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


                                    FORM 10-Q


                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended   December 31, 1995       Commission file number   1-7421



                          PIPER JAFFRAY COMPANIES INC.
             (Exact name of Registrant as specified in its charter)



 Delaware                                                          41-1233380
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                           Identification No.)


 Piper Jaffray Tower, 222 South 9th Street, Minneapolis, Minnesota    55402
(Address of principal executive offices)                           (Zip Code)


Registrant's telephone number, including area code:    (612) 342-6000




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


As of December 31, 1995, 17,569,201 shares of the Registrant's common stock were
issued and outstanding.


<PAGE>


                          PIPER JAFFRAY COMPANIES INC.

                                      INDEX


                                                                      Page
                                                                     Number


Part I. FINANCIAL INFORMATION

    Item 1. Financial Statements

            Consolidated Statements of Financial Condition             3

            Consolidated Statements of Operations                      4

            Consolidated Statements of Cash Flows                      5

            Notes to Consolidated Financial Statements                 6


    Item 2. Management's Discussion and Analysis of Financial
            Condition and Results of Operations                        8


Part II.    OTHER INFORMATION

    Item 1. Legal Proceedings                                          9

    Item 4. Submission of Matters to a Vote of Security Holders       25

    Item 6. Exhibits and Reports on Form 8-K                          26

    Signatures                                                        27

    Index of Exhibits                                                 28

    Exhibits                                                          29


<PAGE>



PART I.  FINANCIAL INFORMATION


Item 1.  Financial Statements

                          PIPER JAFFRAY COMPANIES INC.

                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                 (In Thousands)

                                                           Dec. 31,    Sept. 30,
                                                             1995        1995
                                                         (Unaudited)
ASSETS
  Cash (including $2,431 and $2,401, respectively,
   required to be segregated under federal and
   other regulations) ................................   $  25,665    $  17,345
  Receivable from other brokers and dealers ..........     112,417       55,708
  Receivable from customers ..........................     437,830      371,667
  Trading securities owned, at market ................      75,750       58,651
  Investments pursuant to mortgage-backed bonds ......      51,811       52,949
  Office equipment and leasehold improvements,
   at cost, less accumulated depreciation of
   $49,330 and $47,621, respectively .................      26,609       25,764
  Deferred income tax asset ..........................      31,942       40,093
  Other assets .......................................      61,024       57,586
                                                         ---------    ---------
                                                         $ 823,048    $ 679,763
                                                         =========    =========

LIABILITIES AND SHAREHOLDERS' EQUITY
  Short-term borrowings ..............................   $ 194,082    $  63,781
  Checks and drafts payable ..........................      62,275       44,201
  Payable to other brokers and dealers ...............      67,102       84,447
  Payable to customers ...............................     105,583       78,874
  Trading securities sold but not yet purchased,
   at market .........................................      14,971       21,491
  Mortgage-backed bonds payable ......................      52,889       54,077
  Employee compensation ..............................      62,761       63,678
  Federal and state income taxes .....................          --       19,136
  Other liabilities ..................................     101,269       94,354
                                                         ---------    ---------
                                                           660,932      524,039
                                                         ---------    ---------
  Shareholders' equity:
   Preferred stock, $1 par value; authorized,
    300,000 shares; none issued and outstanding ......          --           --
   Common stock, $1 par value; authorized 40,000,000
    shares; 17,569,201 and 17,565,399 shares issued,
    respectively .....................................      17,569       17,566
   Additional paid-in capital ........................      11,905       11,901
   Retained earnings .................................     132,644      127,306
   Treasury stock, at cost; 133 and
    65,145 shares, respectively ......................          (2)      (1,049)
                                                         ---------    ---------
                                                           162,116      155,724
                                                         ---------    ---------
                                                         $ 823,048    $ 679,763
                                                         =========    =========

          See accompanying notes to consolidated financial statements.

<PAGE>



                          PIPER JAFFRAY COMPANIES INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In Thousands, Except Per Share Amounts)
                                   (Unaudited)

                                                             Three Months Ended
                                                                 December 31,
                                                             1995          1994
REVENUE

Commissions ..........................................     $ 42,646     $ 32,158
Profits on principal transactions ....................       40,915       25,935
Investment banking ...................................       25,023       11,408
Interest .............................................        9,463        7,936
Asset management fees ................................        9,574       11,803
Other income .........................................        4,905        3,259
                                                           --------     --------
    Total revenue ....................................      132,526       92,499
                                                           --------     --------

EXPENSES

Employee compensation ................................       81,486       55,974
Floor brokerage and clearance ........................        2,104        1,705
Interest .............................................        3,043        2,847
Occupancy and equipment ..............................        8,140        6,709
Communications .......................................        4,798        3,880
Travel and promotional ...............................        3,618        3,752
Other operating expenses .............................       18,429       10,010
                                                           --------     --------
    Total expenses ...................................      121,618       84,877
                                                           --------     --------

Income before income taxes ...........................       10,908        7,622

Income taxes .........................................        4,254        2,972
                                                           --------     --------

Net income ...........................................     $  6,654     $  4,650
                                                           ========     ========


Net income per common and common equivalent
   share (primary and fully diluted) .................     $    .37     $    .27

Weighted average number of common and common
   equivalent shares outstanding .....................       18,037       17,400

Dividends per share ..................................     $   .075     $   .075

          See accompanying notes to consolidated financial statements.


<PAGE>



                          PIPER JAFFRAY COMPANIES INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

                                   (Unaudited)
                                                             Three Months Ended
                                                                December 31,
                                                            1995           1994
Operating activities:
   Net income ........................................   $   6,654    $   4,650
   Adjustments to reconcile net income to
    net cash provided by operating activities:
      Depreciation and amortization ..................       1,773        1,771
      Deferred income taxes ..........................       8,151        2,712
      (Increase) decrease in:
       Net receivable from customers .................     (39,454)       2,216
       Net trading securities ........................     (23,619)     (22,534)
       Other .........................................       3,835       (8,861)
      Increase (decrease) in:
       Net payable to other brokers and dealers ......     (74,054)     (11,755)
       Checks and drafts payable .....................      18,074        5,974
       Employee compensation .........................        (917)     (10,267)
       Federal and state income taxes payable ........     (19,136)        (773)
                                                         ---------    ---------
        Net cash used in operating activities ........    (118,693)     (36,867)
                                                         ---------    ---------

Financing activities:
   Net change in:
    Short-term borrowings ............................     130,301       55,331
    Mortgage-backed bonds payable ....................      (1,188)      40,297
    Investments and funds pursuant to
     mortgage-backed bonds ...........................       1,138      (39,410)
   Net common stock issued ...........................       1,153         (210)
   Payments made on capitalized lease obligations ....        (358)        (394)
   Treasury shares repurchased .......................         (99)        (360)
   Dividends paid ....................................      (1,316)      (1,281)
                                                         ---------    ---------
        Net cash provided by financing activities ....     129,631       53,973
                                                         ---------    ---------

   Net cash used for purchase of office
    equipment and leasehold improvements .............      (2,618)      (1,507)
                                                         ---------    ---------

   Net increase in cash ..............................       8,320       15,599
   Cash at beginning of period .......................      17,345       12,070
                                                         ---------    ---------
   Cash at end of period .............................   $  25,665    $  27,669
                                                         =========    =========

   Supplemental  disclosure of cash flow  information Cash paid during the three
   months ended for:
    Interest .........................................   $   2,904    $   2,542
    Income taxes .....................................   $  18,346    $   1,034

         See accompanying notes to consolidated financial statements.


<PAGE>





                          PIPER JAFFRAY COMPANIES INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     Three Months Ended December 31, 1995



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying  consolidated  financial  statements of Piper Jaffray Companies
Inc. and its subsidiaries  (the "Company") have been prepared in conformity with
generally accepted accounting  principles and should be read in conjunction with
the Company's  Annual Report for the year ended  September 30, 1995. The results
of operations for the three months ended December 31, 1995, are not  necessarily
indicative of the results to be expected for the year ending September 30, 1996.

The  consolidated  statement of financial  condition as of December 31, 1995 and
the other consolidated  financial information for the periods ended December 31,
1995 and 1994, is  unaudited,  but  management of the Company  believes that all
adjustments  (consisting  of normal  recurring  accruals)  necessary  for a fair
statement of the results of operations for the periods have been included.

Net income per common and common  equivalent share is calculated by dividing net
income by the  weighted  average  number  of  common  shares  and  common  share
equivalents  outstanding,  which includes the dilutive effect of all outstanding
stock options.


