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

                                    FORM 10-Q

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


 For the quarter ended December 31, 1996     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, 1996, 18,660,536 shares of the Registrant's common stock were
issued and outstanding.





<PAGE>


                          PIPER JAFFRAY COMPANIES INC.


                                TABLE OF CONTENTS

                                                                          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                                   10

              Item 4.    Submission of Matters to a  Vote of Security Holders18

              Item 6.    Exhibits and Reports on Form 8-K                    19

              Signatures                                                     20

              Index of Exhibits                                              21

              Exhibits                                                       22





<PAGE>




PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                          PIPER JAFFRAY COMPANIES INC.

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                    (In Thousands, Except Share Amounts)

<TABLE>
                                                                December 31,   September 30,
                                                                   1996            1996
                                                              ------------- ---------------
                                                                (unaudited)
<S>                                                              <C>           <C>
ASSETS
Cash ($1,470 and $1,863, respectively, which was required to
  be segregated under federal and other regulations) ..........   $  28,374    $  23,406
Receivable from other brokers and dealers .....................      79,540       99,686
Receivable from customers .....................................     536,152      520,489
Trading securities owned, at market ...........................     140,310      105,540
Securities purchased under agreements to resell ...............      27,441         --
Investments pursuant to mortgage-backed bonds .................      43,923       44,064
Office equipment and leasehold improvements, at cost less
  accumulated depreciation of $55,095 and $52,546, respectively      30,263       30,185
Deferred income tax asset .....................................      21,546       21,215
Other assets ..................................................      80,986       79,155
                                                                  =========    =========
                                                                  $ 988,535    $ 923,740
                                                                  =========    =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings .........................................     218,841      183,320
Checks and drafts payable .....................................      70,788       70,628
Payable to other brokers and dealers ..........................     127,599      109,776
Payable to customers ..........................................     130,468      160,930
Securities sold under agreements to repurchase ................      21,137         --
Trading securities sold, but not yet purchased, at market .....      48,643       27,472
Mortgage-backed bonds payable .................................      44,855       45,333
Employee compensation and related taxes .......................      57,048       81,740
Federal and state income taxes ................................       4,615         --
Other accounts payable and accrued expenses ...................      89,508       77,716
                                                                  ---------    ---------
                                                                    813,502      756,915

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;
    18,661,387 and 18,197,725 issued, respectively ............      18,661       18,198
Additional paid-in capital ....................................      26,729       19,432
Retained earnings .............................................     129,656      129,201
Less treasury stock, at cost; 851 and 467 shares, respectively          (13)          (6)
                                                                  ---------    ---------
                                                                    175,033      166,825
                                                                  =========    =========
                                                                  $ 988,535    $ 923,740
                                                                  =========    =========
</TABLE>

       See accompanying notes to consolidated financial statements.


<PAGE>


=========================================================================

                          PIPER JAFFRAY COMPANIES INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In Thousands, Except Per Share Amounts)
                                   (Unaudited)
<TABLE>
                                               Three Months Ended
                                            ----------- -----------
                                            December 31, December 31,
                                                1996        1995
                                            ----------- ------------
<S>                                           <C>         <C>

REVENUES:
  Commissions ..............................   $ 46,415   $ 42,646
  Profits on principal transactions ........     43,994     40,915
  Investment banking .......................     20,937     25,023
  Interest .................................     12,290      9,480
  Asset management fees ....................      8,905      9,574
  Other ....................................      6,288      4,888
                                               --------   --------
      Total revenues .......................    138,829    132,526

EXPENSES:
  Employee compensation ....................     86,036     81,486
  Floor brokerage and clearance ............      2,260      2,104
  Interest .................................      6,155      3,043
  Occupancy and equipment ..................      9,417      8,140
  Communications ...........................      5,546      4,798
  Travel and promotional ...................      4,251      3,618
  Other operating expense ..................     22,181     18,429
                                               --------   --------
      Total expenses .......................    135,846    121,618
                                               --------   --------

Income before income taxes .................      2,983     10,908

Income taxes ...............................      1,163      4,254
                                               ========   ========

