SECURITIES & EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-Q/A

                                (Amendment No. 3)

(Mark One)

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

For the quarterly period ended March 31, 2006
                               --------------

                                       or

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

For the transition period from            to
                               ----------    ----------

Commission File No. 1-106
                    -----

                              GAMCO INVESTORS, INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

New York                                                     13-4007862
--------------------------------------------------------------------------------
(State of other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)


One Corporate Center, Rye, NY                                         10580-1422
--------------------------------------------------------------------------------
(Address of principle executive offices)                              (Zip Code)


                                 (914) 921-3700
--------------------------------------------------------------------------------
               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 a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer      Accelerated filer  X   Non-accelerated filer
                       -----                  -----                      -----

Indicate by check mark whether the registrant is a shell company (as defined in
Exchange Act Rule 12b-2). Yes      No  X
                             -----   -----

Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock, as of the latest practical date.

               Class                               Outstanding at April 30, 2006
               -----                               -----------------------------
Class A Common Stock, .001 par value                         5,645,985
Class B Common Stock, .001 par value                        23,128,500

                                       1
<PAGE>

                                Explanatory Note

This Form 10-Q/A of GAMCO Investors, Inc. (the "Company") constitutes Amendment
No. 3 to the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 2006, which was initially filed with the Securities and Exchange Commission
on May 10, 2006 and amended on May 11, 2006. On November 9, 2006, Amendment No.
2 was filed to restate the Financial Statements and amend Management's
Discussion and Analysis of Financial Condition and Results of Operations
(Including Quantitative and Qualitative Disclosure about Market Risk) in Part I,
Items 1 and 2, respectively, as a result of the Company changing its accounting
method for recognizing incentive fee revenues on Investment Partnerships
effective January 1, 2006. As further described in Note A to the Condensed
Consolidated Financial Statements, the purpose of this filing is to restate the
Financial Statements and amend Management's Discussion and Analysis of Financial
Condition and Results of Operations (Including Quantitative and Qualitative
Disclosure about Market Risk) in Part I, Items 1 and 2, respectively, relating
to the reporting of individual assets and liabilities of certain proprietary
investment accounts. In addition, certain reclassifications on the Condensed
Consolidated Statements of Financial Condition and on the Condensed Consolidated
Statements of Cash Flows have been made relating to the consolidation of certain
investment partnerships and offshore funds in accordance with the provisions of
FASB Interpretation No. 46R ("FIN 46R") and Emerging Issue Task Force 04-5
("EITF 04-5") and relating to the voluntary change in accounting principle.

                                       2
<PAGE>
                                      INDEX

                     GAMCO INVESTORS, INC. AND SUBSIDIARIES


PART I.         FINANCIAL INFORMATION
-------------------------------------------

Item 1.         Financial Statements (Unaudited)

                Condensed Consolidated Statements of Income:
                -    Three months ended March 31, 2006 and 2005

                Condensed Consolidated Statements of Financial Condition:
                -    December 31, 2005
                -    March 31, 2006
                -    March 31, 2005

                Condensed Consolidated Statements of Stockholders' Equity and
                 Comprehensive Income:
                -    Three months ended March 31, 2006 and 2005

                Condensed Consolidated Statements of Cash Flows:
                -    Three months ended March 31, 2006 and 2005

                Notes to Condensed Consolidated Financial Statements

Item 2.         Management's Discussion and Analysis of Financial Condition and
                Results of Operations (Including Quantitative and Qualitative
                Disclosure about Market Risk)

Item 4.         Controls and Procedures

PART II.              OTHER INFORMATION
---------------------------------------

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

Item 6.         Exhibits


SIGNATURES
----------

                                       3
<PAGE>
                     GAMCO INVESTORS, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                    UNAUDITED
                      (In thousands, except per share data)


                                             Three Months Ended
                                                  March 31,
                                       -------------------------------
                                           2005 (a)        2006 (a)
                                       --------------  ---------------
Revenues
  Investment advisory and incentive
   fees                                $       52,713  $       50,398
  Commission revenue                            2,465           3,451
  Distribution fees and other income            5,135           5,435
                                       --------------  ---------------
     Total revenues                            60,313          59,284
                                       --------------  ---------------
Expenses
  Compensation and related costs               25,622          25,277
  Management fee                                2,206           3,367
  Distribution costs                            6,213           5,215
  Other operating expenses                      6,556           7,391
                                       --------------  ---------------
     Total expenses                            40,597          41,250
                                       --------------  ---------------

Operating income                               19,716          18,034
                                       --------------  ---------------
Other income (expense)
  Net gain from investments                       595          23,125
  Interest and dividend income                  3,472           6,373
  Interest expense                             (3,929)         (3,875)
                                       --------------  ---------------
     Total other income, net                      138          25,623
                                       --------------  ---------------
Income before income taxes and minority
 interest                                      19,854          43,657
  Income tax provision                          7,445          16,371
  Minority interest                               (20)          8,586
                                       --------------  ---------------
    Net income                         $       12,429  $       18,700
                                       ==============  ===============

Net income per share:
  Basic                                $         0.42  $         0.64
                                       ==============  ===============

  Diluted                              $         0.41  $         0.63
                                       ==============  ===============

Weighted average shares outstanding:
  Basic                                        29,560          29,180
                                       ==============  ===============

  Diluted                                      31,684          30,185
                                       ==============  ===============


Dividends declared:
   Quarterly                           $         0.02  $         0.03
                                       ==============  ===============

(a) As restated for the change in accounting method as described in Note A in
item 1 of this report on Form 10-Q/A which were previously reported on Form
10-Q/A (Amendment No. 2) filed with the Securities and Exchange Commission on
November 9, 2006.

See accompanying notes.

                                       4
<PAGE>
                     GAMCO INVESTORS, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
<S>                                                                <C>             <C>             <C>
                                                            December 31,     March 31,       March 31,
                                                               2005 (a)        2005 (a)        2006 (a)
                                                           --------------  --------------  ---------------
ASSETS                                                                              (Unaudited)

Cash and cash equivalents, including restricted cash of
 $2,503, $51,811 and $739.                                 $      173,161  $      332,927  $      126,842
Investments in securities, including restricted securities
 of $52,219, $51,895 and $81,059.                                 421,404         293,455         412,031
Investments in partnerships and affiliates                         74,827          68,388          89,250
Receivable from brokers                                             9,827          27,639          77,731
Investment advisory fees receivable                                22,098          22,499          16,619
Other assets                                                       26,821          25,581          20,798
                                                           --------------  --------------  ---------------

     Total assets                                          $      728,138  $      770,489  $      743,271
                                                           ==============  ==============  ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

Payable to brokers                                         $        3,937  $            -  $        3,406
Income taxes payable, including deferred taxes of $1,699,
 $708, and $4,129.                                                 10,097           7,782          14,539
Compensation payable                                               27,820          32,212          34,296
Capital lease obligation                                            2,992           3,127           2,943
Securities sold, not yet purchased                                  3,183           2,921           4,833
Accrued expenses and other liabilities                             17,579          18,990          20,590
                                                           --------------  --------------  ---------------

     Total operating liabilities                                   65,608          65,032          80,607
                                                           --------------  --------------  ---------------

5.5% Senior notes (due May 15, 2013)                              100,000         100,000         100,000
5% Convertible note (conversion price, $52.00 per share;
   note due August 14, 2011)                                       50,000         100,000          50,000
5.22% Senior notes (due February 17, 2007)                         82,308          82,308          82,308
                                                           --------------  --------------  ---------------

     Total liabilities                                            297,916         347,340         312,915

Minority interest                                                   6,147           6,135          19,997

Stockholders' equity
Class A Common Stock, $0.001 par value; 100,000,000
    shares authorized; 9,648,339, 9,612,314 and 9,658,339
    issued, respectively; 6,414,517, 7,192,992 and
    5,645,985 outstanding, respectively                                10              10              10
Class B Common Stock, $0.001 par value; 100,000,000
    shares authorized; 23,128,500, 23,128,500 and
    23,128,500 issued and outstanding, respectively                    23              23              23
Additional paid-in capital                                        226,353         232,540         226,640
Retained earnings                                                 329,036         280,085         346,939
Accumulated comprehensive gain                                        526           1,088           2,985
Treasury stock, at cost (3,233,822, 2,419,322 and 4,012,354
 shares, respectively)                                           (131,873)        (96,732)       (166,238)
                                                           --------------  --------------  ---------------
     Total stockholders' equity                                   424,075         417,014         410,359
                                                           --------------  --------------  ---------------

Total liabilities and stockholders' equity                 $      728,138  $      770,489  $      743,271
                                                           ==============  ==============  ===============
</TABLE>

(a) As restated for (1) the change in accounting method which was previously
reported on Form 10-Q/A (Amendment No. 2) filed with the Securities and Exchange
Commission on November 9, 2006 as described in Note A in item 1 of this report
on Form 10-Q/A, and (2) the reporting of individual assets and liabilities of
certain proprietary investment accounts as described in Note A in item 1 of this
report on Form 10-Q/A.

See accompanying notes.

                                       5
<PAGE>
                     GAMCO INVESTORS, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
                        EQUITY AND COMPREHENSIVE INCOME
                                    UNAUDITED
                                 (In thousands)
<TABLE>
<CAPTION>
<S>                                                        <C>             <C>
                                                                 Three Months Ended
                                                                       March 31,
                                                           -------------------------------
                                                               2005 (a)        2006 (a)
                                                           --------------  ---------------
Stockholders' equity - beginning of period                 $      334,878  $      424,075
Cumulative effect of change in accounting principle                  (178)              -
                                                           --------------  ---------------
Beginning balance, as restated                                    334,700         424,075

Comprehensive income:
  Net income                                                       12,429          18,700
  Foreign currency translation adjustments                             50              74
  Net unrealized gain on securities available for sale              1,142           2,455
                                                           --------------  ---------------
Comprehensive income                                               13,621          21,229
                                                           --------------  ---------------

Dividends declared                                                   (735)           (867)
Stock option expense                                                  485               6
Proceeds from settlement of purchase contracts                     70,568               -
Exercise of stock options including tax benefit                       435             281
Purchase of treasury stock                                         (2,060)        (34,365)
                                                           --------------  ---------------
Stockholders' equity - end of period                       $      417,014  $      410,359
                                                           ==============  ===============
</TABLE>

(a) As restated for the change in accounting method as described in Note A in
item 1 of this report on Form 10-Q/A which were previously reported on Form
10-Q/A (Amendment No. 2) filed with the Securities and Exchange Commission on
November 9, 2006.