2. NET CAPITAL REQUIREMENTS

At December 31, 1995, the Company's broker-dealer subsidiary's net capital under
applicable  regulations was $101.2 million, or 22.4% of aggregate debit balances
and $92.2 million in excess of the minimum required net capital.


3. LITIGATION AND CONTINGENCIES

The Company is currently a defendant in lawsuits and arbitrations and is subject
to  regulatory  inquiries  related to various  funds or assets  managed by Piper
Capital. In addition, management is aware of unasserted claims which may contain
similar  allegations.  The Company is also a defendant in two cases involving an
underwriting  by Piper  Jaffray Inc.  (Piper  Jaffray).  The Company  intends to
defend, or in some cases negotiate to settle these actions.  It is impossible to
predict the outcome of these  actions,  and, at the present time,  the effect of
these actions on the  consolidated  financial  statements  cannot be determined.
Accordingly,  no provision  for losses that may result has been  recorded in the
consolidated financial statements. However, the aggregate cost of litigation and
any judgments,  settlements or regulatory  action  relating to these cases could
have a material adverse effect on the consolidated financial statements.





<PAGE>


4. SHAREHOLDERS' EQUITY

During the three months ended  December 31, 1995,  7,500 shares of the Company's
common stock were repurchased by the Company pursuant to the Board of Directors'
authorizations  to  repurchase  common  stock to satisfy  employee  benefit plan
obligations.

    Common shares authorized for repurchase - fiscal years:
      1992                                            400,000
      1994                                            500,000
                                                      -------
                                                                  900,000

    Common shares repurchased - fiscal years
      1992                                            201,000
      1993                                                 --
      1994                                            378,100
      1995                                             35,900
      1996                                              7,500
                                                      -------
                                                                  622,500
                                                                  -------

    Common shares available at December 31, 1995 for
      repurchase pursuant to authorizations                       277,500
                                                                  =======

    Total common shares repurchased                               622,500

    Treasury shares reissued - fiscal years:
      1992                                              6,262
      1993                                            194,738
      1994                                            104,740
      1995                                            244,115
      1996                                             72,512
                                                      -------
                                                                  622,367
                                                                  -------

    Treasury shares outstanding at December 31, 1995                  133
                                                                  =======


On January 23,  1996,  the Board of Directors  authorized  the  contribution  of
approximately  $14.2 million to the Piper Jaffray Companies ESOP for fiscal year
1995 to be made 50 percent in cash and 50 percent in the Company's  newly issued
common stock, thus adding approximately $7.1 million in additional shareholders'
equity during the second quarter of fiscal 1996.



<PAGE>


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

This  discussion  should  be read in  conjunction  with  Management's  Financial
Discussion contained in the Company's Annual Report for the year ended September
30, 1995.


OPERATIONS

The Company's revenue for the three months ended December 31, 1995 increased 43%
over the same period of the prior fiscal year to $132.5 million.  Net income for
the first  quarter was $6.7  million,  up 43% from $4.7 million  recorded in the
first  quarter of fiscal 1995.  The Company's net income per share for the first
three months was $ .37, up 37% from $ .27 a year earlier.

Commissions,  profits on principal  transactions and investment banking revenues
for the quarter ended December 31, 1995 exceeded those of the same period of the
prior  fiscal  year by 33%,  58%,  and 119%,  respectively,  in line with recent
strength in the securities  markets.  Asset management revenue decreased 19% for
the quarter  ended  December 31, 1995 compared to the same period in fiscal 1995
due to a  decline  in  assets  under  management  by  Piper  Capital  Management
Incorporated  (Piper Capital) to $9.3 billion from $10.3 billion a year earlier.
The decrease in assets  under  management  was due  primarily to mutual fund net
redemptions  resulting  from the  reorganization  of  various  closed end funds.
Interest  income was up 19% to $9.5 million for the quarter  ended  December 31,
1995 due primarily to increased lending to customers.

Employee  compensation,  including broker compensation and employee  incentives,
increased by $25.5  million,  or 46% as compared to the first  quarter of fiscal
1995,  in line with  increases in revenues.  Occupancy  and  equipment  expenses
increased  by $1.4  million  or 21%  over  the  prior  year,  due to  additional
depreciation  and  equipment  rental  related  to new  broker  workstations  and
increased rent expense and property taxes. Other operating expense increased 84%
over  the  same  period  of the  prior  fiscal  year,  due  primarily  to  legal
settlements,  professional  fees,  and other costs  resulting  from lawsuits and
arbitrations related to various funds or assets managed by Piper Capital.

LIQUIDITY AND CAPITAL RESOURCES

The Company has a liquid balance sheet.  Most of the Company's assets consist of
cash and assets readily  convertible  into cash. The  fluctuations in cash flows
from financing  activities are directly  related to operating  activities due to
the liquid nature of the Company's balance sheet.

Management  believes that existing  capital,  funds from  operations and current
credit lines will be sufficient to finance the Company's business. During fiscal
1995, the Company entered into a settlement agreement for litigation relating to
the  Institutional  Government Income Portfolio (PJIGX) mutual fund, an open-end
fund managed by Piper  Capital.  In January of 1996,  the Court entered an Order
granting  final  approval of the  settlement,  which will provide  approximately
$67.5 million in payments to claimants over the next three years. This amount is
expected to be financed by tax refunds  arising from the resulting net operating
loss, cash flow from operations, and available credit facilities.

The Company is currently a defendant in other lawsuits and  arbitrations and is
subject to regulatory  inquiries  related to various funds or assets  managed by
Piper Capital.  In addition,  management is aware of unasserted claims which may
contain  similar  allegations.  The  Company  is also a  defendant  in two cases
involving an underwriting by Piper Jaffray. The Company intends to defend, or in
some cases  negotiate to settle these  actions.  It is impossible to predict the
outcome of these actions,  and, at the present time, the effect of these actions
on the consolidated financial statements cannot be determined.  Accordingly,  no
provision  for  losses  that may result has been  recorded  in the  consolidated
financial  statements.  However,  the  aggregate  cost  of  litigation  and  any
judgments, settlements or regulatory action relating to these cases could have a
material adverse effect on the consolidated financial statements.

In  the  normal  course  of  business,  the  Company's  customer,   trading  and
correspondent  clearance  activities  involve  the  execution,   settlement  and
financing of various  securities  transactions.  These activities may expose the
Company  to  off-balance  sheet  risk  in  the  event  the  other  party  to the
transaction  is unable to  fulfill  its  contractual  obligations.  The  Company
utilizes  financial  futures contracts to a limited extent to hedge fixed income
inventories  against market interest rate  fluctuations.  Such  transactions are
subject to the same controls as all trading for the  Company's own account.  The
Company also enters into government reverse repurchase  agreements to facilitate
hedging.  The  Company  does not,  and has no plans to enter  into,  for  either
hedging or speculative purposes,  the following types of transactions:  interest
rate  swaps,  foreign  currency  contracts  or  significant  amounts of futures,
options, forwards,  mortgage-backed derivatives, or other securities whose value
is  derived  from  other  investment  products   (derivatives).   The  Company's
investment management subsidiary,  Piper Capital, manages mutual funds and other
investment portfolios which do contain such derivatives.

The  Company  intends to  continue  to  repurchase  shares of its  common  stock
periodically,  to satisfy  obligations  to present and future  employee  benefit
plans. See Note 4 to the consolidated financial statements.


PART II.  OTHER INFORMATION


Item 1. Legal Proceedings

The Company is currently a defendant in lawsuits and arbitrations and is subject
to  regulatory  inquiries  related to various  funds or assets  managed by Piper
Capital. In addition, management is aware of unasserted claims which may contain
similar  allegations.  The Company is also a defendant in two cases involving an
underwriting by Piper Jaffray.  The Company intends to defend,  or in some cases
negotiate to settle these  actions.  It is  impossible to predict the outcome of
these  actions,  and, at the present  time,  the effect of these  actions on the
consolidated  financial  statements  cannot  be  determined.   Accordingly,   no
provision  for  losses  that may result has been  recorded  in the  consolidated
financial  statements.  However,  the  aggregate  cost  of  litigation  and  any
judgments, settlements or regulatory action relating to these cases could have a
material adverse effect on the consolidated financial statements.