Net income .................................   $  1,820   $  6,654
                                               ========   ========

Net income per common and common equivalent
  share (primary and fully diluted) ........   $    .10   $    .37
Weighted average number of common and common
  equivalent shares outstanding ............     18,846     18,037

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

</TABLE>



              See accompanying notes to consolidated financial statements


<PAGE>


                          PIPER JAFFRAY COMPANIES INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)
<TABLE> 
                                                             Three months ended
                                                            --------------------
                                                          December 31, December 31,
                                                              1996         1995
                                                          ------------------------
<S>                                                         <C>          <C>                                                
Operating activities:
Net income ..............................................   $   1,820    $   6,654
Adjustments to reconcile net income to net cash
   provided by operating activities:
  Depreciation amortization .............................       2,556        1,773
  Deferred income taxes .................................        (331)       8,151
  (Increase) decrease in:
    Net receivable from customer ........................     (46,125)     (39,454)
    Net trading securities ..............................     (13,599)     (23,619)
    Net repurchase agreements ...........................      (6,304)        --
    Other ...............................................       9,968        3,835
  Increase (decrease) in:
    Net payable to other brokers and dealers ............      37,969      (74,054)
    Checks and drafts payable ...........................         160       18,074
    Employee compensation ...............................     (24,692)        (917)
    Federal and state income taxes payable ..............       4,615      (19,136)
                                                            ---------    ---------
       Net cash used in operating activities ............     (33,963)    (118,693)

Financing activities:
Net change in:
  Short-term borrowings .................................      35,521      130,301
  Mortgage-backed bonds payable .........................        (478)      (1,188)
  Investments and funds pursuant to mortgage-backed bonds         141        1,138
Payments made on capitalized lease obligations ..........        --           (358)
Net common stock issued .................................       9,102        1,153
Treasury shares repurchased .............................      (1,349)         (99)
Dividends paid ..........................................      (1,365)      (1,316)
                                                            ---------    ---------
       Net cash provided by financing activities: .......      41,572      129,631

Net cash used for purchase of office equipment and
   leasehold improvements ...............................      (2,641)      (2,618)
                                                            ---------    ---------

Net increase in cash ....................................       4,968        8,320
Cash at beginning of period .............................      23,406       17,345
                                                            =========    =========
Cash at end of period ...................................   $  28,374    $  25,665
                                                            =========    =========

Supplemental  disclosure  of cash flow  information:  
Cash paid during the three months ended for:
  Interest                                                  $   5,442    $   2,904
  Income taxes                                              $  16,833    $  18,346

</TABLE>

              See accompanying notes to consolidated financial statements.


<PAGE>


============================================================================



                          PIPER JAFFRAY COMPANIES INC.

                          NOTES TO FINANCIAL STATEMENTS

                  THREE MONTHS ENDED DECEMBER 31, 1996 AND 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, 1996. The results
of operations for the three months ended December 31, 1996, are not  necessarily
indicative of the results to be expected for the year ending September 30, 1997.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial  statements and reported  amounts of revenues and expenses  during the
reporting period. Actual results could differ from those estimates.

The  consolidated  statement of financial  condition as of December 31, 1996 and
the other consolidated  financial  information for the period ended December 31,
1996 and 1995, 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.

In October 1995, the Financial  Accounting  Standards Board issued  Statement of
Financial  Accounting  Standards  (SFAS) No.  123,  Accounting  for  Stock-Based
Compensation.  The Company has elected to  continue  following  the  guidance of
Accounting  Principles  Board  Opinion No. 25,  Accounting  for Stock  Issued to
Employees,  for  measurement and  recognition of stock-based  transactions  with
employees.  The Company will adopt the  disclosure  provision of SFAS No. 123 in
fiscal 1997 as required.

In June 1996,  the  Financial  Accounting  Standards  Board issued SFAS No. 125,
Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities.  In December  1996,  SFAS No. 127 was issued,  which defers for one
year  the  effective  date of SFAS  No.125  for  secured  borrowing,  repurchase
agreements,  dollar-roll,  securities lending, and certain similar transactions.
The Company will evaluate adoption of SFAS No. 125 as required.