See accompanying notes.

                                       6
<PAGE>
                     GAMCO INVESTORS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    UNAUDITED
                                 (In thousands)

<TABLE>
<CAPTION>
<S>                                                                   <C>             <C>
                                                                            Three Months Ended
                                                                                  March 31,
                                                                      -------------------------------
                                                                          2005 (a)        2006 (a)
                                                                      --------------  ---------------
Operating activities
Net income                                                            $       12,429  $       18,700
Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
Equity in gains from partnerships and affiliates                              (2,110)         (2,864)
Depreciation and amortization                                                    234             224
Stock-based compensation expense                                                 485               6
Tax benefit from exercise of stock options                                       102              66
Foreign currency loss                                                            211               -
Other-than-temporary loss on available for sale securities                     3,179               -
Impairment of goodwill                                                         1,127               -
Minority interest in net income of consolidated subsidiaries                     (20)            240
Realized gains on sales of available for sale securities, net                      -            (442)
Realized gains on sales of investments in securities, net                     (1,239)         (6,585)
Change in unrealized value of investments in securities, net                  (2,455)         (1,018)
(Increase) decrease in operating assets:
   Purchases of trading investments in securities                           (400,400)       (287,602)
   Proceeds from sales of trading investments in securities                  407,615         321,529
   Investments in partnerships and affiliates                                 (6,557)         (1,225)
   Distributions from partnerships and affiliates                             29,619             848
   Investment advisory fees receivable                                         2,938           5,430
   Other receivables from affiliates                                           3,425           6,669
   Receivable from brokers                                                   (22,100)        (62,873)
   Other assets                                                               (2,290)           (884)
Increase (decrease) in operating liabilities:
   Payable to brokers                                                           (301)           (531)
   Income taxes payable                                                       (1,310)          2,884
   Compensation payable                                                        5,185           6,040
   Accrued expenses and other liabilities                                      1,221             215
Effects of consolidation of investment partnerships and offshore funds
consolidated under FIN 46R and EITF 04-5:
   Realized gains on sales of investments in securities and securities
    sold short, net                                                                -         (11,917)
   Change in unrealized value of investments in securities and
    securities sold short, net                                                     -          (1,430)
   Equity in net gains from partnerships and affiliates                            -            (425)
   Purchases of trading investments in securities and securities sold
    short                                                                          -        (642,059)
   Proceeds from sales of trading investments in securities and
    securities sold short                                                          -         619,704
   Investments in partnerships and affiliates                                      -            (982)
   Distributions from partnerships and affiliates                                  -             380
   Increase in receivable from brokers                                             -         (12,469)
   Decrease in other assets                                                        -             354
   Increase in payable to brokers                                                  -           5,783
   Decrease in accrued expenses and other liabilities                              -          (9,786)
   Income related to investment partnerships and offshore funds
    consolidated under FIN 46R and EITF 04-5, net                                  -          14,430
                                                                      --------------  ---------------
Total adjustments                                                             16,559         (58,290)
                                                                      --------------  ---------------
Net cash provided by (used in) operating activities                           28,988         (39,590)
                                                                      --------------  ---------------
</TABLE>

                                       7
<PAGE>
                     GAMCO INVESTORS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    UNAUDITED
                                 (In thousands)
<TABLE>
<CAPTION>
<S>                                                                   <C>             <C>
                                                                            Three Months Ended
                                                                                  March 31,
                                                                      -------------------------------
                                                                          2005 (a)        2006 (a)
                                                                      --------------  ---------------

Investing activities
Purchases of available for sale securities                                    (3,944)         (3,006)
Proceeds from sales of available for sale securities                               -           1,486
                                                                      --------------  ---------------
Net cash used in investing activities                                         (3,944)         (1,520)
                                                                      --------------  ---------------

Financing activities
Contributions related to investment partnerships and offshore funds
 consolidated under FIN 46R and EITF 04-5, net                                     -          28,190
Proceeds from exercise of stock options                                          333             215
Dividends paid                                                               (18,037)           (867)
Proceeds from the settlement of purchase contracts                            70,568               -
Purchase of treasury stock                                                    (2,060)        (34,365)
                                                                      --------------  ---------------
Net cash provided by (used in) financing activities                           50,804          (6,827)
                                                                      --------------  ---------------
Net increase (decrease) in cash and cash equivalents                          75,848         (47,937)
Net increase in cash from partnerships and offshore funds consolidated
 under FIN 46R and EITF 04-5                                                       -           1,550
Effect of exchange rates on cash and cash equivalents                            (17)             68
Cash and cash equivalents at beginning of period                             257,096         173,161
                                                                      --------------  ---------------
Cash and cash equivalents at end of period                            $      332,927  $      126,842
                                                                      ==============  ===============
</TABLE>

(a) As restated for (1) the change in accounting method which was previously
reported on Form 10-Q/A (Amendment No. 2) filed with the Securities and Exchange
Commission on November 9, 2006 as described in Note A in item 1 of this report
on Form 10-Q/A, and (2) the reporting of individual assets and liabilities of
certain proprietary investment accounts as described in Note A in item 1 of this
report on Form 10-Q/A.

See accompanying notes.

                                       8
<PAGE>
                     GAMCO INVESTORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2006
                                   (Unaudited)

A.   Basis of Presentation

     Unless we have indicated otherwise, or the context otherwise requires,
references in this report to "GAMCO Investors, Inc.," "GAMCO," "we," "us" and
"our" or similar terms are to GAMCO Investors, Inc. (formerly Gabelli Asset
Management Inc.), its predecessors and its subsidiaries.

     The unaudited interim Condensed Consolidated Financial Statements of GAMCO
Investors, Inc. included herein have been prepared in conformity with generally
accepted accounting principles in the United States for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all the information and footnotes required
by generally accepted accounting principles in the United States for complete
financial statements. In the opinion of management, the unaudited interim
condensed consolidated financial statements reflect all adjustments, which are
of a normal recurring nature, necessary for a fair presentation of financial
position, results of operations and cash flows of GAMCO for the interim periods
presented and are not necessarily indicative of a full year's results.

     In preparing the unaudited interim condensed consolidated financial
statements, management is required to make estimates and assumptions that affect
the amounts reported in the financial statements. Actual results could differ
from those estimates.

     These financial statements should be read in conjunction with our audited
consolidated financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 2005, from which the accompanying Condensed
Consolidated Statement of Financial Condition was derived.

     Certain items previously reported have been reclassified to conform to the
current period's financial statement presentation.

Changes in Accounting Policy

     GAMCO has voluntarily changed its accounting method to recognize management
fee revenues on closed-end preferred shares at the end of the measurement
period, effective January 1, 2006. Unlike most money management firms, GAMCO
does not charge fees on leverage in its closed-end funds unless the total return
to the common shareholders (of the closed-end fund at year-end) exceeds the
dividend rate of the preferred shares. In 2005, GAMCO recognized these revenues
during each interim reporting period if and when the total return to common
shareholders of the closed-end fund exceeded the dividend rate of the preferred
shares. Under this method, management fee revenues recognized in prior interim
periods during the measurement period were subject to possible reversal in
subsequent periods during that measurement period. Had this method not changed,
we would have recorded approximately $1.5 million in management fee revenues on
closed-end preferred shares for the three month period ended March 31, 2006.

                                       9
<PAGE>

     GAMCO inadvertently incorrectly applied the voluntary accounting change
discussed in the preceding paragraph because it did not include changing the
method of accounting for the investment partnerships. Therefore, GAMCO has
changed its accounting method to recognize incentive fee revenues on investment
partnerships at the end of the measurement period, effective January 1, 2006.
The restatement effects of this correction of the application of this accounting
change were previously reported in Form 10-Q/A (Amendment No. 2) filed with the
Securities and Exchange Commission on November 9, 2006. Prior to that correction
of the application of the voluntary accounting change, GAMCO recognized these
revenues during each interim reporting period. Under this method, incentive fee
revenues recognized in prior interim periods during the measurement period were
subject to possible reversal in subsequent periods during the measurement
period. Had this method not changed, we would have recorded approximately $1.3
million in incentive fee revenues on investment partnerships for the three month
period ended March 31, 2006. The result of the restatement includes a reduction
in net income of $0.6 million and a reduction in fully diluted EPS of $0.02 per
share for the three month period ended March 31, 2006.

     After considering the guidance provided in EITF D-96, "Accounting for
Management Fees Based on Formula", GAMCO believes that the preferable method of
accounting is to recognize management fee revenues on closed-end preferred
shares and incentive fees on investment partnerships at the end of the
measurement period. This method results in revenue recognition only when the
measurement period has been completed and when the management fees and incentive
fees have been earned. This eliminates the possibility of revenues that have
been recognized in interim measurement periods subsequently being reversed in
later periods during a fiscal year.

     Under SFAS No. 154 "Accounting Changes and Error Corrections," which GAMCO
adopted on January 1, 2006, a voluntary change in accounting principle requires
retrospective application to each period presented as if the different
accounting principle had always been used and requires an adjustment at the
beginning of the first period presented for the cumulative effect of the change
to the new accounting principle. Whereas some investment partnerships have a
fiscal year-end differing from GAMCO's fiscal year-end, there is an adjustment
for the cumulative effect of a change to the accounting principle at January 1,
2005 and a change in full year 2005 revenues and net income from what was
previously reported. Therefore, this change in accounting principle resulted in
a reduction of revenues of approximately $1.2 million in the first quarter of
2005, approximately $23,000 in the second quarter of 2005, $5.5 million in the
third quarter of 2005 and an increase in revenues of $7.7 million in the fourth
quarter of 2005.
<TABLE>
<CAPTION>
<S>                      <C>                <C>                <C>                     <C>
                                                Quarter Ended (a)
($ millions)             March 31, 2005     June 30, 2005      September 30, 2005      December 31, 2005
                         --------------------------------------------------------------------------------
Revenue Reported         $61.5              $59.8              $66.2                   $64.8
        Restated         $60.3              $59.8              $60.7                   $72.5
                         -----              -----              -----                   -----
        Change          ($1.2)              -                 ($5.5)                   $7.7

EPS     Reported         $0.42              $0.43              $0.64                   $0.61
        Restated         $0.41              $0.42              $0.59                   $0.67
                         -----              -----              -----                   -----
        Change          ($0.01)            ($0.01)            ($0.05)                  $0.06
</TABLE>
     (a) Differences due to rounding.