Piper   Jaffray  and  Piper   Capital  have  been   cooperating   in  regulatory
investigations  being conducted by the Securities and Exchange Commission (SEC),
the  National  Association  of  Securities  Dealers  (NASD),  and the  State  of
Minnesota  Department of Commerce  (Minnesota  DOC) and have been  responding to
requests for information  from several other states.  These  investigations  and
inquiries  primarily relate to disclosure and sales practices  pertaining to the
sale of Piper Funds Inc.  Institutional  Government Income  Portfolio.  The NASD
staff has advised Piper  Jaffray that it intends to recommend  that the District
Business Conduct Committee of the NASD commence disciplinary proceedings against
Piper  Jaffray.  Similarly,  the staff of the  Minnesota  DOC has advised  Piper
Jaffray and Piper  Capital that it intends to recommend  that the  Minnesota DOC
commence disciplinary proceedings against Piper Jaffray and Piper Capital. Piper
Jaffray and Piper  Capital are engaged in  discussions  to resolve these matters
with the NASD and the  Minnesota  DOC,  and  management  of the  Company,  after
consultations  with counsel,  believes that the resolution of these  proceedings
will have no material adverse effect on its consolidated financial statements.

The Company is involved in various other lawsuits or  arbitrations or threatened
lawsuits or arbitrations  incidental to its securities  business.  Management of
the Company,  after consultation with counsel,  believes the resolution of these
various  lawsuits,  arbitrations and claims will have no material adverse effect
on the consolidated financial statements.

Actions which individually,  or when aggregated with similar action, make claims
for a material amount are described in more detail below:


A.  Lawsuits Related to Various Funds or Assets Managed by Piper Capital
    Management Incorporated

1.  Institutional Government Income Portfolio

a.  In Re Piper Funds Inc. Institutional Government Income Portfolio
    Litigation (United States District Court, District of Minnesota).

    This is a  consolidated  putative class action in which claims brought by 11
    persons or entities have been consolidated under the title In Re Piper Funds
    Inc.  Institutional  Government Income Portfolio  Litigation  (United States
    District  Court,  District of Minnesota)  ("PJIGX"  action),  pursuant to an
    Amended  Consolidated  Class Action  Complaint filed on October 5, 1994. The
    named plaintiffs in that Amended Consolidated Class Action Complaint purport
    to represent a class of individuals  and groups who purchased  shares of the
    Institutional  Government  Income  Portfolio,  an open-ended fund managed by
    Piper Capital, during the putative class period of July 1, 1991, through May
    9, 1994.

    The  Amended  Consolidated  Class  Action  Complaint  alleges  violation  of
    Sections  11 and  12(2) of the  Securities  Act of  1933,  as  amended  (the
    "Securities Act"); violation of Section 10(b) of the Securities Exchange Act
    of 1934,  as  amended  (the  "Securities  Exchange  Act"),  and  Rule  10b-5
    promulgated  thereunder;  violation of Sections  13(a)(3),  18(f), 34(b) and
    36(b) of the  Investment  Company Act of 1940,  as amended (the  "Investment
    Company  Act");  violation  of  Section  80A.01 of the  Minnesota  Statutes;
    negligent  misrepresentation;  and breach of fiduciary duty. Plaintiffs seek
    rescission or damages,  plus prejudgment  interest,  and attorneys' fees and
    costs.  The Amended  Consolidated  Class  Action  Complaint  claims that the
    Institutional Government Income Portfolio lost 24.6% of its value during the
    period  from  January  1,  1994 to May 6,  1994.  The  Amended  Consolidated
    Complaint does not specify an amount of damages sought. The defendants filed
    an Answer to the Amended  Consolidated Class Action Complaint on October 21,
    1994, in which the defendants deny liability.

    The named  plaintiffs  and  defendants  have  reached a  settlement  of this
    matter,  the terms of which are set forth in a  Settlement  Agreement  dated
    July 20, 1995,  as modified by an Addendum  filed with the Court on July 28,
    1995 (the  "Settlement  Agreement").  The Settlement  Agreement  contained a
    provision  which would have permitted the defendants to cancel the agreement
    if shareholders  who had incurred a cumulative  "Loss" (as defined under the
    Settlement  Agreement) of more than 10% of the Loss  sustained by the entire
    class had opted out. The October 2, 1995 deadline for  requesting  exclusion
    from the class has  passed,  and the Loss  sustained  by persons  requesting
    exclusion  is less than  10%.  At the  December  8,  1995  hearing  on final
    settlement  approval,  plaintiffs  estimated that,  based on the formula set
    forth in the  Settlement  Agreement  and the  number of  persons  requesting
    exclusion from the class, the settlement would provide  approximately  $67.5
    million to class members in payments  scheduled during the next three years.
    The  parties  stipulated  that the stay of related  arbitration  actions and
    lawsuits  should end,  allowing  investors who requested  exclusion from the
    settlement class to proceed with their claims.  The Court entered an "Order"
    dated  December 14, 1995,  which  granted final  approval to the  Settlement
    Agreement  and  dismissed  the  litigation  with  prejudice  in favor of the
    defendants. The Order further directs class members who had previously filed
    lawsuits or arbitration claims, but who failed to request exclusion from the
    class,  to  immediately  dismiss all such lawsuits or  arbitrations.  At the
    parties' request, that order was vacated and reissued on January 12, 1996 in
    substantially  identical  form for the  purpose of  severing  a  controversy
    relating to a  particular  fund  account.  If no appeals from the January 12
    Order are filed on or before  February 12, 1996,  the  Settlement  Agreement
    will become effective on or about February 12, 1996.


b.  Other Lawsuits Brought by Investors in Institutional Government Income
    Portfolio.

    The following actions are based on claims similar to those asserted in In
    Re Piper Funds, Inc. Institutional Government Income Portfolio
    Litigation.   Plaintiffs in these actions have requested exclusion from
    the settlement class in In re Piper Funds Inc. Institutional Government
    Income Portfolio.

    Gary Pashel and Gregg S. Hayutin, Trustees of the Mae Pashel Trust; Mae
    Pashel, individually; Gary Pashel and Michael H. Feinstein, Trustees of
    the Robert Hayutin Insurance Trust; Dennis E. Hayutin, Gregg S. Hayutin
    and Gary Pashel, Trustees of the Marie Ellen Hayutin Trust v. Piper
    Funds, Inc., Piper Capital Management Incorporated, Piper Jaffray Inc.
    and Piper Jaffray Companies Inc. (United States District Court, District
    of Colorado).

    Action commenced on September 30, 1994.  Plaintiffs seek rescission of their
    alleged  investment of approximately  $840,141.28 or monetary damages,  plus
    interest, and attorneys' fees and costs.

    Frank R. Berman, Trustee of Frank R. Berman Professional CP Pension Plan
    Trust v. Piper Jaffray Inc., Piper Fund, Inc., Morton Silverman and Worth
    Bruntjen (Minnesota State District Court, Hennepin County).

    Action commenced on April 11, 1995.  Plaintiff seeks monetary damages,  plus
    interest,  and attorneys' fees and costs.  The Complaint does not specify an
    amount of damages sought.

    Beverly Muth vs. Piper Jaffray Inc. and Teresa L. Darnielle, (Montana
    Thirteenth Judicial District Court, Yellowstone County).

    Action commenced on June 22, 1995.  Plaintiff seeks monetary damages of over
    $12,000,  a sum to be determined at trial for extreme emotional distress and
    an award of punitive damages.

    In re the Conservatorship of Helen E. Durmick, (Minnesota State District
    Court, Hennepin County Probate Court).

    On February 9, 1995,  conservator National City Bank and the estate of Helen
    E.  Durmick   petitioned  to  reopen  an   accounting  of  the   predecessor
    conservators,  Piper  Trust and Warren  Lampe,  alleging  that  Piper  Trust
    Company  and Lampe  breached  their  fiduciary  duties by  investing  in the
    Institutional  Government  Income  Portfolio  and that Piper  Trust  Company
    failed to disclose the risks of such  investment.  The  petition  objects to
    fees claimed in the  accounting.  The petition does not specify an amount of
    damages sought.

c.  Arbitrations Brought by Investors in Institutional Government Income
    Portfolio.

    The following  actions,  which are based on claims similar to those asserted
    in the PJIGX action,  were commenced in arbitration by individual  investors
    in  the  Institutional  Government  Income  Portfolio.  Claimants  in  these
    arbitrations  have requested  exclusion  from the settlement  class in In re
    Piper Funds Inc. Institutional Government Income Portfolio.

    Fredrikson & Byron, P.A., Bertin A. Bisbee, William J. Brody, John P.
    Byron, and Richard R. Hansen, as Trustees of the Fredrikson & Byron, P.A.
    Money Purchase Pension Plan, Fredrikson & Byron, P.A. Money Purchase
    Pension Trust, Fredrikson & Byron, P.A. Profit Sharing Plan and
    Fredrikson & Byron, P.A. Profit Sharing Trust v. Piper Jaffray
    Incorporated, Piper Capital Management Incorporated, Worth Bruntjen, and
    John Gibas (National Association of Securities Dealers Arbitration).