2.   NET CAPITAL REQUIREMENTS

At December  31,  1996,  Piper  Jaffray  Inc.  (Piper  Jaffray),  the  Company's
broker-dealer subsidiary, had net capital under applicable regulations of $121.7
million or 22% of aggregate  debit  balances and $110.8 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 Management  Incorporated (Piper Capital), the Company's asset management
subsidiary.  In addition,  management  is aware of  unasserted  claims which may
contain similar allegations. The Company is also a defendant in a case involving
an underwriting for Bonneville Pacific Corporation 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.

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.


4.   SHAREHOLDERS' EQUITY

During the three months ended December 31, 1996, 105,000 shares of the Company's
common stock were repurchased by the Company,  leaving a total of 647,500 shares
available for repurchase  pursuant to the Board of Directors'  authorizations to
repurchase  common stock to satisfy  employee  benefit plan  obligations.  As of
December 31, 1996, 851 shares of common stock were held in the treasury.

On November 5, 1996, the Board of Directors authorized the contribution of $15.4
million  to  the  Piper  Jaffray  Companies  ESOP  for  fiscal  year  1996.  The
contribution  was made 50 percent in cash and 50 percent in the Company's  newly
issued common stock, thus adding $7.7 million in additional shareholders' equity
during the first quarter of fiscal 1997.

On January 21, 1997,  the Board of Directors  of the Company,  at its  regularly
scheduled  meeting,  declared  a  quarterly  dividend  of 7.5 cents per share of
common stock,  payable March 11, 1997, to shareholders of record on February 25,
1997.


<PAGE>

<TABLE>



( in thousands, except share and per share amounts)
                                                                  Additional                                    Total
                                          Common Stock             Paid-In       Retained     Treasury     Shareholders'
                                       Shares         Amount        Capital       Earnings       Stock          Equity
                                  --------------- ------------- -------------- ------------- ------------ -----------------
<S>                                <C>            <C>           <C>            <C>           <C>            <C>

Balances at Sept. 30, 1995 ....    17,500,254    $    17,566    $    11,901    $   127,306   $    (1,049)   $   155,724
  Net income ..................                                                      7,296                        7,296
  Net stock issued pursuant to
    employee benefit plans ....       979,504            632          7,531                        4,678         12,841
  Cash dividends-$.30 per share                                                     (5,401)                      (5,401)
  Treasury stock acquired .....      (282,500)                                                    (3,635)        (3,635)
                                  -----------    -----------    -----------    -----------   -----------    -----------
Balance at Sept. 30, 1996 .....    18,197,258         18,198         19,432        129,201            (6)       166,825

  Net income ..................                                                      1,820                        1,820
  Net stock issued pursuant to
    employee benefit plans ....       568,278            463          7,297                        1,343          9,103
  Cash dividend-$.075 per share                                                     (1,365)       (1,365)
  Treasury stock acquired .....      (105,000)                                                    (1,350)        (1,350)
                                  ===========    ===========    ===========    ===========   ===========    ===========
Balance at Dec. 31, 1996 ......    18,660,536    $    18,661    $    26,729    $   129,656   $       (13)   $   175,033
                                  ===========    ===========    ===========    ===========   ===========    ===========
</TABLE>



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, 1996.

OPERATIONS

Revenues  for the quarter  ended  December  31, 1996 were $138.8  million,  a 5%
increase over the same period of the prior year. The Company recorded net income
of $1.8 million or $.10 per share for the quarter ended December 31, 1996 versus
net income of $6.7 million and $.37 per share a year earlier.

Commissions  and  profits  on  principal   transactions  increased  9%  and  8%,
respectively,  over the prior year's first quarter  results,  but were partially
offset  by a  decrease  in  equity  underwriting  revenues.  Asset  management
revenue  decreased 7% for the quarter  ended  December 31, 1996  compared to the
same period in fiscal 1996 as a result of lower average assets under  management
by Piper  Capital.  Interest  income was up 30% to $12.3 million for the quarter
ended  December  31,  1996.  The  increase  was due to a 38% increase in average
customer margin debits, partially offset by a 50 basis point decrease in average
interest  rates.  Other  income  increased  29% to $6.3 million due to growth in
managed accounts and increased non-product revenues.