     As disclosed in our Annual Report on Form 10-K for the year ended December
31, 2006 (filed with the Securities and Exchange Commission on March 19, 2007),
GAMCO is restating its financial statements included herein to properly report
individual assets and liabilities relating to certain of GAMCO's proprietary
investments. The assets and liabilities (primarily short positions and margin)
associated with these investment accounts were previously reported on a net
asset basis but should have been reported on a gross asset and liability basis.
This change had no effect on net income or stockholders' equity. See Item 7 and
Note A contained in Item 8 of our Annual Report on Form 10-K for the year ended
December 31, 2006 for further details. The impact of the change on our Condensed
Consolidated Statements of Financial Condition for March 31, 2005, June 30,
2005, September 30, 2005 and December 31, 2005, respectively, is as follows:

                                       10
<PAGE>

($ millions)             3/31/2005   6/30/2005   9/30/2005   12/31/2005
                        ----------- ----------- ----------- ------------
Assets:
  Reported              $    768.7  $    709.9  $    733.4  $     720.9
  Restated                   770.5       712.0       738.2        728.1
                        ----------- ----------- ----------- ------------
  Change                       1.8         2.1         4.8          7.2

Operating Liabilities:
  Reported                    63.2        55.1        64.7         58.4
  Restated                    65.0        57.2        69.5         65.6
                        ----------- ----------- ----------- ------------
  Change                       1.8         2.1         4.8          7.2

Total Liabilities:
  Reported                   345.5       287.4       297.0        290.7
  Restated                   347.3       289.5       301.8        297.9
                        ----------- ----------- ----------- ------------
  Change                       1.8         2.1         4.8          7.2

Equity:
  Reported                   417.0       416.8       430.5        424.1
  Restated                   417.0       416.8       430.5        424.1
                        ----------- ----------- ----------- ------------
  Change                $        -  $        -  $        -  $         -


     The impact of the change on our Condensed Consolidated Statement of
Financial Condition at March 31, 2006 is as follows:

                                 Operating      Total
($ millions)          Assets     Liabilities  Liabilities    Equity
                    ----------- ------------ ------------ ------------

  Reported          $    734.9  $      72.2  $     304.5  $     410.4
  Restated               743.3         80.6        312.9        410.4
                    ----------- ------------ ------------ ------------
  Change            $      8.4  $       8.4  $       8.4  $         -

B. Investment in Securities

     Management determines the appropriate classification of debt and equity
securities at the time of purchase and reevaluates such designation as of each
balance sheet date. Investments in Treasury Bills and Notes with maturities of
greater than three months at the time of purchase are classified as investments
in securities and with maturities of three months or less at time of purchase
are classified as cash and cash equivalents. A substantial portion of
Investments in Securities are held for resale in anticipation of short-term
market movements and therefore are classified as trading securities. Available
for sale ("AFS") investments are stated at fair value, with any unrealized gains
or losses, net of deferred taxes, reported as a component of stockholders'
equity except for losses deemed to be other than temporary which are recorded as
realized losses in the statement of income.

     The Company accounts for derivative financial instruments in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 133 ("Statement
No. 133"), Accounting for Derivative Instruments and Hedging Activities, as
amended. Statement No. 133 requires that an entity recognize all derivatives, as
defined, as either assets or liabilities measured at fair value. The Company
uses swaps and treasury futures to manage its exposure to market and credit
risks from changes in certain equity prices, interest rates, and volatility and
does not hold or issue swaps and treasury futures for speculative or trading
purposes. These swaps and treasury futures are not designated as hedges, and
changes in fair values of these derivatives are recognized in earnings as gains
(losses) on derivative contracts. The fair value of swaps and treasury shares
are included in the investments in securities in the statements of financial
condition, and gains and losses from the swaps and treasury shares are included
in net gain from investments in the statement of income.

                                       11
<PAGE>

     For the three months ended March 31, 2006, there was no impairment of AFS
securities. For the three month period ended March 31, 2005, there was $3.2
million in losses on AFS securities deemed to be other than temporary which were
recorded in the statement of income.

     The losses related to AFS securities in the three month period ended March
31, 2005 were partially offset by gains related to our $100,000 venture capital
investment in optionsXpress Holdings, Inc. (Nasdaq: OXPS) made in 2001 through
our 92% owned subsidiary, Gabelli Securities, Inc. OXPS completed its initial
public offering during the first quarter of 2005. We recorded a total gain of
$2.1 million on OXPS for the three months of 2005.

     At March 31, 2006 and 2005, the market value of investments available for
sale was $87.6 million and $78.5 million, respectively. Unrealized gains in
market value, net of management fee and taxes, of $3.0 million and $1.1 million
have been included in stockholders' equity for the three month periods ended
March 31, 2006 and 2005, respectively.

     Proceeds from sales of investments available for sale were approximately
$1.5 million for the three month period ended March 31, 2006. There were no
sales of investments available for sale for the three month period ended March
31, 2005. For the first three months of 2006, gross gains on the sale of
investments available for sale amounted to $442,000; there were no gross losses
on the sale of investments available for sale.

C. Investments in Partnerships and Affiliates

     Beginning January 1, 2006, the provisions of FIN 46R and EITF 04-5 have
been adopted and require consolidation of the majority of our investment
partnerships and offshore funds managed by our subsidiaries. However, due to
amendments effected to some of these partnership and offshore fund agreements
during the three month period ended March 31, 2006, consolidation of these
entities ceased on March 31, 2006 in accordance with FIN 46R and EITF 04-5.
Accordingly, these entities are consolidated on our statement of income and our
statement of cash flows for the three months ended March 31, 2006 but not on the
statement of financial condition at March 31, 2006.

     We consolidated five other investment partnerships and two offshore funds
in which we have a direct or indirect controlling financial interest as of and
for the period ended March 31, 2006. These entities have been consolidated
within our financial statements for the first quarter 2006 and will continue to
be consolidated in future periods as long as we continue to maintain a direct or
indirect controlling financial interest. In addition to minor FIN 46R and EITF
04-5 adjustments to the statement of income and statement of cash flows for the
three months ended March 31, 2006 related to these entities, the consolidation
of these entities also resulted in minor adjustments to our statement of
financial condition at March 31, 2006. The consolidation of these entities on
the statement of financial condition has increased assets by $16.5 million,
liabilities by $2.9 million and minority interest by $13.6 million. Prior to
consolidation of these entities, our investments in these entities were
reflected within Investments in partnerships and affiliates on the statement of
financial condition and accounted for under the equity method.

     For the three months ended March 31, 2006, the consolidation of these
entities had no impact on net income but did result in (a) the elimination of
revenues and expenses which are now intercompany transactions; (b) the recording
of all the partnerships' operating expenses of these entities including those
pertaining to third-party interests; (c) the recording of all other income of
these entities including those pertaining to third-party interests; (d)
recording of income tax expense of these entities including those pertaining to
third party interests and (e) the recording of minority interest which offsets
the net amount of any of the partnerships' revenues, operating expenses, other
income and income taxes recorded in these respective line items which pertain to
third-party interest in these entities. While this had no impact on net income,
the consolidation of these entities does affect the classification of income
between operating and other income.

                                       12
<PAGE>
D. Earnings Per Share

     The computations of basic and diluted net income per share are as follows:

                                               Three Months Ended
                                                    March 31,
(in thousands, except per share amounts)       2005 (a)    2006 (a)
                                             ----------  -----------
Basic:
Net income                                   $   12,429  $   18,700
Average shares outstanding                       29,560      29,180
                                             ----------  -----------
Basic net income per share                   $     0.42  $     0.64
                                             ==========  ===========

Diluted:
Net income                                   $   12,429  $   18,700
Add interest expense on 5% convertible note,
net of management fee and taxes                     703         352
                                             ----------  -----------
Total                                        $   13,132  $   19,052
                                             ==========  ===========

Average shares outstanding                       29,560      29,180
Dilutive stock options                              201          43
Assumed conversion of 5% convertible note         1,923         962
                                             ----------  -----------
Total                                            31,684      30,185
                                             ==========  ===========
Diluted net income per share                 $     0.41  $     0.63
                                             ==========  ===========

(a) As restated for the change in accounting method as described in Note A in
item 1 of this report.

E. Stockholders' Equity

     Shares outstanding on March 31, 2006 were 28,774,485, which is
approximately 2.6% lower than shares outstanding of 29,543,017 at the end of
2005 and approximately 5.1% below shares outstanding of 30,321,492 on March 31,
2005. Fully diluted shares outstanding for the first quarter 2006 were
30,185,312 approximately 1.5% lower than fourth quarter 2005 fully diluted
shares of 30,652,102 and approximately 4.7% lower than our fully diluted shares
of 31,684,268 for the first quarter 2005, primarily due to our stock repurchase
program.

     The Board of Directors declared a quarterly dividend of $0.03 per share
that was paid on March 28, 2006 to shareholders of record on March 15, 2006.

Stock Award and Incentive Plan

     Effective January 1, 2003, we adopted the fair value recognition provisions
of SFAS No. 123 in accordance with the transition and disclosure provisions
under the recently issued SFAS No. 148, "Accounting for Stock Based Compensation
- Transition and Disclosure."

     We adopted SFAS 123 (R) on January 1, 2005. In light of our modified
prospective adoption of the fair value recognition provisions of SFAS 123 (R)
for all grants of employee stock options, the adoption of SFAS 123 (R) did not
have a material impact on our consolidated financial statements. During June
2005, we announced that our Board of Directors approved the accelerated vesting
of all unvested stock options. In accordance with Statement of Financial
Accounting Standards ("SFAS") 123(R), the acceleration of vesting resulted in
the recognition of approximately $1.8 million of incremental compensation
expense during the second quarter 2005. For the three months ended March 31,
2006 and 2005, we recognized stock-based compensation expense of $6,000 and
$485,000, respectively. The total compensation costs related to non-vested
awards not yet recognized is approximately $104,000. This will be recognized as
expense in the following periods:

                                       13
<PAGE>

        Remainder
         of 2006          2007            2008            2009
        ---------       ---------       ---------       ---------
         $29,000         $37,000         $32,000         $6,000

     Proceeds from the exercise of 10,000 and 13,475 stock options were $215,000
and $333,000 for the three months ended March 31, 2006 and 2005, respectively,
resulting in a tax benefit to GAMCO of $66,000 and $102,000 for the three months
ended March 31, 2006 and 2005, respectively.