    Claim filed  November  11, 1994.  Claimants  seek to recover in excess of $1
    million.

    Public Water Supply District No. 5 v. Piper Jaffray Inc., Robert
    Williams, Branch Manager, and Charles Greenway, Assistant Vice President
    Investments (National Association of Security Dealers Arbitration).

    Claim filed August 30, 1994. Claimant seeks to recover $12,263.37.

    Roger W. Arvold and Maxine E. Arvold v. Piper Jaffray Inc. (National
    Association of Securities Dealers Arbitration).

    Claim filed  December  30,  1994.  Claimants  seek to recover  approximately
    $30,000.

    William T. Egan v. Piper Jaffray Inc., Piper Capital Management
    Incorporated, and Piper Funds Inc. (National Association of Securities
    Dealers Arbitration).

    Claim filed  December  29,  1994.  Claimant  seeks to recover  approximately
    $59,000.

    Park Nicollet Medical Foundation v. Piper Jaffray Inc. and Piper Capital
    Management Incorporated (National Association of Securities Dealers
    Arbitration).

    Claim filed January 9, 1995. Claimant seeks to recover $4,542,904.40.

    David S. Bradford, M.D. v. Piper Capital Management Inc., Piper Jaffray
    Inc., and Piper Jaffray Companies Inc. (National Association of
    Securities Dealers Arbitration).

    Claim filed  February  22,  1995.  Claimant  seeks to recover  approximately
    $400,000.

    South Dakota School of Mines and Technology Foundation, Inc. v. Piper
    Jaffray Inc., Piper Jaffray Companies Inc., Piper Capital Management
    Incorporated, Addison L. Piper, William H. Ellis, Dan L. Lastavich, Delos
    V. Steenson, Worth Bruntjen, Jaye F. Dyer, Edward J. Kohler, John T.
    Golle, and David T. Bennett (New York Stock Exchange Arbitration).

    Claim  filed  January  4,  1995.  Claimant  seeks to  recover  approximately
    $17,500,000.

    Joseph H. Reynebeau v. Piper Jaffray Inc. and Gerard Johnson (National
    Association of Securities Dealers Arbitration).

    Claim filed April 18, 1995. Claimant seeks to recover $9,999.99.

    City of Mound v. Piper Funds Inc. Institutional Government Income
    Portfolio, Piper Capital Management Incorporated, Piper Jaffray Inc.,
    Piper Jaffray Companies Inc. and Bennett E. Marks (New York Stock
    Exchange Arbitration).

    Claim filed May 31, 1995. Claimant seeks to recover in excess of $800,000.

    Eric Wade Compton Russell v. Piper Funds Inc. Institutional Government
    Income Portfolio, Piper Capital Management Incorporated, Piper Jaffray
    Inc., Piper Jaffray Companies Inc. and Edwin Johnson (New York Stock
    Exchange Arbitration).

    Claim filed June 13, 1995. Claimant seeks to recover in excess of $37,500.

    The I-Team, Inc. and Richard W. Olson v. Piper Jaffray Inc. Institutional
    Government Income Portfolio, Piper Capital Management Incorporated, Piper
    Jaffray Inc., Piper Jaffray Companies Inc. and Michael J. Hustad
    (National Association of Securities Dealers Arbitration).

    Claim filed  September 11, 1995.  Claimant  alleges claims arising after the
    class period in the PJIGX action.  Claimants  seek to recover  approximately
    $6,500.

    Robert J. Hilkemann, D.P.M., & Associates, P.C. and Dr. Robert J.
    Hilkemann as Plan Participant on behalf of the Robert J. Hilkemann,
    D.P.M., & Associates, P.C. Profit Sharing Plan and Trust v. Piper Jaffray
    Inc. (New York Stock Exchange Arbitration).

    Claim filed November 28, 1995.  Claimants seek to recover  damages in excess
    of $50,000.

    Thomas Howe and Richard Westphal, Trustees of the Swanson FloSystems
    Profit Sharing Trust under Agreement dated January 1, 1971 v. Piper
    Capital Management Incorporated, Piper Jaffray Inc., Piper Funds Inc.,
    Piper Jaffray Companies Inc., John J. Gibas, Thomas H. Hussian and James
    S. Vieburg (National Association of Securities Dealers Arbitration).

    Claim filed December 11, 1995.  Claimants seek to recover  damages in excess
    of $89,000.

    Hart v. Piper Jaffray Inc. (National Association of Securities Dealers
    Arbitration).

    Claim  filed  December  28,  1995.  Claimant  seeks to  recover in excess of
    $804,629.

    North Dakota State College of Science Foundation v. Piper Capital
    Management Incorporated, Piper Jaffray Inc. and Piper Jaffray Companies
    Inc. (National Association of Securities Dealers Arbitration).

    Claim filed January 8, 1996. Claimant seeks to recover compensatory damages,
    attorneys' fees, costs and punitive damages in an unspecified amount.


    Catholic Charities of the Diocese of Winona v. Piper Jaffray Inc.
    (National Association of Securities Dealers Arbitration).

    Claim  filed  January  15,  1996.  Claimant  seeks to  recover  in excess of
    $377,271.

2.  Adjustable Rate Term Trusts

a.  Herman D. Gordon, Robert D. Moore, I.R.A., Frank Donio, I.R.A., Jane
    Mazzagatte, I.R.A., Myra W. Smith, John M. Gobble, I.R.A., Morgan
    Properties, Inc., Gerald D. Cashill, Richard Harbison, P. Joan Spengler,
    I.R.A., James O. Chambers, and Mary A. Snively, on Behalf of Themselves
    and All Others Similarly Situated v. American Adjustable Rate Term Trust,
    Inc. 1996, American Adjustable Rate Term Trust, Inc. 1997, American
    Adjustable Rate Term Trust 1998; American Adjustable Rate Trust 1999;
    Piper Jaffray Companies Inc.; Piper Capital Management Inc., Piper
    Jaffray Inc.; Benjamin Rinkey; Jeffrey Griffin; Charles N. Hayssen,
    Edward J. Kohler; and William H. Ellis (United States District Court,
    District of Minnesota).

    Frank Donio, I.R.A., Jane Mazzagatte, I.R.A., Myra Smith, John M. Gobble,
    I.R.A., and Morgan Properties, Inc., on Behalf of Themselves and All
    Others Similarly Situated v. American Adjustable Rate Term Trust Inc.
    1996; American Adjustable Rate Term Trust Inc. 1997; American Adjustable
    Rate Term Trust Inc. 1998; American Adjustable Rate Term Trust Inc. 1999;
    Piper Jaffray Companies Inc.; Piper Capital Management Inc.; Piper
    Jaffray Inc.; Benjamin Rinkey; Jeffrey Griffin; Charles N. Hayssen,
    Edward J. Kohler and William H. Ellis (United States District Court,
    District of Minnesota).

    Plaintiff  Gordon,  an investor in the American  Adjustable Rate Term Trusts
    Inc.  1998 and 1999,  filed a putative  class action  lawsuit on October 20,
    1994.  Plaintiffs Donio, et al.,  investors in the American  Adjustable Rate
    Term Trusts Inc.  1996,  1997,  1998 and 1999  ("Trusts"),  filed a putative
    class action  lawsuit on April 14, 1995.  Plaintiffs in both actions filed a
    Consolidated  Amended Class Action Complaint on May 23, 1995. By Order dated
    June 8,  1995,  the  Court  consolidated  the two  putative  class  actions.
    Plaintiffs  purport to represent a class of persons who purchased  shares in
    the 1996 and 1997  Trusts  during the period  from April 15,  1992,  through
    October 31,  1994,  and in the 1998 and 1999  Trusts  during the period from
    January 23, 1992, through October 31, 1994.

    Plaintiffs  allege violation of Sections 11, 12 (2) and 15 of the Securities
    Act;  violation of Sections 10(b) and 20(a) of the Securities  Exchange Act,
    and Rule 10b-5 promulgated  thereunder;  violation of Sections 17(j), 34(b),
    36(a) and 36(b) of the Investment  Company Act;  violation of Section 80A.01
    of  the  Minnesota  Statutes;  negligent  misrepresentation  and  breach  of
    fiduciary duty.  Plaintiffs seek rescission or damages,  plus interest,  and
    attorneys'  fees and  costs.  The  Complaint  does not  specify an amount of
    damages sought.