Employee  compensation,  including broker compensation and employee  incentives,
increased by $4.6 million,  or 6% as compared to the same three months of fiscal
1996,  in line with  increases  in  revenue.  Interest  expense  doubled to $6.2
million due to  increased  borrowing  required to fund  higher  customer  margin
debits  and  firm  inventories  as  well as  interest  accruals  for  litigation
settlement  notes  payable.  Occupancy and  equipment  expenses  increased  $1.3
million  or 16%  over  the  prior  year  due  to  investment  in the  technology
infrastructure  of the  branches  and  headquarters  along with the  addition or
expansion of several retail offices. Other operating expenses increased over the
first quarter of the prior fiscal year due to 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  and 1996  the  Company  entered  into  certain  structured
settlement  agreements for class-action  litigation relating to various funds or
assets  managed  by Piper  Capital.  Payments  for these  agreements,  which are
payable over one to five years,  are  expected to be financed  through cash 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 a case involving
an underwriting for Bonneville Pacific Corporation 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.

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.

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  including repurchase  agreements.
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.


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 a case  involving  an
underwriting for Bonneville  Pacific  Corporation 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.

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 actions, make claims
for a material amount are described in more detail below:


      Lawsuits and Arbitrations Related to Various Funds or Assets Managed by
      Piper Capital:

1.    Institutional Government Income Portfolio

a.    Lawsuits Brought by Investors in the Institutional Government Income
      Portfolio.

      The following  actions have been brought by investors in the Institutional
      Government  Income  Portfolio.   Plaintiffs  in  these  actions  requested
      exclusion from a previously settled consolidated class action, In re Piper
      Funds  Inc.  Institutional  Government  Income  Portfolio  (United  States
      District Court,  District of Minnesota) ("PJIGX" action). The PJIGX action
      had included claims based on allegations of misrepresentation and improper
      management. The claims alleged in the following actions are similar to the
      claims which had been alleged in the PJIGX action.

      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 in  Minnesota  State  District  Court,
      Hennepin County.  This action was removed to United States District Court,
      District of Minnesota.  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.

b.    Arbitrations Brought by Investors in Institutional Government Income Port-
      folio.

      The following  arbitrations,  commenced by investors in the  Institutional
      Government  Income  Portfolio,  are based on claims  similar to the claims
      which  had  been  alleged  in  the  PJIGX   action.   Claimants  in  these
      arbitrations  requested  exclusion from the settlement  class in the PJIGX
      action.

      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.

      Eric Wade  Compton  Russell  v.  Piper Funds Inc. Institutional Governmen
      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.

      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 Manage-
      ment  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.

      Lummi  Indian  Business Council v. Piper  Jaffray  Inc. and Piper Capital
      Management  Incorporated  (National    Association of Securities Dealers
      Arbitration).

      Claim  filed June 13,  1996.  Claimant  seeks to recover in excess of $1.7
      million.

      City of Eden Prairie v. Piper Capital  Management,  Piper Jaffray Inc.,
      Piper Jaffray  Companies  Inc. and Worth  Bruntjen (National Association
      of Securities Dealers Arbitration).

      Claim  filed  June 12,  1996.  Claimant  seeks to  recover in excess of $1
      million.



2.    Adjustable Rate Term Trusts

a.    Arbitration Claims Brought by Investors in Adjustable Rate Term Trusts and
      Other Funds

      The  following   arbitrations  have  been  brought  by  investors  in  the
      Adjustable   Rate  Term  Trusts  and  other  funds.   Claimants  in  these
      arbitrations  requested exclusion from the previously settled consolidated
      class action,  Gordon, et al. v. American Adjustable Rate Term Trust 1996,
      et al. ("Term Trusts" action).  The Term Trusts action had included claims
      based on  allegations  of  violation  of Sections 11, 12 (2) and 15 of the
      Securities Act of 1933  ("Securities  Act"),  violations of Sections 10(b)
      and 20(a) of the  Securities  Exchange Act of 1934  ("Securities  Exchange
      Act"),  and  Rule  10b-5  promulgated  thereunder,   claims  of  negligent
      misrepresentation and breach of fiduciary duty.