Stock Repurchase Program

     In March 1999, the Board of Directors established the Stock Repurchase
Program to grant us authority to repurchase shares of our Class A common stock.
For the three months ended March 31, 2006, we repurchased 778,532 shares at an
average investment of $44.13. Since the inception of the program we have
repurchased 4,113,158 shares at an average investment of $39.87 per share.
During March 2006, the Board of Directors authorized an additional 500,000
shares to be repurchased. At March 31, 2006, the total shares available under
the program to be repurchased was approximately 804,000.

F. Goodwill

     In accordance with SFAS 142 "Accounting for Goodwill and Other Intangible
Assets," we assess the recoverability of goodwill and other intangible assets at
least annually, or more often should events warrant. There was no impairment
charge recorded for the three months ended March 31, 2006. During the first
quarter of 2005, assets under management for our fixed income business decreased
approximately 42% from the beginning of the year, triggering under our
accounting policies the need to reassess goodwill for this 80% owned subsidiary.
Using a present value cash flow method, we reassessed goodwill for this entity
and determined that the value of the entity no longer justified the amount of
goodwill. Accordingly, we recorded a charge of $1.1 million for the impairment
of goodwill that represented the entire amount of goodwill for this entity
during the first quarter of 2005. At March 31, 2006, there remains $3.5 million
of goodwill related to our 92% owned subsidiary, Gabelli Securities, Inc.

G.  Other Matters

     GBL and certain of its subsidiaries have received, and have been responding
to, information requests and subpoenas from the New York Attorney General's
Office and the SEC requesting documents and testimony on mutual fund share
trading practices. Since this matter is ongoing, we cannot determine at this
time what effect, if any, this matter may have on GBL's financial position or
the results of its operations.

     In November 2002, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness to Others" ("FIN 45"),
which provides accounting, and disclosure requirements for certain guarantees.
The disclosure requirements are effective for financial statements of interim or
annual periods ending after December 15, 2002. The Interpretation's initial
recognition and initial measurement provisions are applicable on a prospective
basis to guarantees issued or modified after December 31, 2002. We indemnify our
clearing brokers for losses they may sustain from the customer accounts
introduced by our broker-dealer subsidiaries. In accordance with NYSE rules
customer balances are typically collateralized by customer securities or
supported by other recourse provisions. In addition, we further limit margin
balances to a maximum of 25% versus 50% permitted under exchange regulations. At
March 31, 2006 and 2005 the total amount of customer balances subject to
indemnification (i.e. margin debits) was immaterial. The Company also has
entered into arrangements with various other third parties which provide for
indemnification against losses, costs, claims and liabilities arising from the
performance of their obligations under our agreement, except for gross
negligence or bad faith. The Company has had no claims or payments pursuant to
these or prior agreements, and we believe the likelihood of a claim being made
is remote. Utilizing the methodology in FIN 45, our estimate of the value of
such agreements is de minimis, and therefore an accrual has not been made in the
financial statements.

                                       14
<PAGE>
H. Subsequent Events

     From April 1 through May 5, 2006, we repurchased 413,400 shares of our
class A common stock, under the Stock Repurchase Program, at an average
investment of $37.04 per share. On May 8, 2006, our Board of Directors
authorized the repurchase of an additional 400,000 shares of our Class A common
stock, bringing the total available authorization to approximately 790,000
shares.

     On May 8, 2006, our Board of Directors declared a quarterly dividend of
$0.03 per share to be paid on June 28, 2006 to shareholders of record on June
15, 2006.

     On May 8, 2006, the SEC declared effective the Company's $400 million
"shelf" registration statement on Form S-3. This provides us opportunistic
flexibility to sell any combination of senior and subordinate debt securities,
convertible debt securities and equity securities (including common and
preferred securities) up to a total amount of $520 million, which includes the
remaining $120 million available under our shelf registration filed in 2001.

                                       15
<PAGE>
     ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS (INCLUDING QUANTITATIVE AND QUALITATIVE
          DISCLOSURES ABOUT MARKET RISK)

Overview

     GAMCO Investors, Inc. (formerly Gabelli Asset Management Inc.) (NYSE: GBL)
is a widely recognized provider of investment advisory services to mutual funds,
institutional and high net worth investors, and investment partnerships. Through
Gabelli & Company, Inc., we provide institutional research services to
institutional clients and investment partnerships. We generally manage assets on
a discretionary basis and invest in a variety of U.S. and international
securities through various investment styles. Our revenues are based primarily
on the firm's levels of assets under management and fees associated with our
various investment products, rather than our own corporate assets.

     Since 1977, we have been identified with and enhanced the "value" style
approach to investing. Our investment objective is to earn a superior
risk-adjusted return for our clients over the long-term through our proprietary
fundamental research. In addition to our value products, we offer our clients a
broad array of investment strategies that include growth, international and
convertible products. We also offer non-market correlated, and fixed income
strategies. By earning returns for our clients, we will be earning returns for
all our constituents.

     As part of our re-branding initiative to accelerate growth, our corporate
name change to GAMCO Investors, Inc. became effective August 29, 2005. Since the
firm was founded in 1977, GAMCO has been the name of our asset management
business, representing our institutional and high net worth effort. We believe
changing our corporate name to GAMCO helps us achieve our vision for assets
entrusted to us, that is, to earn a superior return for our clients by providing
various value-added (alpha) products. GAMCO is a more inclusive parent company
name, and more appropriately represents the various investment strategies and
asset management brands contributing to the continued growth of our company. The
Gabelli brand will continue to represent our absolute return, research driven
Value style that focuses on our unique Private Market Value with a Catalyst (TM)
investment approach. Our class A common stock will continue to trade on the New
York Stock Exchange under the ticker symbol "GBL". As part of this initiative,
the directors of our mutual funds approved in November 2005 the name change of
the Growth, the Global Series, the Mathers and the International Growth funds
(among others) to GAMCO from Gabelli, which became effective in December 2005.
The funds that reflect the Private Market Value with a Catalyst approach will
continue under the Gabelli brand.

     Our revenues are highly correlated to the level of assets under management,
which are directly influenced by the level and changes of the overall equity
markets. Assets under management can also fluctuate through acquisitions, the
creation of new products, the addition of new accounts or the loss of existing
accounts. Since various equity products have different fees, changes in our
business mix may also affect revenues. At times, the performance of our equity
products may differ markedly from popular market indices, and this can also
impact our revenues. It is our belief that general stock market trends will have
the greatest impact on our level of assets under management and hence, revenues.
This becomes increasingly likely as the base of assets grows.

     We conduct our investment advisory business principally through: GAMCO
Asset Management Inc. (Separate Accounts), Gabelli Funds, LLC (Mutual Funds) and
Gabelli Securities, Inc. (Investment Partnerships). We also act as an
underwriter, are a distributor of our open-end mutual funds and provide
institutional research through Gabelli & Company, Inc., our broker-dealer
subsidiary.

                                       16
<PAGE>

     As of March 31, 2006, we had $27.6 billion of assets under management
(AUM), approximately 96.9% of which were in equity products. Our equity open-end
mutual funds and closed-end funds had a record $14.3 billion in AUM at quarter
end, 4.2% above the $13.7 billion on December 31, 2005 and 5.2% ahead of the
$13.6 billion on March 31, 2005. In the institutional and high net worth segment
of our business, GAMCO Asset Management Inc. had AUM of $12.6 billion in
separately managed equity accounts on March 31, 2006, 2.1% ahead of the $12.4
billion on December 31, 2005 but down 5.4% from the $13.4 billion on March 31,
2005. Assets in our investment partnerships were $681 million, 7.4% ahead of
year-end 2005 assets of $634 million but 20.3% below the $854 million on March
31, 2005. Fixed income assets, primarily money market mutual funds, totaled $866
million on March 31, 2006, 5.7% ahead of year-end 2005 assets of $819 million
but 39.0% lower than assets of $1.4 billion on March 31, 2005, which was
principally related to the withdrawal of assets from the Treasurer's Fund, which
was closed during the fourth quarter 2005.

                                       17
<PAGE>
Assets Under Management

     The company reported assets under management as follows:
<TABLE>
<CAPTION>
<S>                                          <C>         <C>                  <C>
Table I:
                                             Assets Under Management (in millions)
                                             ------------------------------------
                                                    March 31
                                             ----------------------       %
                                                2005        2006     Inc. (Dec.)
                                             ----------  ----------  ------------
Mutual Funds:
   Equities
     Open End                                $    7,808  $    8,176           4.7%
     Closed-End                                   4,602       5,284          14.8
     Fixed Income                                 1,154         807         (30.1)
                                             -----------------------
Total Mutual Funds                               13,564      14,267           5.2
                                             -----------------------
Institutional & High Net Worth Separate
 Accounts:
     Equities                                    13,364      12,639          (5.4)
     Fixed Income                                   266          59         (77.8)
                                             -----------------------
Total Institutional & High Net Worth Separate
 Accounts                                        13,630      12,698          (6.8)
                                             -----------------------
Investment Partnerships                             854         681         (20.3)
                                             -----------------------
Total Assets Under Management                $   28,048  $   27,646          (1.4)
                                             =======================

     Equities                                    26,628      26,780           0.6
     Fixed Income                                 1,420         866         (39.0)
                                             -----------------------
Total Assets Under Management                $   28,048  $   27,646          (1.4)
                                             =======================

Table II:                              Fund Flows - 1st Quarter 2006 (in millions)
                                       -------------------------------------------