    Although the  plaintiffs in this action allege that it has been brought as a
    class  action,  the Court  has not yet  determined  whether a class  will be
    certified. Defendants have filed a motion to dismiss the consolidated action
    in its entirety.

b.  Other Lawsuits Brought by Investors in Adjustable Rate Term Trusts

    Ernest Volinn v. Piper Jaffray Inc. (Washington State District Court,
    King County).

    Plaintiff,  an investor in the American  Adjustable  Rate Term Trusts,  Inc.
    1997 and 1998, the American Strategic  Portfolio,  Inc. III and the American
    Opportunity  Income  Fund,  Inc.,  filed  this  action on August  11,  1995.
    Plaintiff  alleges the investments  were  unsuitable and seeks  compensatory
    damages in the amount of $3,543, costs and attorneys' fees.

    The Ewing Company Profit Sharing Plan v. Piper Jaffray Inc. (United
    States District Court, District of Idaho).

    Plaintiff,  an investor in the American  Adjustable Rate Term Trusts,  Inc.,
    1995, 1996, 1997, 1998, 1999, the American  Strategic Income Portfolio,  and
    the American Strategic Income Portfolio II, filed this action on November 1,
    1995.  Plaintiff  alleges  violation  of  Section  10(b)  of the  Securities
    Exchange Act of 1934 and Rule 10b-5 promulgated thereunder; violation of the
    Idaho  Securities Act and the Idaho Consumer  Protection Act; and common law
    fraud.  Plaintiff seeks to recover principal in excess of $90,000,  interest
    in excess of $32,000,  attorneys'  fees and costs and has reserved the right
    to seek punitive damages.

c.  Arbitration Claims Brought by Investors in Adjustable Rate Term Trusts

    The following arbitrations are based on claims similar to those asserted
    in Gordon, et al. v. American Adjustable Rate Term Trust 1996, et al.

    William J. Kenney v. John P. Murphy, Piper Capital Management Inc., and
    Kemper Securities, Inc. (National Association of Securities Dealers
    Arbitration).

    Claim filed  February  24,  1995.  Claimant  seeks to recover  approximately
    $97,500.

    Daniel J. Epstein and Continental America Properties, Ltd. v. Dickinson &
    Company, Inc., Richard C. Barrett, Jr., Advest Company, Inc., Piper
    Jaffray Inc., and Piper Capital Management Incorporated (National
    Association of Securities Dealers Arbitration)

    Claim filed June 21, 1995. Claimant seeks to recover in excess of $30,000 in
    damages and in excess of $1 million in punitive damages.

    Richard C. Mollin, Trustee, and Richard C. Mollin v. Piper Jaffray Inc.
    and Philip H. Strom (National Association of Securities Dealers
    Arbitration)

    Claim filed May 5, 1995. Claimants seek to recover $42,656.13.

    Robert Albright v. Piper Jaffray Inc. (National Association of Securities
    Dealers Arbitration).

    Claim filed May 8, 1995. Claimant seeks $68,000 in compensatory  damages and
    $182,000 in punitive damages.

    Mia Stoick v. Piper Jaffray Inc., Piper Jaffray Co., Inc., and David J.
    Lehrer (National Association of Securities Dealers Arbitration).

    Claim filed July 28,  1995.  Claimant  seeks to recover  lost  profits in an
    amount to be determined and rescission of certain transactions.

    Satish C. & Roopa Bansal v. Gregory Schaff & Piper Jaffray Inc. (National
    Association of Securities Dealers Arbitration).

    Claim filed July 17, 1995. Claimants seek to recover $57,168.

    F.A. Wittern Charitable Foundation; Selectivend, Inc.; Specialty Foods
    Limited Partnership; 3-W Corporation; Vikart Industries, Inc.; Wittern
    Investment Company v. Piper Jaffray Companies Inc. and Jed Willoughby
    (National Association of Securities Dealers Arbitration).

    Claim  filed  September  5, 1995.  Claimants  seek to recover  approximately
    $98,726.92.

    Sylvia M. Gadbaw v. Doug Nichols and Piper Jaffray Inc. (National
    Association of Securities Dealers Arbitration).

    Claim  filed  November  2, 1995.  Claimant  seeks to  recover  approximately
    $8,750.

    Charles O. Wheeler v. Piper Jaffray Inc. and Dennis E. Gove, (National
    Association of Securities Dealers Arbitration).

    Claim  filed  January  26,  1996.  Claimant  seeks to recover  approximately
    $32,490.

3.  American Opportunity Income Fund, American Strategic Income Portfolio
    Inc. II and other named funds

a.  Gary E. Nelson, et al. v. American Strategic Income Portfolio Inc. II,
    Piper Jaffray Companies Inc., Piper Capital Management Incorporated,
    Piper Jaffray Inc., Worth Bruntjen, Charles Hayssen, Michael Jansen,
    William Ellis and Edward Kohler (United States District Court, Western
    District of Washington).

    Christian  Fellowship  Foundation  Peace  United  Church of Christ,  Gary E.
    Nelson and Lloyd Schmidt,  et al. v. American  Government  Income Portfolio,
    Inc., American Government Income Fund, Inc., American Government Term Trust,
    Inc.,  American Strategic Income Portfolio,  Inc., American Strategic Income
    Portfolio,  Inc. II, American Strategic Income Portfolio, Inc. III, American
    Opportunity  Income Fund,  Inc.,  American  Select  Portfolio,  Inc.,  Piper
    Jaffray  Companies Inc., Piper Capital  Management Inc., Piper Jaffray Inc.,
    Worth Bruntjen, Charles Hayssen, Michael Jansen, William H. Ellis and Edward
    J. Kohler (United States District Court, Western District of Washington).

    Plaintiff  Nelson,  an investor in the American  Strategic  Income Portfolio
    Inc. II, filed a putative class action lawsuit on June 28, 1995. Nelson also
    was an investor in the American  Opportunity  Income Fund,  Inc.  ("American
    Opportunity Fund"), and filed a second putative class action lawsuit on July
    12, 1995. On September 7, 1995,  Plaintiffs  Nelson, et al. filed an Amended
    Complaint  alleging  claims against eight funds and various  individuals and
    entities,  which included many of the allegations  contained in the previous
    two putative class action  lawsuits,  as well as new  allegations.  By Order
    filed October 5, 1995, the Court  consolidated the two putative class action
    lawsuits.  Plaintiff  filed a Second Amended  Complaint on February 5, 1996.
    Plaintiffs seek to represent a global class of persons who purchased  shares
    in the eight funds  during the period May 25, 1988  through May 1, 1995,  as
    well as certain subclasses.

    With respect to some or all of the subclasses,  Plaintiffs allege violations
    of Sections 11, 12(2) and 15 of the Securities Act; Sections 10(b) and 20(a)
    of the  Securities  Exchange  Act and  Rule  10b-5  promulgated  thereunder;
    Sections  13(a),  34(b),  and 36(b) of the Investment  Company Act;  certain
    subsections  of the  Racketeer  Influenced  and  Corrupt  Organizations  Act
    ("RICO"),  18 U.S.C.  S-1962 based on alleged  predicate acts of mail fraud,
    wire fraud,  interstate  transportation of money obtained through fraud, and
    fraud in the sale of securities;  the Washington  State  Securities Act; and
    the  Washington  Consumer  Protection  Act.  Plaintiffs  may also purport to
    allege claims under the common law of negligent misrepresentation and breach
    of  fiduciary  duty.  Under  some  or  all of the  claims,  plaintiffs  seek
    rescission or monetary damages, treble damages, attorney's fees, prejudgment
    interest  and  costs.  The  Second  Amended  Complaint  does not  specify  a
    particular amount of damages sought.

    Although  plaintiffs  in this action  allege  that it has been  brought as a
    class action,  the Court has not yet determined  whether any classes will be
    certified.  Although  defendants  have not yet  filed a formal  answer,  the
    defendants deny liability.

b.  The following arbitration seeks recovery by an investor in the American
    Opportunity Income Fund.

    Penny DiRocco v. Piper Jaffray Inc. (National Association of Securities
    Dealers Arbitration).

    Claim filed March 27, 1995. Claimant seeks damages in excess of $500,000.

c.  The following arbitration seeks recovery by investors in the American
    Strategic Income Portfolio Inc. I; American Strategic Income Portfolio
    Inc. II; American Strategic Income Portfolio Inc. III; and American
    Select Portfolio Inc.