      William C. Schwenck v. Piper Jaffray Inc. (National Association of Secur-
      ities Dealers Arbitration).

      Claim  filed  July 17,  1996.  Claimant  seeks to  recover  in  excess  of
      $100,000.

      David L. G. Willats and Dixie Lea Willats v. Piper  Jaffray  Inc.(National
      Association  of  Securities  Dealers  Arbitration).

      Claim filed July 25, 1996. Claimant seeks to recover in excess of $62,000.

      Robert M.  Matthews,  Sue B.  Matthews,  Trustee,  and Jean Myers v. Piper
      Jaffray and Stephen  Driever  (National Association of Securities Dealers
      Arbitration).

      Claim filed  November  18,  1996.  Claimant  seeks to recover in excess of
      $31,645.

3.    American  Strategic  Income  Portfolio Inc. I, II, and III (ASP,  BSP, and
      CSP,  respectively),  American  Select   Portfolio Inc.  (SLA),  American
      Opportunity  Income Fund (OIF),  American  Government  Income Fund Inc.
      (AGF),   American Government Income Portfolio Inc. (AAF), Americas Income
      Trust Inc. (XUS) and other named funds.   The following actions have been
      brought by investors in one or more of the above-mentioned funds.

      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,  Rose-
      ville  Firefighter's  Relief  Association, William J. and  Florence  B.
      Cohen,  John and  Shirley  Breitner,  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 BSP,  filed a putative class action
      lawsuit on June 28,  1995.  Nelson also was an  investor  in the OIF,  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. Plaintiffs filed a Second Amended Complaint on February 5, 1996,
      and a  Third  Amended  Complaint  on  June  4,  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. ss. 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 Third
      Amended  Complaint does not specify a particular amount of damages sought.
      The  defendants  filed a motion to dismiss the  consolidated  action and a
      motion for summary judgment.

      The named plaintiffs and defendants reached an agreement-in-principle on a
      proposed  settlement  July  30th,  1996.  If  approved  by  the  Court,  a
      settlement    agreement    consistent    with    the    terms    of    the
      agreement-in-principle  would  provide  $15.5  million to class members in
      payments by the Company and Piper  Capital  over the next four years.  The
      settlement  also includes an agreement that each of AGF, AAF and OIF would
      offer to  repurchase  up to 25 percent of their  outstanding  shares  from
      current  shareholders  at net asset value.  If the  discounts  between net
      asset value and market  price of these funds do not  decrease to 5 percent
      or less within  approximately  two years after the  effective  date of the
      settlement,  the fund boards may submit  shareholder  proposals to convert
      these funds to an open-end format, unless they determine that it is not in
      the  shareholders'  best  interest  to  do  so.  Finally,   the  agreement
      stipulates that each of ASP, BSP, CSP and SLA would offer to repurchase up
      to 10 percent of their outstanding shares from current shareholders at net
      asset value.

      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, ASP, and BSP, filed this action on November
      1, 1995.  Plaintiff  alleges  violation of Section 10(b) of the Securities
      Exchange Act 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.  Upon  Stipulation  of the parties,  the court
      issued an Order,  dated December 12, 1996,  dismissing all claims relating
      to the American  Adjustable Rate Term Trusts,  Inc., 1996, 1997, 1998, and
      1999.

      John  Darlington  and Ann   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
      CSP and XUS. 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.

      Kenneth  Schneider v. Piper Jaffray Inc. and Richard Tallent (Montana Sec-
      ond Judicial  District Court,  Silver Bow  County).

      Plaintiff  filed this action on April 11, 1996 based on his  investment in
      ASP.   Plaintiff  alleges  claims  of   misrepresentation   and  negligent
      misrepresentation.   The  Complaint  seeks  compensatory   damages  in  an
      unspecified amount, punitive damages, and costs and attorneys' fees.