                                                                            Market
                                        December 31,         Net        Appreciation /      March 31,
                                            2005         Cash Flows      (Depreciation)        2006
                                       --------------- ---------------  ---------------  ----------------
Mutual Funds:
     Equities                          $       12,963           ($220)  $          717   $        13,460
     Fixed Income                                 735              64                8               807
                                       --------------- ---------------  ---------------  ----------------
Total Mutual Funds                             13,698            (156)             725            14,267
                                       --------------- ---------------  ---------------  ----------------
Institutional & HNW Separate Accounts
     Equities                                  12,382            (595)             852            12,639
     Fixed Income                                  84             (26)               1                59
                                       --------------- ---------------  ---------------  ----------------
Total Institutional & HNW Separate
 Accounts                                      12,466            (621)             853            12,698
                                       --------------- ---------------  ---------------  ----------------

Investment Partnerships                           634              22               25               681
                                       --------------- ---------------  ---------------  ----------------
Total Assets Under Management          $       26,798          ($ 755)  $        1,603   $        27,646
                                       =============== ===============  ===============  ================


Table III:                                Assets Under Management (in millions)
                                   ----------------------------------------------------------
                                                                                                       %
                                                                                               Increase/(decrease)
                                      3/05        6/05        9/05        12/05       3/06      12/05     3/05
                                   ----------  ----------  ----------  ----------  ----------  --------  ---------
Mutual Funds
    Open end                       $    7,808  $    7,798  $    7,959  $    7,888  $    8,176       3.7%      4.7%
    Closed-end                          4,602       4,684       4,851       5,075       5,284       4.1      14.8
    Fixed income                        1,154         852         796         735         807       9.8     (30.1)
                                   ----------  ----------  ----------  ----------  ----------
Total Mutual Funds                     13,564      13,334      13,606      13,698      14,267       4.2       5.2
                                   ----------  ----------  ----------  ----------  ----------
Institutional & HNW Separate
 Accounts:
   Equities                            13,364      13,189      13,129      12,382      12,639       2.1      (5.4)
   Fixed Income                           266         269         158          84          59     (29.8)    (77.8)
                                   ----------  ----------  ----------  ----------  ----------
Total Institutional & HNW Separate
Accounts                               13,630      13,458      13,287      12,466      12,698       1.9      (6.8)
                                   ----------  ----------  ----------  ----------  ----------
Investment Partnerships                   854         831         745         634         681       7.4     (20.3)
                                   ----------  ----------  ----------  ----------  ----------
Total Assets Under Management      $   28,048  $   27,623  $   27,638  $   26,798  $   27,646       3.2      (1.4)
                                   ==========  ==========  ==========  ==========  ==========
</TABLE>

                                       18
<PAGE>

Recent regulatory developments

     On September 3, 2003, the New York Attorney General's office ("NYAG")
announced that it had found evidence of widespread improper trading involving
mutual fund shares. These transactions included the "late trading" of mutual
fund shares after the 4:00 p.m. pricing cutoff and "time zone arbitrage" of
mutual fund shares designed to exploit pricing inefficiencies. Since the NYAG's
announcement, the NASD, the SEC, the NYAG and officials of other states have
been conducting inquiries into and bringing enforcement actions related to
trading abuses in mutual fund shares. We have received information requests and
subpoenas from the SEC and the NYAG in connection with their inquiries. We are
complying with these requests for documents and testimony and have been
conducting an internal review of our mutual fund practices and procedures in a
variety of areas with the guidance of outside counsel. A special committee of
all of our independent directors was also formed to review various issues
involving mutual fund share transactions and was assisted by independent
counsel.

     As part of our review, hundreds of documents were examined and
approximately fifteen individuals were interviewed. We have found no evidence
that any employee participated in or facilitated any "late trading". We also
have found no evidence of any improper trading in our mutual funds by our
investment professionals or senior executives. As we previously reported, we did
find that in August of 2002, we banned an account, which had been engaging in
frequent trading in our Global Growth Fund (the prospectus of which did not
impose limits on frequent trading) and which had made a small investment in one
of our hedge funds, from further transactions with our firm. Certain other
investors had been banned prior to that. Since our internal review and requests
from regulators for documents and testimony are ongoing, we can make no
assurances that additional information will not become available or that we will
not become subject to disciplinary action.

     In September 2005, we were informed by the staff of the Securities and
Exchange Commission that they may recommend to the Commission that one of our
advisory subsidiaries be held accountable for the actions of two of the seven
closed-end funds managed by the subsidiary relating to Section 19(a) and Rule
19a-1 of the Investment Company Act of 1940. These provisions require registered
investment companies to provide written statements to shareholders when a
dividend is made from a source other than net investment income. While the funds
sent annual statements containing the required information and 1099 statements
as required by the IRS, the funds did not send written statements to
shareholders with each distribution in 2002 and 2003. The staff indicated that
they may recommend to the Commission that administrative remedies be sought,
including a monetary penalty. The closed-end funds changed their notification
procedures and we believe that all of the funds are now in compliance.

     In response to industry-wide inquiries and enforcement actions, a number of
regulatory and legislative initiatives were introduced. The SEC has proposed and
adopted a number of rules under the Investment Company Act and the Investment
Advisers Act and is currently studying potential major revisions of other rules.
The SEC adopted rules requiring written compliance programs for registered
investment advisers and registered investment companies and additional
disclosures regarding portfolio management and advisory contract renewals. In
addition, several bills were introduced in a prior Congress that, if adopted,
would have amended the Investment Company Act. These proposals, if reintroduced
and enacted, or if adopted by the SEC, could have a substantial impact on the
regulation and operation of our registered and unregistered funds. For example,
certain of these proposals would, among other things, limit or eliminate Rule
12b-1 distribution fees, limit or prohibit third party soft dollar arrangements
and restrict the management of hedge funds and mutual funds by the same
portfolio manager.

     In the coming months, the investment management industry is likely to
continue facing a high level of regulatory scrutiny and become subject to
additional rules designed to increase disclosure, tighten controls and reduce
potential conflicts of interest. In addition, the SEC has substantially
increased its use of focused inquiries in which it requests information from a
number of fund complexes regarding particular practices or provisions of the
securities laws. We participate in some of these inquiries in the normal course
of our business. Changes in laws, regulations and administrative practices by
regulatory authorities, and the associated compliance costs, have increased our
cost structure and could in the future have a material impact.

                                       19
<PAGE>


     The following discussion should be read in conjunction with the Condensed
Consolidated Financial Statements and the notes thereto included in Item 1 to
this report.

RESULTS OF OPERATIONS

To provide a better understanding of core results and trends, we have also
provided our results before adjusting for FASB Interpretation No. 46R ("FIN
46R") and Emerging Issue Task Force 04-5 ("EITF 04-5"). These results, before
the adjustments for FIN 46R and EITF 04-5, are not presented in accordance with
generally accepted accounting principles ("GAAP") in the United States and are
analyzed versus 2005 results beginning on page 18. A reconciliation of these
non-GAAP financial measures to results presented in accordance with GAAP is
presented below.

Three Months Ended March 31, 2006 Compared To Three Months Ended March 31, 2005

Consolidated Results - Three Months Ended March 31st:

                (Unaudited; in thousands, except per share data)
<TABLE>
<CAPTION>
<S>                                          <C>         <C>             <C>     <C>
                                                2005 (a) 2006 (a)(b)    2006 (c)  2006 (d)(a)
                                             ----------  ----------  ----------  ------------
Revenues
  Investment advisory and incentive fees     $   52,713  $   51,361      ($ 963) $    50,398
  Commission revenue                              2,465       3,451           -        3,451
  Distribution fees and other income              5,135       5,435           -        5,435
                                             ----------  ----------  ----------  ------------
     Total revenues                              60,313      60,247        (963)      59,284
Expenses
  Compensation and related costs                 25,622      25,277           -       25,277
  Management fee                                  2,206       3,367           -        3,367
  Distribution costs                              6,213       5,215           -        5,215
  Other operating expenses                        6,556       7,202         189        7,391
                                             ----------  ----------  ----------  ------------
     Total expenses                              40,597      41,061         189       41,250
                                             ----------  ----------  ----------  ------------
Operating income                                 19,716      19,186      (1,152)      18,034
Other income (expense)
Net gain from investments                           595       9,353      13,772       23,125
Interest and dividend income                      3,472       5,048       1,325        6,373
Interest expense                                 (3,929)     (3,284)       (591)      (3,875)
                                             ----------  ----------  ----------  ------------
Total other income (expense), net                   138      11,117      14,506       25,623
                                             ----------  ----------  ----------  ------------
Income before taxes and minority interest        19,854      30,303      13,354       43,657
Income tax provision                              7,445      11,363       5,008       16,371
Minority interest                                   (20)        240       8,346        8,586
                                             ----------  ----------  ----------  ------------
Net income                                   $   12,429  $   18,700          $-  $    18,700
                                             ==========  ==========  ==========  ============

Net income per share:
   Basic                                     $     0.42  $     0.64          $-  $      0.64
                                             ==========  ==========  ==========  ============
   Diluted                                   $     0.41  $     0.63          $-  $      0.63
                                             ==========  ==========  ==========  ============

Reconciliation of Net income to Adjusted
 EBITDA:

Net income                                   $   12,429  $   18,700          $-  $    18,700
Interest Expense                                  3,929       3,284         591        3,875
Income tax provision and minority interest        7,425      11,603      13,354       24,957
Depreciation and amortization                       234         224           -          224
                                             ----------  ----------  ----------  ------------
Adjusted EBITDA(e)                           $   24,017  $   33,811     $13,945  $    47,756
                                             ----------  ----------  ----------  ------------
</TABLE>

(a)  As restated for the change in accounting method as described in note A in
     item 1 of this report.
(b)  Financial results before adjustments of FIN 46R and EITF 04-5. (See note
     (b) below.)
(c)  Adjustments relating to the adoption of FIN 46R and EITF 04-5. Beginning
     January 1, 2006, the provisions of FASB Interpretation No. 46R ("FIN 46R")
     and Emerging Issue Task Force 04-5 ("EITF 04-5") require consolidation of
     the majority of our investment partnerships and offshore funds managed by
     our subsidiaries into our consolidated financial statements. However, since
     we amended the agreements of certain investment partnerships and an
     offshore fund on March 31, 2006, FIN 46R and EITF 04-5 will only require us
     to consolidate these entities on our statement of income for the first
     quarter 2006, but will not require their consolidation on our statement of
     financial condition at March 31, 2006. In addition, these partnerships and
     offshore fund, for which the agreements were amended, are not required to
     be consolidated within our statement of income or on our statement of
     financial condition in future periods as long as we continue to not
     maintain a direct or indirect controlling financial interest. For the three
     months ended March 31, 2006, the consolidation of these entities had no
     impact on net income but does affect the classification of income between
     operating and other income. As a result, we have also provided our results
     before adjusting for FIN 46R and EITF 04-5 as we believe this basis is
     comparable to our reported results for the first quarter 2005. In addition,
     we believe these results will be more comparable to our results in future
     periods as long as we continue to not maintain a direct or indirect
     controlling financial interest.