    Frederick Poole and Jane Poole;  George Chapman;  Dolores  Patterson;  Craig
    Carter;  Elliott J. Ashford and Linda K. Ashford;  Elliott J. Ashford as the
    Custodian  for the  accounts of Katie  Stoltz and Zachary  Stoltz;  Linda K.
    Ashford, as custodian for the account of Shelby Ashford;  Kenneth Powers and
    Marlene Powers; Robert Ferris and William Ferris, Custodians for the account
    of Eva Ferris;  Jim Toomey and Linda Toomey;  Jeffrey Erwin and Lynda Erwin;
    Alan Citron and Kathy Citron; Mishelle Barr as the custodian for the account
    of Maria Barr;  J. Kerry Wilcox and Sally E.  Wilcox;  Willard R. Helton and
    Lenora J. Helton; Richard Austin and Joan Austin; Sydney Bannister;  F. Alan
    Boyd and Viola  Boyd;  Joseph  Brown and Wanda  Brown;  Peter Crane and Jody
    Gebbers;  Robert Fately and Regna Fately; Millard Fowler and Frankie Fowler;
    Marilyn  Gearing;  Edward  Godsey  and Nancy  Godsey;  James  Keaton;  R. L.
    McDonald;  Nora Rappe and Elmer Rappe;;  Doris Riggs; Larry Simms and Bonnie
    Simms;  Kenneth  Willig and Noreen  Willig,  as trustees  for the Kenneth A.
    Willig  1976  Trust;  Talleta  Wibmer and Helmut  Wibmer v. Piper  Jaffray &
    Hopwood  Incorporated;  Piper Capital  Management  Inc;  American  Strategic
    Income Portfolio,  Inc., I; American  Strategic Income Portfolio,  Inc., II;
    American  Strategic Income  Portfolio,  III;  American  Select,  Inc.; Piper
    Jaffray  Companies  Inc.;  Piper  Jaffray  Inc.;  and Mike Jansen  (National
    Association of Securities Dealers Arbitration).

    Claim filed January 2, 1996. Claimants seek rescission or damages,  interest
    and costs in an unspecified amount.

4.  Managers Intermediate Mortgage Fund

a.  Florence R. Hosea, Bobby W. Hosea, Getrude B. Dale and Peter M. Dale,
    Andrew Poffel and Diane Poffel as tenants by the Entireties, Myrone
    Barone, Donna M. DiPalo, Bernard B. Geltner as IRA custodian, IRA and
    Bernard B. Geltner and Gail Geltner and Paul Delman v. The Managers
    Funds, The Managers Funds, L.P., Robert P. Watson, Piper Capital
    Management Incorporated, Piper Jaffray Inc., Worth Bruntjen and Managers
    Intermediate Mortgage Fund (United States District Court, District of
    Connecticut).

    Karen E. Kopelman v. The Managers Fund, The Managers Funds, L.P., Robert
    P. Watson, Piper Capital Management Incorporated, Piper Jaffray Inc.,
    Worth Bruntjen and Managers Intermediate Mortgage Fund (United States
    District Court, District of Connecticut).

    Plaintiff Hosea filed a putative class action lawsuit on September 26, 1994.
    Plaintiff  Kopelman  filed a putative  class  action  lawsuit on November 4,
    1994.  By court order dated  December  13, 1994,  these two  putative  class
    action  lawsuits were  consolidated.  The plaintiffs  purport to represent a
    class of persons who purchased shares in the Managers  Intermediate Mortgage
    Fund ("Managers  Intermediate")  during the period from May 1, 1992, through
    June 14, 1994. Managers Intermediate is a no-load, open-end mutual fund that
    was generally  managed by The Managers Funds,  L.P. During the class period,
    Piper Capital was the portfolio asset manager.

    In their Amended and Restated Complaint,  filed on July 19, 1995, plaintiffs
    allege that defendants Piper Capital,  Piper Jaffray and Worth Bruntjen (the
    "Piper  Defendants")  violated  Sections 11, 12(2) and 15 of the  Securities
    Act;  Section  10(b)  of  the  Securities   Exchange  Act,  and  Rule  10b-5
    promulgated  thereunder;  Sections 34(b) and 36(b) of the Investment Company
    Act; and engaged in negligent misrepresentation.  Plaintiffs seek rescission
    or monetary  damages,  plus  prejudgment  interest,  punitive damages "where
    appropriate,"  and attorneys' fees and costs. The Complaint does not specify
    an amount of damages sought.

    Although the plaintiffs in this consolidated  action allege that it has been
    brought as a class action,  the Court has not yet determined whether a class
    will be  certified.  The  defendants  have  filed a motion  to  dismiss  the
    consolidated action in its entirety.

b.  Arbitration Claim Brought by Investor in Managers Intermediate Mortgage
    Fund

    The following arbitration claim which is based on claims similar to those
    asserted in Florence R. Hosea et al. v. The Managers Funds et al. seeks
    recovery for investment in the Managers Intermediate Mortgage Fund.

    George P. Stacey v. The Managers Funds, The Managers Funds L.P., Piper
    Jaffray Inc. and Piper Capital Management Inc. (National Association of
    Securities Dealers Arbitration).

    Claim filed July 27, 1995. Claimant seeks to recover  approximately  $45,000
    in actual damages and $50,000 in punitive damages.

5.  Managers Short Government Income Fund

a.  Robert Fleck, on behalf of himself and all others similarly situated v.
    The Managers Funds, The Managers Funds, L.P., Piper Jaffray Inc., Piper
    Capital Management Incorporated, Worth Bruntjen, Evaluation Associates,
    Inc., Robert P. Watson, John E. Rosati, William M. Graulty, Madeline H.
    McWhinney, Steven J. Paggioli, Thomas R. Schneeweis and Managers Short
    Government Fund, F/K/A Managers Short Government Income Fund (United
    States District Court, District of Minnesota).

    Plaintiff,  a  shareholder  of the  Managers  Short  Government  Income Fund
    ("Managers Short"), filed this putative class action lawsuit on November 18,
    1994.  Plaintiff  purports to  represent  a class of persons  who  purchased
    shares of  Managers  Short  during  the  period  from May 1,  1993,  through
    September 12, 1994.  Managers Short is a no-load,  open-end mutual fund that
    was  generally  managed by The Managers  Funds,  L.P.  Piper Capital was the
    portfolio asset manager until August 12, 1994.

    By Order filed November 24, 1995, the Court dismissed all claims against the
    Piper  Defendants  for  failure  to state a claim.  The Court  ordered  that
    plaintiff may file an amended  complaint on or before December 20, 1995. The
    Court  denied,  in  part,  a  motion  to  dismiss  claims  asserted  against
    defendants  other than the Piper  Defendants,  including  claims for alleged
    violation of Sections 11, 12(2) and 15 of the Securities Act.

    On December 14, 1995,  plaintiff served an Amended  Complaint  alleging that
    defendants  Piper Jaffray Inc., Piper Capital and Worth Bruntjen (the "Piper
    Defendants")  violated  Sections  11,  12(2) and 15 of the  Securities  Act;
    Section 10(b) of the  Securities  Exchange  Act, and Rule 10b-5  promulgated
    thereunder;  Section 13(a)(3) of the Investment  Company Act; and engaged in
    common law fraud.  Plaintiff  seeks  rescission and monetary  damages,  plus
    prejudgment interest,  punitive damages if appropriate,  and attorneys' fees
    and  costs.  The  Amended  Complaint  does not  specify an amount of damages
    sought.

    Although the plaintiff in this action  alleges that it has been brought as a
    class  action,  the Court  has not yet  determined  whether a class  will be
    certified.  The Piper  Defendants  have filed a motion to dismiss the claims
    against them in the Amended Complaint.


b.  Other Lawsuit Brought by Investor in the Managers Short Government Fund
    and the Managers Intermediate Mortgage Fund

    First Commercial Trust Company, N.A. v. The Managers Funds, a
    Massachusetts Business Trust, Managers Short Government Fund, Managers
    Intermediate Mortgage Fund, Managers Short and Intermediate Bond Fund,
    The Managers Funds, L.P., EAIMC Holdings Corporation, Evaluation
    Associates Holding Corporation, EAI Partners, L.P., Evaluation
    Associates, Inc., Robert P. Watson, William W. Graulty, Madeline H.
    McWhinney, Steven J. Paggioli, Thomas R. Schneeweis, William J. Crerend,
    Piper Capital Management Inc., Piper Jaffray Companies Inc., Worth
    Bruntjen, Standish, Ayer & Wood, Inc., TCW Funds Management, Inc. and TCW
    Management Company (Connecticut Superior Court, Stamford/Norwalk
    District).