      Margaret Nagel v. Piper Jaffray Inc. and Richard  Tallent  (Montana Second
      Judicial  District  Court,  Silver Bow County).

      Plaintiff  filed this action on April 11, 1996 based on her  investment in
      ASP.   Plaintiff  alleges  claims  of   misrepresentation   and  negligent
      misrepresentation.   The  Complaint  seeks  compensatory   damages  in  an
      unspecified amount, punitive damages, and costs and attorneys' fees.

      Kenneth Gennerman as Trustee of The Nicole Bowlin Trust v. Piper Jaffray
      Inc.  (Wisconsin Circuit Court,  Waukesha  County)

      Plaintiff filed this action on August 7, 1996,  based on his investment in
      OIF. Plaintiff alleges claims of negligent misrepresentation,  intentional
      misrepresentation   and  strict   responsibility.   The  Complaint   seeks
      rescission or  compensatory  damages for investment of $10,000,  interest,
      punitive damages and attorneys' fees and costs.

b.    The  following  arbitration  claims seek  recovery by investors in one or
      more of the  afore-mentioned  closed-end funds:

      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;  Susan Van Masdam;  George Willot;  Teresa Smith; Betty
      Wick; Susan Wick;  Velma Donelly 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  December  6, 1995.  Claimants  seek  rescission  or damages,
      interest and costs in an unspecified amount.

      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.

      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.

      Kelly E. Andrews v. Piper Jaffray Inc. (National Association of Securities
      Dealers Arbitration).

      Claim filed May 10, 1996. Claimant seeks to recover approximately $24,979.

      Mabel I. Hines v. Piper Jaffray Inc. and Robert Bliss (National Assoc-
      iation of Securities Dealers Arbitration).

      Claim filed May 16, 1996. Claimant seeks to recover approximately $25,000.

      Henry G. and Barbara S. Kohler Trustees FBO Calneva  Development  Company
      Inc.,  Combined  Retirement Trust Dated 3/1/81 v. M.L. Stern & Company and
      Piper Jaffray Inc.(National Association of Securities Dealers Arbitration)

      Claim  filed  August  5,  1996.  Claimant  seeks to  recover  in excess of
      $19,984.

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

      Claim  filed  September  3, 1996.  Claimant  seeks to recover in excess of
      $256,550.

      A. J. Low, Jr. v. Piper Jaffray Inc. (National Association of Securities
      Dealers Arbitration).

      Claim filed September 12, 1996. Claimant seeks to recover $10,000.

      Kenneth W.  Nagel,  Trustee,  and  Rachel J.  Nagel,  Trustee  v. Piper
      Jaffray  Inc.  (National  Association  of Securities Dealers Arbitration).

      Claim filed November 18, 1996. Claimants seek to recover $10,000.

      Gary N. Cohn, GNC Enterprises Pension Plan, GNC Enterprises Profit Sharing
      Plan, Cohn Family Irrevocable Family Trust and Gary N. Cohn IRA v. Piper
      Jaffray Inc., Piper Capital Management Incorporated, Worth Bruntjen, Paul
      A. Dow, William H. Ellis, Marijo Goldstein, Jeffrey B. Griffin, Charles N.
      Hayssen, David B. Holden, Kevin A.Jansen, Michael P. Jansen, Susan J. Moen
      Klaseus, Edward J. Kohler, Addison L. Piper, Nancy Olsen, Benjamin Rinkey,
      David E. Rosedahl, Eric L. Siedband, John G. Wenker and Beverly J. Zimmer
      (National Association of Securities Dealers Arbitration).

      Claim filed  December  19,  1996.  Claimants  seek to recover in excess of
      $169,786 and/or rescission.

4.    Managers Intermediate Mortgage Fund

      Florence R. Hosea,  Bobby W.  Hosea, Getrud  B. D ale 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. The motion is currently pending.

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
      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.  The Piper  Defendants filed a motion to dismiss
      the claims against them in the Amended Complaint.

