up to 1,200,000 shares. On April 24, 2003, we announced the
      further expansion of this authorization by an additional 700,000 shares,
      for a total repurchase authorization of 1,900,000 shares. These
      authorizations have no expiration date and delegate to our senior
      management the discretion to purchase shares, through open market,
      privately negotiated and/or block transactions, at times, amounts and
      prices it deems financially prudent in light of prevailing market,
      business and financial conditions.

(2)   In July 2004, our Board authorized a further expansion of the share
      repurchase program by an additional 500,000 shares, for a total
      authorization of 2,400,000 shares. The numbers in this column do not
      reflect this additional authorization, which occurred after the end of the
      periods covered by this table.

                              Page 28 of 35 Pages
<PAGE>

Item 4.           Submission of Matters to a Vote of Security Holders

On June 9, 2004, we held our annual meeting of stockholders (the "Meeting"). At
the Meeting, stockholders re-elected three directors - Keith E. Reihl, Oscar M.
Lewisohn and Marc S. Cooper - as Class II directors, to serve terms expiring at
our third succeeding annual meeting of stockholders.

In addition, stockholders at the Meeting ratified the appointment of
PricewaterhouseCoopers LLP as our independent accountants for the year ending
December 31, 2004.

At the Meeting, 6,616,528 shares of our common stock were represented by proxy
or ballot, comprising approximately 92.4% of the 7,164,273 shares of common
stock outstanding at the close of business on April 26, 2004, the record date
for the Meeting. Specific voting results for each of the two proposals described
above were as follows:

1.       Election of Directors:

         Keith E. Reihl
         --------------
         For:                                  6,465,431
         Withheld:                               151,097

         Oscar M. Lewisohn
         -----------------
         For:                                  6,220,364
         Withheld:                               396,164

         Marc S. Cooper
         --------------
         For:                                  6,218,964
         Withheld:                               397,564

2.       Ratification of Appointment of Independent Accountants:

         For:                                  6,566,914
         Against:                                 35,313
         Abstain:                                 14,301

                              Page 29 of 35 Pages
<PAGE>

Item 6.           Exhibits and Reports on Form 8-K

(a)      Exhibits

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

31.1                     Rule 13a-14(a) Certification of Principal Executive
                         Officer

31.2                     Rule 13a-14(a) Certification of Principal Financial
                         Officer

32                       18 U.S.C. Section 1350 Certifications of Principal
                         Executive and Financial Officers


(b)      Reports on Form 8-K

During the three months ended June 30, 2004, we filed two current reports on
Form 8-K, respectively on April 29, 2004 and May 4, 2004. The first filed report
attached our Letter to Stockholders that was included as part of our 2003 Annual
Report. The second filed report attached our press release announcing our
financial results for our fiscal first quarter ended March 31, 2004, as well as
the declaration by our Board of Directors of the quarterly dividend on our
common stock of $0.0625 per share.

                              Page 30 of 35 Pages
<PAGE>

                                   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.

Date:  August 13, 2004


                                    MAXCOR FINANCIAL GROUP INC.
                                           (Registrant)




                                    /s/ GILBERT D. SCHARF
                                    --------------------------------------------
                                    Gilbert D. Scharf, Chief Executive Officer




                                    /s/ STEVEN R. VIGLIOTTI
                                    --------------------------------------------
                                    Steven R. Vigliotti, Chief Financial Officer

                              Page 31 of 35 Pages
<PAGE>

                                  EXHIBIT INDEX


Exhibit     Description                                                     Page
-------     -----------                                                     ----

31.1        Rule 13a-14(a) Certification of Principal Executive Officer       33

31.2        Rule 13a-14(a) Certification of Principal Financial Officer       34

32          18 U.S.C. Section 1350 Certifications of Principal Executive      35
            and Financial Officers

                              Page 32 of 35 Pages