    According  to the  Complaint  filed on October  26,  1995,  plaintiff  First
    Commercial  Trust  Company  ("FCTC") is an investor  in the  Managers  Short
    Government Fund, the Managers  Intermediate  Mortgage Fund, and the Managers
    Short and  Intermediate  Bond Fund.  Piper Capital was the  portfolio  asset
    manager for the Managers Short Government Fund and the Managers Intermediate
    Bond Fund, which are generally  managed by The Managers Funds, L.P. Based on
    the  allegations  in the  Complaint,  plaintiff  appears to fall  within the
    definition  of the  proposed  classes in both the  Hosea/Kopelman  and Fleck
    actions described above.

    Plaintiff  alleges that Piper  Jaffray  Companies  Inc.,  Piper  Capital and
    Bruntjen (the "Piper Defendants"), engaged in fraud, fraudulent concealment,
    breach of contract,  breach of fiduciary duty, breach of implied covenant of
    good faith and fair dealing, negligent misrepresentation,  civil conspiracy,
    negligent  interference  with  contractual   relations,   violation  of  the
    Connecticut  Unfair and Deceptive  Trade Practices Act, and violation of the
    Connecticut  Securities  Act.  Plaintiff  seeks  compensatory  damages in an
    unspecified  amount,  punitive damages,  attorneys' fees, interest and cost.
    The Piper  Defendants  have joined a motion  brought by other  defendants to
    dismiss the Complaint or alternatively to stay the action.

    In a  declaratory  action  filed on October  26,  1995 in the United  States
    District Court,  District of Connecticut,  the Piper Defendants,  along with
    The  Managers  Funds,  L.P.,  The  Managers  Funds and  related  persons and
    entities  seek a declaration  that they bear no liability to FCTC.  FCTC has
    brought a motion to dismiss the declaratory action.

6.  American Government Income Portfolio and the American Government Income
    Fund

    Carson H. Bradley v. American Government Income Fund, American Government
    Income Portfolio, Piper Capital Management Inc., Piper Jaffray Inc. and
    Worth Bruntjen (United States District Court, District of Idaho).

    Plaintiff,   an  individual  investor  in  the  American  Government  Income
    Portfolio and the American  Government  Income Fund, both  closed-end  funds
    offered by the defendants, filed this action on February 22, 1995. Plaintiff
    invested approximately $62,000 in the Funds, alleges a loss of approximately
    $40,000,  and seeks rescission of his investments in those funds or monetary
    damages, based on negligent misrepresentation, breach of fiduciary duty, and
    breach of  contract.  The action  was filed in Idaho  State  Court,  Bannock
    County,  but has now been removed to Federal District Court for the District
    of Idaho. Defendants filed a motion to dismiss on May 1, 1995.

7.  American Strategic Income Portfolio III and the Americas Income Trust

a.  John Darlington v. Piper Jaffray Inc. and Dick Tallent (Montana Second
    Judicial District Court, Silver Bow County).

    Plaintiff  filed this action on November 1, 1995 based on his  investment in
    the American  Strategic  Income Portfolio III and the Americas Income Trust,
    two closed end funds. Plaintiff alleges claims of breach of contract, breach
    of the covenant of good faith and fair dealing, fraud and misrepresentation.
    The Complaint seeks compensatory  damages in an unspecified amount,  damages
    for mental and emotional distress and pain and suffering,  punitive damages,
    and costs and attorneys' fees.

b.  The following arbitration seeks recovery for investment in the American
    Strategic Income Portfolio III.

    Daniel K. Nordby and Barbara L. Rawley v. Piper Jaffray Inc. and Gary M.
    Petrucci (National Association of Securities Dealers Arbitration).

    Claim  filed in  February,  1995.  Claimants  seek to recover  approximately
    $31,500.

8.  Privately Managed Accounts

a.  Minnesota Orchestral Association v. Piper Capital Management
    Incorporated, Piper Jaffray Inc. and Piper Jaffray Companies Inc.
    (National Association of Securities Dealers Arbitration).

    In a claim filed on  September  26, 1994,  the  claimant  alleged that Piper
    Capital  breached  an  investment  management  agreement  by  investment  in
    derivative  securities;   breached  its  fiduciary  duties;   misrepresented
    material  facts;   violated  the  Minnesota  Securities  Act;  violated  the
    Minnesota  Consumer  Fraud Act; and violated the  Investment  Advisers  Act.
    Claimant further alleged that the Company and Piper Jaffray are liable under
    the  Minnesota  securities  laws as  controlling  persons of Piper  Capital.
    Claimant  alleged that it has incurred damages in the principal amount of at
    least  $5,513,077,  and requests  damages  along with an award of reasonable
    attorneys' fees, forum fees, costs and disbursement.

    On October 18, 1995, an Arbitration Panel awarded Claimant  $4,017,865.51 in
    compensatory damages,  $2,000,000 in punitive damages, rescission of the one
    remaining CMO derivative security purchased for claimant by respondents, and
    interest on the entire sum at the  statutory  rate under  Minnesota law from
    and including  September 26, 1994.  Respondents moved to vacate the award of
    punitive  damages,  and Claimant moved to confirm the arbitration  award. By
    Order dated  January 24, 1996, a Judge in Minnesota  State  District  Court,
    Hennepin  County,  vacated the punitive  damages  award,  and in  connection
    therewith  the  parties  agreed  to a  resolution  of the  dispute  over the
    punitive damages award.

b.  Rodney P. Burwell v. Piper Jaffray Inc., Piper Capital Management, Jeff
    Griffin and Piper Jaffray Companies Inc. (National Association of
    Securities Dealers Arbitration).

    Claim filed  January 26, 1995.  Claimant  seeks to recover in excess of $2.5
    million for losses  sustained in a foreign  index linked  product  purchased
    through Piper Jaffray.

c.  Hunter, Keith Industries, Inc. v. Piper Capital Management Incorporated
    and Piper Jaffray Inc. (National Association of Securities Dealers
    Arbitration).

    Claim filed July 27, 1995.  Claimant  seeks to recover in excess of $500,000
    and  punitive  damages,  Claimant  alleges  violation  of federal  and state
    securities laws,  breach of fiduciary duty,  breach of contract,  common law
    fraud and  negligence.  Claimant had  individually  managed  accounts  which
    included investments in derivative products.

d.  Craig A. Nalen v. Piper Capital Management and Worth Bruntjen (National
    Association of Securities Dealers Arbitration).

    Claim filed October 4, 1995. Claimant seeks to recover $670,000 and punitive
    damages.  Claimant alleges  violation of the Securities and Exchange Act and
    NASD rules, and common law claims of fraud and misrepresentation. Claimant's
    individually managed account included investments in derivative products.

e.  Regents of the University of Minnesota and Ruminco, Ltd. v. Piper Capital
    Management Incorporated, Piper Jaffray Inc., Piper Jaffray Companies Inc.
    and Worth Bruntjen (National Association of Securities Dealers
    Arbitration).

    Claim filed  November 22, 1995.  Claimants  seek to recover over $15 million
    and  punitive  damages.  Claimants  allege  violation  of federal  and state
    securities laws,  breach of fiduciary duty,  breach of contract,  negligence
    and violation of the Minnesota Consumer Fraud Act.  Claimants'  individually
    managed account included investments in derivative products.

f.  Rosemount Inc. v. Piper Capital Management Incorporated, Piper Jaffray
    Inc. and Piper Jaffray Companies Inc. (National Association of Securities
    Dealers Arbitration).

    Claim filed  December 15, 1995.  Claimant seeks to recover in excess of $3.5
    million  and  punitive  damages.   Claimant  alleges  violation  of  federal
    securities laws,  breach of fiduciary duty, common law fraud and negligence.
    Claimant's  individually  managed account included investments in derivative
    products.

B.  Shareholder Litigation

    Edward B. McDaid and Ronald Goldstein v. Piper Jaffray Companies Inc.,
    Addison L. Piper, William H. Ellis and Charles N. Hayssen (United States
    District Court, District of Delaware).

    This putative class action lawsuit consolidates separate lawsuits previously
    filed by Edward McDaid and Ronald Goldstein. Plaintiffs represent a class of
    persons who purchased  Piper Jaffray  Companies Inc. common stock during the
    period from May 12, 1993, through August 24, 1994.