      The named plaintiff and defendants reached an  agreement-in-principle on a
      proposed settlement on October 1, 1996. If approved  by  the Court and a  
      sufficiently large  percentage of the putative class members, a settlement
      agreement consistent with the terms of the  agreement-in-principle  would 
      provide to class members up to a total of  $1.5 million collectively from 
      The Managers Funds, L.P. and  Piper Capital on the  effective date of the
      settlement.

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 Mort-
     gage Fund, Managers Short and Intermediate Bond Fund, The Managers Funds,
     L.P., EAIMC Holdings Corporation,  Evaluation Associates Holding Corpora-
     tion,  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 the Company , Piper  Capital and Worth  Bruntjen,
      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 costs. The Company,  Piper Capital
      and Worth  Bruntjen  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.    Privately Managed Accounts

      The following  arbitration  claim seeks  recovery for accounts  managed by
      Piper Capital:

     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 accounts included investments in derivative products.

      Bonneville Pacific Corporation

      Piper Jaffray was named as one of several defendants in a lawsuit 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
      December  1991. 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. In an opinion filed July
      5, 1996, the Utah Supreme Court held that reliance was not an element of a
      claim under Utah's Uniform  Securities  Act, but that the plaintiffs  were
      required  to  establish  privity  with a  particular  defendant  seller of
      securities in order to recover from that defendant.

      A second lawsuit was brought by the BPCO bankruptcy  trustee.  The lawsuit
      alleged  conspiracy,  RICO, common law fraud, breach of fiduciary duty and
      similar  theories  arising out of the activities of BPCO from 1984 through
      the  inception of its  bankruptcy  proceeding.  The lawsuit  sought actual
      damages, treble damages under RICO, punitive damages,  interest, costs and
      attorney's  fees.  On  August  12,  1996,  Piper  Jaffray  entered  into a
      settlement  agreement with the BPCO bankruptcy  trustee  providing for the
      payment  of $10.0  million  in  settlement  of all  claims  against  Piper
      Jaffray.  The  settlement  agreement  was  subsequently  approved  by  the
      District Court and the Bankruptcy Court. Under the terms of the settlement
      agreement,  Piper made a $7.0 million  payment on  September 9, 1996.  Two
      additional payments of $1.5 million each are payable in September 1997 and
      September 1998.


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 22, 1997:

1. Election of Directors

                                                             Authority
            Director                          For             Withheld
            ------------------------- --------------- ---------------------
            Ralph W. Burnet               15,615,543          1,538,643
            Andrew S. Duff                15,659,586          1,494,600
            William H. Ellis              15,369,858          1,784,328
            Kathy Halbreich               14,952,456          2,201,730
            Addison L. Piper              15,533,071          1,621,115
            Robert S. Slifka              15,622,025          1,532,161
            David Stanley                 15,013,597          2,140,589


2. Proposal to approve the amendments to the Piper Jaffray Companies Inc. Stock
Investment Plan.
                               For                      13,462,005
                               Against                     885,360
                               Abstain                     820,747


Item 6.    Exhibits and Reports on Form 8-K

    (a)    Exhibits

          10 - Material  Contracts:  Loan  Agreement  between  Piper  Jaffray
               Companies Inc. and First Bank  National Association, dated
               August 27, 1996.

           11 - Statement Regarding Computation of Per Share Earnings.

           27 - Financial Data Schedule-EDGAR version only(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, 1996.








<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 13, 1997   /s/ Deborah K. Roesler
                           DEBORAH K. ROESLER
                           Chief Financial Officer and
                               Managing Director


Dated: February 13, 1997   /s/ William H. Ellis
                           WILLIAM H. ELLIS
                           President


<PAGE>



                          PIPER JAFFRAY COMPANIES INC.

               INDEX OF EXHIBITS TO QUARTERLY REPORT ON FORM 10-Q


Exhibit   Description of Exhibit                                  Form of Filing

10        Material Contract: Loan agreement between Piper Jaffray    Electronic
          Companies Inc. and First Bank National Association,      transmission
          dated August 27, 1996.

11        Statement Regarding Computation of Per Share Earnings.     Electronic
                                                                   transmission


27        Financial Data Schedule (EDGAR version only).              Electronic
                                                                   transmission