                                       20
<PAGE>
(d)  Financial results on a GAAP basis, including adjustments of FIN 46R and
     EITF 04-5.
(e)  Adjusted EBITDA is defined as earnings before interest, taxes, depreciation
     and amortization, and minority interest. Adjusted EBITDA is a Non-GAAP
     measure and should not be considered as an alternative to any measure of
     performance as promulgated under accounting principles generally accepted
     in the United States nor should it be considered as an indicator of our
     overall financial performance. We use Adjusted EBITDA as a supplemental
     measure of performance as we believe it gives investors a more complete
     understanding of our operating results before the impact of investing and
     financing activities as a tool for determining the private market value of
     an enterprise.


     Total revenues were $59.3 million in the first quarter of 2006 down $1.0
million or 1.7% from total revenues of $60.3 million reported in the first
quarter of 2005. Operating income was $18.0 million, a decline of $1.7 million
or 8.5% from the $19.7 million reported in the first quarter of 2005. Total
other income, net of interest expense, rose to $25.6 million for the first
quarter 2006. In the short-run, our results remain sensitive to changes in the
equity market. Net income for the quarter was $18.7 million or $0.63 per fully
diluted share versus $12.4 million or $0.41 per fully diluted share in the prior
year's quarter.

     Investment advisory and incentive fees decreased $2.3 million or 4.4% to
$50.4 million from the 2005 quarter. Investment partnership revenues declined to
$0.6 million in the first quarter of 2006 from $2.0 million in the prior year
period, due to the consolidation of the investment partnerships and offshore
fund, in accordance with FIN 46R and EITF 04-5, that resulted in the elimination
of revenues. Our closed-end funds revenue increased 21.6% to $10.3 million in
the first quarter 2006 up from $8.4 million in the prior year's quarter. This
increase was derived principally from The Gabelli Global Gold, Natural Resources
& Income Trust (AMEX: GGN) launched on March 29, 2005. For the first quarter
2006, our revenues of $20.1 million from open-end mutual funds were virtually
unchanged from the prior year period. Revenues from our institutional and high
net worth separate accounts business, which are generally billed based on asset
levels at the beginning of a quarter, declined by 12.4% to $19.4 million in the
first quarter 2006, down from $22.1 million in the 2005 quarter. The majority of
this decline is attributable to lower fulcrum fees from the $2.3 million
recorded in the 2005 period to $0.4 million in the 2006 period.

     Commission revenues from our institutional research affiliate, Gabelli &
Company, Inc., were $3.5 million in the first quarter of 2006, up 40.0% from
$2.5 million in the same period a year earlier.

     Revenues from the distribution of mutual funds and other income were $5.4
million in the first quarter of 2006 versus $5.1 million in the first quarter of
2005. The increase in fees is principally from higher average assets under
management in class C shares, which have 12b-1 fees of 1%, in the 2006 period as
compared to the prior year's period. As previously discussed, several bills were
introduced in the prior Congress that, if adopted, would, among other things,
pose a risk to our future distribution fee revenue as Rule 12b-1 distribution
fees may be limited or eliminated.

     Total expenses, excluding management fee, were $37.9 million in the first
quarter of 2006, a 1.3% decrease from total expenses of $38.4 million reported
in the first quarter of 2005.

     Compensation and related costs, which are largely variable, were $25.3
million or 1.3% lower than the $25.6 million recorded in the same period a year
earlier. This decrease was primarily due to lower revenues versus the prior
year's quarter and accruals for variable compensation.

     Distribution costs were $5.2 million, a decrease of 16.1% from $6.2 million
in the prior year's period, the decrease was principally the result of the
elimination of a one-time charge from the 2005 quarter for one-time launch costs
for GGN. Other operating expenses were higher by $0.8 million, a 12.7% increase
to $7.4 million in the first quarter of 2006 from the prior year first quarter
of $6.6 million. This increase included legal and accounting costs related to
regulatory and corporate governance dynamics. Management fee expense, which is
totally variable and based on pretax income, was $3.4 million in the first
quarter of 2006 versus $2.2 million in the first quarter of 2005.

                                       21
<PAGE>

     Other income, net of interest expense, was $25.6 million in the first
quarter of 2006, a positive swing of $25.5 million from the $0.1 million gain
reported in the first quarter of 2005. The net return from our corporate
investment portfolio improved to $29.5 million in the 2006 first quarter from
$4.1 million in the prior year's quarter as we benefited from the strength of
the equity markets in the first quarter of 2006, including superb performance
from our investments in our products as well as an increase in interest rates
from the prior year as well as the inclusion of $14.5 million relating to
adjustments for FIN 46R and EITF 04-5.

     Interest expense was virtually the same at $3.9 million for both the first
quarter of 2006 and the prior year. The increase related to the consolidation of
the Investment Partnerships and offshore fund was offset principally by the
effects of the April 1, 2005 repurchase of $50 million of the $100 million 5%
convertible note.

     The estimated effective tax rate for the first quarter of 2006 was 37.5%,
the same as the prior year period.

     Minority interest increased to $8.6 million in the 2006 quarter,
principally related to the $8.3 million in adjustments related to the
consolidation of investment partnerships and offshore fund in accordance with
FIN 46R and EITF 04-5.

Comparison of 2006 financial results (before adjustments for FIN 46R and EITF
04-5) to 2005:

     Total revenues were $60.2 million in the first quarter of 2006 down $0.1
million or 0.1% from total revenues of $60.3 million reported in the first
quarter of 2005. Operating income was lower at $19.2 million, a decrease of $0.5
million or 2.7% from the prior year amount of $19.7 million. Total other income,
net of interest expense, rose to $11.1 million for the first quarter 2006 from
$0.1 million in the 2005 period. In the short-run, our results remain sensitive
to changes in the equity market. Net income for the quarter was $18.7 million or
$0.63 per fully diluted share versus $12.4 million or $0.41 per fully diluted
share in the prior year's quarter.

     Investment advisory and incentive fees, which comprised 85.3% of total
revenues, were $51.4 million in the first quarter of 2006 down $1.4 million or
2.6% from the $52.7 million reported in the prior year's quarter. The lower
revenues during the quarter were primarily driven by our institutional and high
net worth separate accounts business, which are generally billed based on asset
levels at the beginning of a quarter, declining by 12.4% to $19.4 million in the
first quarter 2006, down from $22.1 million in the 2005 quarter. The majority of
this decline is attributable to lower fulcrum fees from the $2.3 million
recorded in the 2005 period to $0.4 million in the 2006 period. Our closed-end
funds revenues increased 21.6% to $10.3 million in the first quarter 2006 up
from $8.4 million in the prior year's quarter. This increase was derived
principally from The Gabelli Global Gold, Natural Resources & Income Trust
(AMEX: GGN) launched on March 29, 2005. For the first quarter 2006, our revenues
of $20.1 million from open-end mutual funds were virtually unchanged from the
prior year period.

     Commission revenues from our institutional research affiliate, Gabelli &
Company, Inc., were $3.5 million in the first quarter of 2006, up 40.0% from
$2.5 million in the same period a year earlier.

     Revenues from the distribution of mutual funds and other income were $5.4
million in the first quarter of 2006 versus $5.1 million in the first quarter of
2005. The increase in fees is principally from higher average assets under
management in class C shares, which have 12b-1 fees of 1%, in the 2006 period as
compared to the prior year's period. As previously discussed, several bills were
introduced in the prior Congress that, if adopted, would, among other things,
pose a risk to our future distribution fee revenue as Rule 12b-1 distribution
fees may be limited or eliminated.

     Total expenses, excluding management fee, were $37.7 million in the first
quarter of 2006, a 1.8% decrease from total expenses of $38.4 million reported
in the first quarter of 2005.

     Compensation and related costs, which are largely variable, were $25.3
million or 1.3% lower than the $25.6 million recorded in the same period a year
earlier. This decrease was primarily due to lower revenues versus the prior
year's quarter and accruals for variable compensation costs.

                                       22
<PAGE>

     Distribution costs were $5.2 million, a decrease of 16.1% from $6.2 million
in the prior year's period, the decrease was principally the result of the
elimination of a one-time charge from the 2005 quarter for one-time launch costs
for GGN. Other operating expenses were higher by $0.6 million, a 9.9% increase
to $7.2 million in the first quarter of 2006 from the prior year first quarter
of $6.6 million. This increase included legal and accounting costs related to
regulatory and corporate governance dynamics, including Sarbanes-Oxley
compliance. Management fee expense, which is totally variable and based on
pretax income, was $3.5 million in the first quarter of 2006 versus $2.3 million
in the first quarter of 2005.

     Other income, net of interest expense, was $11.1 million in the first
quarter of 2006, a positive swing of $11.0 million from the $0.1 million gain
reported in the first quarter of 2005. The net return from our corporate
investment portfolio improved to $14.4 million in the 2006 first quarter from
$4.1 million in the prior year's quarter as we benefited from the strength of
the equity markets in the first quarter of 2006, including superb performance
from our investments in our products as well as an increase in interest rates
from the prior year.

     Interest expense fell to $3.3 million in the first quarter of 2006 from
$3.9 million in the prior year's first quarter. This decrease is a result of the
April 1, 2005 repurchase of $50 million of the $100 million 5% convertible note
and the remarketing of the senior notes in November 2004, which reduced the
interest rate from 6.0% to 5.22%.

     The estimated effective tax rate for the first quarter of 2006 was 37.5%,
the same as the prior year period.