    In their  consolidated  complaint filed January 9, 1995,  plaintiffs  allege
    that  Piper  Jaffray  Companies  Inc.  and the  individual  defendants  made
    misleading  statements and omissions which artificially  inflated the market
    price of the Company's common stock throughout the class period.  Plaintiffs
    allege  that  the  defendants  violated  Sections  10(b)  and  20(a)  of the
    Securities Exchange Act, and Rule 10b-5 promulgated thereunder.

    The named plaintiffs and defendants have reached an
    agreement-in-principle  on a proposed  settlement.  If approved by the Court
    and a sufficiently  large  percentage of the class,  a settlement  agreement
    consistent with the terms of the agreement-in-principle  would provide up to
    $1.95 million to  plaintiffs,  consisting  of $450,000 in cash,  $700,000 in
    Piper  Jaffray  common  stock  to be  valued  on the  effective  date of the
    settlement  agreement and a note for $800,000 to be paid with interest at 8%
    per annum 12 months from the effective date of the settlement agreement.

C.  Bonneville Pacific Corporation

    Piper  Jaffray  has been  named as one of many  defendants  in two  lawsuits
    separately  filed in the United  States  District  Court for the District of
    Utah  resulting  from  Piper  Jaffray's  dealings  with  Bonneville  Pacific
    Corporation   ("BPCO").   Other   defendants   include   BPCO's   attorneys,
    accountants,  lenders and other  investment  bankers.  BPCO is  currently in
    Chapter 11 reorganization proceedings in Utah.

    The plaintiffs in the first-filed lawsuit originally brought their complaint
    as a  purported  class  action  relating to the $63.25  million  offering of
    convertible  subordinated debentures of BPCO in August 1989, for which Piper
    Jaffray was a co-managing  underwriter in a syndicate led by Kidder, Peabody
    & Co. and secondary  trading in BPCO's Common Stock from August 1989 through
    the  inception  of  BPCO's  bankruptcy   proceeding  in  January  1992.  The
    plaintiffs  in their  complaint  alleged  violations  of  federal  and state
    securities laws, common law fraud and negligent misrepresentation.  On March
    14, 1994, the  plaintiffs  filed a motion to amend their  complaint  seeking
    leave to add additional  parties and claims.  The proposed amended complaint
    seeks to add  claims  under  RICO and to expand  the class  period,  under a
    common  law fraud  theory,  to  include  the $22.5  million  initial  public
    offering of BPCO's  Common  Stock in August  1986,  for which Piper  Jaffray
    acted as the sole  underwriter,  and the $31 million  secondary  offering of
    BPCO's  Common  Stock in August  1987,  for  which  Piper  Jaffray  acted as
    co-managing underwriter. In addition to actual damages, the proposed amended
    complaint also seeks treble damages under RICO, punitive damages,  interest,
    costs and attorneys' fees. On April 29, 1994,  motions to dismiss brought by
    Piper  Jaffray  and the other  underwriter  defendants  with  respect to the
    plaintiffs' claims of violations of Section 10(b) of the Securities Exchange
    Act and Rule 10b-5 promulgated thereunder,  conspiracy, aiding and abetting,
    common-law fraud and negligent  misrepresentation were granted. The judge in
    the  case  certified  to  the  Utah  Supreme  Court  issues  related  to the
    plaintiffs'  claims under the Utah Uniform Securities Act and further denied
    plaintiffs'  March 14, 1994 motion for leave to file an amended complaint as
    premature.  The  plaintiffs  were given leave to amend all dismissed  claims
    except the  conspiracy  and aiding and abetting  claims under Section 10(b),
    which were dismissed with  prejudice.  By date of June 14, 1994,  plaintiffs
    served a second amended  complaint,  realleging claims under Sections 11 and
    15 of the Securities  Act and Section 10 of the Securities  Exchange Act and
    Rule 10b-5 promulgated thereunder.  Plaintiffs also asserted RICO claims and
    claims under the Utah Uniform  Securities  Act,  among others.  On August 2,
    1994,  Piper  Jaffray  and the other  defendants  moved to dismiss the RICO,
    Securities  Exchange  Act and Utah  Uniform  Securities  Act claims and that
    motion is pending.

    The second  lawsuit was  brought by the BPCO  bankruptcy  trustee.  The most
    recent  amendment  to the  complaint  filed  on  February  3,  1995  asserts
    conspiracy,  RICO,  common law fraud,  breach of fiduciary  duty and similar
    theories  arising  out of the  activities  of BPCO from  approximately  1984
    through the inception of its  bankruptcy  proceeding.  The  plaintiff  seeks
    actual damages, treble damages under RICO, punitive damages, interest, costs
    and  attorneys'   fees.  On  October  7,  1994,  the  plaintiff  served  its
    preliminary damage  calculations  indicating that it sought  $647,346,549 in
    damages (before trebling under RICO) from the Company.  The plaintiff sought
    a  similar  amount  from  the  other  defendant   underwriters   and  BPCO's
    accountants,  attorneys, lenders and others. On November 27, 1995 motions to
    strike  plaintiff's  damages  theory  brought  by Piper  Jaffray  and  other
    defendants  were  granted.  Plaintiff  has not  yet  served  any new  damage
    information.  Piper Jaffray and other  defendants  have also made motions to
    dismiss the complaint or for a judgment on the pleadings which are currently
    pending. The case is in the discovery stage.

D.  NASDAQ Market-Maker Anti-Trust Securities Litigation and Justice
      Department Investigation
    Piper  Jaffray  has been named as a  defendant  in several  purported  class
    action  proceedings  that allege  anti-trust  violations.  Piper Jaffray was
    joined as defendant in such actions  during July 1994. All actions have been
    consolidated  under  the  title In re  NASDAQ  Market-Maker  Anti-Trust  and
    Securities  Litigation  (United States District Court,  Southern District of
    New York ).

    The plaintiffs allege that twenty-four defendants,  including Piper Jaffray,
    that act as dealers on the NASDAQ computerized quotations system,  conspired
    to raise and fix the spreads  between  the bid and ask prices of  securities
    traded  on  NASDAQ.  Plaintiffs  further  allege  that as a  result  of such
    conspiracy,  NASDAQ spreads are larger than spreads for stocks traded on the
    New York Stock Exchange and the American Stock Exchange. The purported class
    consists of all persons in the United  States who are current  customers and
    who bought or sold securities  through NASDAQ within four years prior to the
    filing of the  complaints.  Plaintiffs seek treble damages of an unspecified
    amount.

    Following  the  initiation  of these  actions,  Piper Jaffray has received a
    request from the United States Department of Justice to provide  information
    and documents  with respect to its NASDAQ market  making  activities.  Piper
    Jaffray  has  learned  that the  Department  of  Justice  is  conducting  an
    investigation of the NASDAQ market generally.



<PAGE>



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

The following  matters were  approved by  shareholders  at the Company's  Annual
Meeting of Shareholders held on January 24, 1996:

1. Election of Directors
                                                For          Authority Withheld

       Addison L. Piper                     14,953,823                709,980
       William H. Ellis                     14,857,666                806,138
       Ralph W. Burnet                      15,103,429                560,374
       Kathy Halbreich                      14,536,933              1,126,870
       John L. McElroy                      15,099,281                564,522
       Robert S. Slifka                     15,096,333                567,471
       David Stanley                        15,011,739                652,064


2.  Proposal  to  approve  the  appointment  of  Deloitte  &  Touche  LLP as the
independent  auditors of the Company  for the fiscal year ending  September  30,
1996:

       For                               15,563,180
       Against                               83,412
       Abstain                               86,418




<PAGE>


Item 6.     Exhibits and Reports on Form 8-K

   (a) Exhibits

       11 - Statement Regarding Computation of Per Share Earnings.

       27 - Financial Data Schedule (filed electronically).

   (b) Reports on Form 8-K

       The  Company  was not  required  to file any  reports  on Form 8-K to the
       Securities and Exchange  Commission during the quarter ended December 31,
       1995.



<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.


                                 PIPER JAFFRAY COMPANIES INC.
                                  (Registrant)





Dated February  9, 1996          /s/ Deborah K. Roesler
                                 DEBORAH K. ROESLER
                                 Chief Financial Officer and Managing Director


Dated February  9, 1996          /s/ William H. Ellis
                                 WILLIAM H. ELLIS
                                 President and Chief Operating Officer







<PAGE>



                          PIPER JAFFRAY COMPANIES INC.

                INDEX OF EXHIBITS TO QUARTERLY REPORT ON FORM 10Q


Exhibit Description of Exhibit                                 Form of Filing

11      Statement Regarding Computation of Per Share Earnings  Electronic
                                                               transmission

27      Financial Data Schedule                                Electronic
                                                               transmission



<PAGE>