LIQUIDITY AND CAPITAL RESOURCES

     Our assets are primarily liquid, consisting mainly of cash, short term
investments, securities held for investment purposes and investments in
partnerships and affiliates in which we are a general partner, limited partner
or investment manager. Investments in partnerships and affiliates are generally
illiquid, however the underlying investments in such entities are generally
liquid and the valuations of the investment partnerships and affiliates reflect
this underlying liquidity.

Summary cash flow data is as follows:

                                                    Three Months Ended
                                                         March 31,
                                                  -----------------------
                                                    2005 (a)    2006 (a)
                                                  ----------  -----------
Cash flows (used in) provided by:                     (in thousands)
   Operating activities                           $   28,988  $  (39,590)
   Investing activities                               (3,944)     (1,520)
   Financing activities                               50,804      (6,827)
                                                  ----------  -----------
   Increase (decrease)                                75,848     (47,937)
   Net increase in cash from investment
    partnerships and offshore funds consolidated
    under FIN 46R and EITF 04-5                            -       1,550
   Effect of exchange rates on cash and cash
    equivalents                                          (17)         68
   Cash and cash equivalents at beginning of
    period                                           257,096     173,161
                                                  ----------  -----------
   Cash and cash equivalents at end of period     $  332,927  $  126,842
                                                  ==========  ===========

(a)  As restated for (1) the change in accounting method which was previously
     reported on Form 10-Q/A (Amendment No. 2) filed with the Securities and
     Exchange Commission on November 9, 2006 as described in Note A in item 1 of
     this report on Form 10-Q/A, and (2) the reporting of individual assets and
     liabilities of certain proprietary investment accounts as described in Note
     A in item 1 of this report on Form 10-Q/A.

     Cash requirements and liquidity needs have historically been met through
cash generated by operating activities and through our borrowing capacity. We
have received investment grade ratings from both Moody's Investors Services and
Standard & Poor's Rating Services. These investment grade ratings expand our
ability to attract both public and private capital. In February 2005, our Board
of Directors authorized a plan to file a "shelf" registration statement on Form
S-3, which was filed on June 13, 2005. Our shelf registration, which was
declared effective on May 8, 2006, provides us opportunistic flexibility to sell
any combination of senior and subordinate debt securities, convertible debt
securities, equity securities (including common and preferred stock), and other
securities up to a total amount of $400 million. This authorization is in
addition to the remaining $120 million available under our "shelf" registration
filed in 2001.

                                       23
<PAGE>

     At March 31, 2006, we had total cash and cash equivalents of $126.8
million, a decrease of $46.3 million from December 31, 2005. Gabelli has
established a collateral account, consisting of cash and cash equivalents and
investments in securities totaling $52.3 million, to secure a letter of credit
issued in favor of the holder of the $50 million 5% convertible note. On April
1, 2005, the letter of credit was reduced to $51.3 million and extended to
September 22, 2006, which coincides with the date of a put option the note
holder may exercise. Additionally, the principal of the convertible note was
reduced to $50 million and limitations on the issuance of additional debt were
removed. Cash and cash equivalents and investments in securities held in the
collateral account are restricted from other uses until the date of expiration
and cash and cash equivalents and investments in securities held by investment
partnerships and offshore funds consolidated under FIN 46R and EITF 04-5 are
also restricted from use for general operating purposes. Total debt at March 31,
2006 was $232.3 million, consisting of the $50 million 5% convertible note, $100
million of 5.5% non-callable senior notes due May 15, 2013 and $82.3 million in
5.22% senior notes due February 17, 2007, issued pursuant to our mandatory
convertible securities.

     For 2006, cash used in operating activities was $39.6 million principally
resulting from $287.6 million in purchases of investments in securities, a $62.9
million increase in receivable from brokers, $1.2 million in purchases of
investments in partnerships and affiliates and $38.4 million from the net
effects of the FIN 46R and EITF 04-5 consolidation. This was partially offset by
$18.7 million in net income, proceeds from sales of investments in securities of
$321.5 million, $1.0 million in distributions from investments in partnerships
and affiliates and an increase in minority interest payable of $0.2 million.
Excluding the net effects of the consolidation of investment partnerships and
offshore funds, our cash used in operating activities was $1.2 million.

     Cash used in investing activities, related to purchases and sales of
available for sale securities, was $1.5 million in the first three months of
2006.

     Cash used in financing activities in the first three months of 2006 was
$6.8 million. The decrease in cash principally resulted from net contributions
of $28.2 million related to investment partnerships and offshore funds
consolidated under FIN 46R and EITF 04-5. This was partially offset by $35.2
million in dividends paid and the repurchase of our class A common stock under
the Stock Repurchase Program and by the $0.2 million received from the exercise
of non-qualified stock options that further generated cash tax savings of $0.1
million. Excluding the net effects of the consolidation of investment
partnerships and offshore funds, our net cash used in financing activities was
$35.0 million.

     For 2005, cash provided by operating activities was $29.0 million
principally resulting from proceeds from sales of investments in securities of
$407.6 million, $29.6 million in distributions from investments in partnerships
and affiliates and $12.4 million in net income partially offset by $400.4
million in purchases of investments in securities, a $22.1 million increase in
receivable from brokers and $6.6 million in purchases of investments in
partnerships and affiliates.

     Cash used in investing activities, related to purchases and sales of
available for sale securities, was $3.9 million in the first three months of
2005.

     Cash provided by financing activities in the first three months of 2005 was
$50.8 million. The increase in cash principally resulted from the $70.6 million
in proceeds from the issuance of 1.5 million shares of class A common stock in
settlement of the purchase contracts issued pursuant to our mandatory
convertible securities and $0.3 million received from the exercise of
non-qualified stock options that further generated cash tax savings of $0.1
million partially offset by $18.0 million in dividends paid and the repurchase
of our class A common stock under the Stock Repurchase Program of $2.1 million.

     Based upon our current level of operations and anticipated growth, we
expect that our current cash balances plus cash flows from operating activities
and our borrowing capacity will be sufficient to finance our working capital
needs for the foreseeable future. We have no material commitments for capital
expenditures.

                                       24
<PAGE>

     Gabelli & Company, Inc., a subsidiary of Gabelli, is registered with the
Securities and Exchange Commission as a broker-dealer and is a member of the
National Association of Securities Dealers. As such, it is subject to the
minimum net capital requirements promulgated by the Commission. Gabelli &
Company's net capital has historically exceeded these minimum requirements.
Gabelli & Company computes its net capital under the alternative method
permitted by the Commission, which requires minimum net capital of the greater
of $250,000 or 2% of the aggregate debt items in the reserve formula for those
broker-dealers subject to Rule 15c3-3. The requirement was $250,000 at March 31,
2006. At March 31, 2006, Gabelli & Company had net capital, as defined, of
approximately $17.2 million, exceeding the regulatory requirement by
approximately $16.9 million. Regulatory net capital requirements increase when
Gabelli & Company is involved in underwriting activities.

Market Risk

     Our primary market risk exposure is to changes in equity prices and
interest rates. Since over 95% of our AUM are equities, our financial results
are subject to equity-market risk as revenues from our money management services
are sensitive to stock market dynamics. In addition, returns from our
proprietary investment portfolio are exposed to interest rate and equity market
risk.

     We are subject to potential losses from certain market risks as a result of
absolute and relative price movements in financial instruments due to changes in
interest rates, equity prices and other factors. Our exposure to market risk is
directly related to our role as financial intermediary, advisor and general
partner for assets under management in our mutual funds, institutional and
separate accounts business, investment partnerships and our proprietary
investment activities.

     With respect to our proprietary investment activities, included in
investments in securities of $412.0 million at March 31, 2006 were investments
in Treasury Bills and Notes of $195.1 million, in mutual funds, largely invested
in equity products, of $107.7 million, a selection of common and preferred
stocks totaling $85.6 million and other investments of approximately $23.6
million. Investments in mutual funds generally lower market risk through the
diversification of financial instruments within their portfolio. In addition, we
may alter our investment holdings from time to time in response to changes in
market risks and other factors considered appropriate by management. Of the
approximately $85.6 million invested in common and preferred stocks at March 31,
2006, $23.0 million is related to our investment in Westwood Holdings Group Inc.
and $22.4 million is invested in risk arbitrage opportunities in connection with
mergers, consolidations, acquisitions, tender offers or other similar
transactions. Investments in partnerships and affiliates totaled $89.3 million
at March 31, 2006, the majority of which consisted of investment partnerships
and offshore funds which invest in risk arbitrage opportunities. These
transactions generally involve announced deals with agreed upon terms and
conditions, including pricing, which typically involve less market risk than
common stocks held in a trading portfolio. The principal risk associated with
risk arbitrage transactions is the inability of the companies involved to
complete the transaction.

     GAMCO's exposure to interest rate risk results, principally, from its
investment of excess cash in U.S. Government obligations. These investments are
primarily short term in nature and the carrying value of these investments
generally approximates market value.

     Our revenues are largely driven by the market value of our assets under
management and are therefore exposed to fluctuations in market prices.
Investment advisory fees for mutual funds are based on average daily asset
values. Management fees earned on institutional and high net worth separate
accounts, for any given quarter, are generally determined based on asset values
on the last day of the preceding quarter. Any significant increases or decreases
in market value of institutional and high net worth separate accounts assets
managed which occur on the last day of the quarter will generally result in a
relative increase or decrease in revenues for the following quarter.

Recent Accounting Developments

     We adopted SFAS 123 (R) on January 1, 2005. In light of our modified
prospective adoption of the fair value recognition provisions of SFAS 123 (R)
for all grants of employee stock options, the adoption of SFAS 123 (R) did not
have a material impact on our consolidated financial statements.

                                       25
<PAGE>

     In January 2003 the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" which was subsequently revised in December 2003 by
FASB Interpretation No. 46(R) ("FIN 46R"). FIN 46R provides new criteria for
determining whether or not consolidation accounting is required for activities
that were prior to FIN 46R off-balance sheet activities conducted through
certain types of entities. This interpretation focuses on financial interests in
entities (i.e., variable interests) that indicate control despite the absence of
clear control through voting interest. It concludes that a company's exposure
(variable interest) to the economic risks and rewards from the entity's assets
and activities are the best evidence of control. The interpretation requires
that these variable interest entities ("VIEs") be subject to consolidation if
the company holding the variable interest is subject to a majority of the
expected losses or will receive a majority of the expected residual returns of
the VIE (the "primary beneficiary"). As the primary beneficiary, it would be
required to include the variable interest entity's assets, liabilities and
results of operations in its own financial statements.

     In June 2005, the FASB ratified the consensus EITF 04-5, "Determining
Whether a General Partner, or the General Partners as a Group, Controls a
Limited Partnership or Similar Entity When the Limited Partners Have Certain
Rights", which provides guidance in determining whether a general partner
controls a limited partnership. The provisions of EITF 04-5 are not applicable
to limited partnerships or similar entities accounted for as VIEs pursuant to
FIN 46R.

     We adopted FIN 46R and EITF 04-5 on January 1, 2006 and have, in accordance
with the terms of the provisions of these pronouncements, consolidated the
majority of our investment partnerships and offshore funds that are managed by
our subsidiaries and are not determined to be VIEs for the three months ended
and at March 31, 2006. However, due to amendments effected to some of these
partnership and offshore fund agreements during the three month period ended
March 31, 2006, consolidation of these entities ceased on March 31, 2006 in
accordance with FIN 46R and EITF 04-5. Accordingly, these entities are
consolidated on our statement of income for the three months ended March 31,
2006 but not on the statement of financial condition at March 31, 2006.

     We have also consolidated five other investment partnerships and two other
offshore funds in which we have a direct or indirect controlling financial
interest within our consolidated financial statements as of and for the period
ended March 31, 2006. These entities will continue to be consolidated in future
periods as long as we continue to maintain a direct or indirect controlling
financial interest.

     In November 2005, the FASB issued FSP FAS 115-1, "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments."
This FSP addresses the determination of when an investment is considered
impaired, whether that impairment is other than temporary, and the measurement
of an impairment loss. The FSP also includes considerations for the accounting
subsequent to the recognition of an other-than-temporary ("OTT") impairment and
requires certain disclosures about unrealized losses that have not been
recognized as OTT impairments. The guidance in this FSP amends FASB Statements
No. 115, "Accounting for Certain Investments in Debt and Equity Securities," and
No. 124, "Accounting for Certain Investments Held by Not-for-Profit
Organizations," and APB Opinion No. 18, "The Equity Method of Accounting for
Investments in Common Stock." The FSP is effective for reporting periods
beginning after December 15, 2005. The Company adopted this Statement on January
1, 2006. The adoption is not expected to have a material impact on the Company's
future consolidated financial statements.

     In February 2006, the FASB issued FASB Statement No. 155, "Accounting for
Certain Hybrid Financial Instruments - an amendment of FASB Statement No. 133
and 140," that amends FASB Statements No. 133 "Accounting for Derivative
Instruments and Hedging Activities," and No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." The Statement
permits fair value remeasurement for any hybrid financial instrument that
contains an embedded derivative that otherwise would require bifurcation;
clarifies which interest-only strips and principle-only strips are not subject
to the requirements of Statement 133; establishes a requirement to evaluate
interests in securitized financial assets to identify interests that are
freestanding derivatives or that are hybrid financial instruments that contain
an embedded derivative requiring bifurcation; Clarifies that concentrations of
credit risk in the form of subordination are not embedded derivatives; amends
Statement 140 to eliminate the prohibition on a qualifying special-purpose
entity from holding a derivative financial instrument that pertains to a
beneficial interest other than another derivative financial instrument.
Statement 155 does not permit prior period restatement. The Statement is
effective for all financial instruments acquired or issued after the beginning
of an entity's first fiscal year that begins after September 15, 2006. The
Company plans to adopt this Statement on January 1, 2007. The adoption is not
expected to have a material impact on the Company's future consolidated
financial statements.

                                       26
<PAGE>

     In March 2006, the FASB issued FASB Statement No. 156, "Accounting for
Servicing of Financial Assets," which amends FASB Statements No. 140 "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." The Statement permits an entity to choose either the amortization
method or fair value measurement method for each class of separately recognized
servicing assets and servicing liabilities. The Statement is effective as of the
beginning of an entity's first fiscal year that begins after September 15, 2006.
The Company plans to adopt this Statement on January 1, 2007. The adoption is
not expected to have a material impact on the Company's future consolidated
financial statements.

         In April 2006, the FASB issued FSP FIN 46R-6 "Determining the
Variability to be Considered in Applying FASB Interpretation No. 46(R)." The FSP
addresses certain major implementation issues related to FIN 46R, specifically
how a reporting enterprise should determine the variability to be considered in
applying FIN 46R. The FSP is effective as of the beginning of the first day of
the first reporting period beginning after June 15, 2006. The Company plans to
adopt this Statement on January 1, 2007. The adoption is not expected to have a
material impact on the Company's future consolidated financial statements.

Item 4. Controls and Procedures

     Management, with the participation of the Chief Executive Officer and under
the supervision of the Chief Financial Officer, has evaluated the effectiveness
of the Company's disclosure controls and procedures, as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as of December 31, 2006. In conducting the
aforementioned evaluation and assessment, management identified two material
weaknesses in internal control over financial reporting relating to (i) the
reporting of individual assets and liabilities of certain proprietary investment
accounts in accordance with U.S. generally accepted accounting principles and
(ii) the evaluation of and accounting for certain non-routine transactions in
accordance with U.S. generally accepted accounting principles, as further
described Item 9A (b) of the Company's Form 10-K. These deficiencies were
identified during the course of the 2006 audit. Accordingly, because of these
material weaknesses, management concluded that the Company's disclosure controls
and procedures were not effective, with respect to these items, as of December
31, 2006.

     As a result of the first material weakness, the Company restated its
December 31, 2005 consolidated financial statements, included in Item 8 of the
Company's Form 10-K, to properly reflect these proprietary investments. This
first material weakness also resulted in errors in the Company's interim
consolidated financial statements for the periods ended March 31, 2006, June 30,
2006, and September 30, 2006.

     Based upon the evaluation described above, management concluded that, as of
March 31, 2006, the Company did not maintain effective internal control over
financial reporting because of the effect of the material weaknesses described
above.

     However, subsequent to December 31, 2006, we have taken steps to strengthen
our disclosure controls, procedures and internal controls over financial
reporting. These steps were taken to strengthen our processes relating to the
material weaknesses discussed above. Specifically, we have implemented or are in
the process of implementing the following internal control improvements:

     o    With regard to the first material weakness, we have implemented a new
          procedure to review the accounting treatment for all proprietary
          investments on a regular basis. We have also worked with the personnel
          in our operations and accounting areas who are responsible for the
          accounting for these proprietary investments to ensure that
          appropriate procedures are in place to more closely monitor
          proprietary investments. Although these design changes have been
          implemented, management has not had the opportunity to evaluate the
          operating effectiveness of these revised controls.

     o    With regard to the second material weakness, we are formalizing the
          process for identifying and evaluating non-routine and/or
          non-recurring transactions to ensure that the revised procedures will
          detect such transactions on a timely basis and ensure adequate
          evaluation for conformity with U.S. generally accepted accounting
          principles. This process is expected to be fully implemented in the
          first half of 2007.

                                       27
<PAGE>

Forward-Looking Information

     Our disclosure and analysis in this report contain some forward-looking
statements. Forward-looking statements give our current expectations or
forecasts of future events. You can identify these statements because they do
not relate strictly to historical or current facts. They use words such as
"anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and
other words and terms of similar meaning. They also appear in any discussion of
future operating or financial performance. In particular, these include
statements relating to future actions, future performance of our products,
expenses, the outcome of any legal proceedings, and financial results. Although
we believe that we are basing our expectations and beliefs on reasonable
assumptions within the bounds of what we currently know about our business and
operations, there can be no assurance that our actual results will not differ
materially from what we expect or believe. Some of the factors that could cause
our actual results to differ from our expectations or beliefs include, without
limitation: the adverse effect from a decline in the securities markets; a
decline in the performance of our products; a general downturn in the economy;
changes in government policy or regulation; changes in our ability to attract or
retain key employees; and unforeseen costs and other effects related to legal
proceedings or investigations of governmental and self-regulatory organizations.
We also direct your attention to any more specific discussions of risk contained
in our Form 10-K and other public filings. We are providing these statements as
permitted by the Private Litigation Reform Act of 1995. We do not undertake to
update publicly any forward-looking statements if we subsequently learn that we
are unlikely to achieve our expectations or if we receive any additional
information relating to the subject matters of our forward-looking statements.

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<PAGE>

Part II: Other Information

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

     The following table provides information with respect to the shares of
common stock we repurchased during the three months ended March 31, 2006:
<TABLE>
<CAPTION>
<S>  <C>  <C>  <C>          <C>     <C>                        <C>              <C>
                                                  (c) Total Number of (d) Maximum Number
                    (a) Total      (b) Average     Shares Repurchased  of Shares That May
                     Number of      Price Paid Per as Part of Publicly Yet Be Purchased
                     Shares         Share, net of  Announced Plans or  Under the Plans or
Period               Repurchased    Commissions    Programs            Programs
------------------------------------------------------------------------------------------
GBL

1/01/06 - 1/31/06           36,000  $       44.18              36,000           1,046,793
2/01/06 - 2/28/06          543,632  $       44.62             543,632             503,161
3/01/06 - 3/31/06          198,900  $       42.77             198,900             804,261
                    ---------------               --------------------
Totals                     778,532                            778,532
                    ===============               ====================
</TABLE>


     In March 2006 we announced an increase of 500,000 shares of GBL available
to be repurchased under our stock repurchase program. Our stock repurchase
programs are not subject to expiration dates.


     Item 6. (a) Exhibits

          18.1 Preferability letter

          31.1 Certification by Chief Executive Officer Pursuant to Rule 13a-14
               (a) and 15d-14 (a) as Adopted Pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002

          31.2 Certification by Interim Chief Financial Officer Pursuant to Rule
               13a-14 (a) and 15d-14 (a) as Adopted Pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002

          32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
               Section 1350, as adopted pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002

          32.2 Certification of Interim Chief Financial Officer pursuant to 18
               U.S.C. Section 1350, as adopted pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002

                                       29
<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.


                                                GAMCO INVESTORS, INC.
                                        ----------------------------------------
                                                   (Registrant)


April 13, 2007                                /s/John C. Ferrara
--------------                          ----------------------------------------
    Date                                         John C. Ferrara
                                                 Interim Chief Financial Officer




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