**Table of Contents**

| ****x**** | **QUARTERLY REPORT PURSUANT TO SECTION 13        OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-----------|----------------------------------------------------------------------------------------------------|
| ****o**** | **TRANSITION REPORT PURSUANT TO SECTION        13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-----------|-----------------------------------------------------------------------------------------------------|
| **Illinois**             | **75-2375969**                       |
|--------------------------|--------------------------------------|
| (State of incorporation) | (I.R.S. employer identification no.) |

| **Large accelerated filer o**                            |   |   | **Accelerated filer o**         |   |
|----------------------------------------------------------|--------|--------|---------------------------------|--------|
|                                                     |   |   |                            |   |
| **Non-accelerated filer o**                              |   |   | **Smaller reporting company x** |   |
| **(Do not check if a smaller reporting        company)** |   |   |

----

| **PART I**                                                                                 | **FINANCIAL INFORMATION**                                                                                                     | **Page No.** |
|--------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|--------------|
|                                                                                       |                                                                                                                          |         |
| **Item 1.**                                                                                | **Unaudited Condensed Consolidated      Financial Statements:**                                                               | ** **   |
| ****                                                                                       | ** **                                                                                                                    | ** **   |
| ****                                                                                       | **Condensed Consolidated      Balance Sheets at September 30, 2009 (unaudited) and December 31, 2008**                        | **3**        |
| ****                                                                                       | ** **                                                                                                                    | ** **   |
| ****                                                                                       | **Unaudited Condensed      Consolidated Statements of Loss for Three and Nine Months Ended September      30, 2009 and 2008** | **4**        |
| ****                                                                                       | ** **                                                                                                                    | ** **   |
| ****                                                                                       | **Unaudited Condensed Consolidated      Statements of Cash Flows for Nine Months Ended September 30, 2009 and 2008**          | **5**        |
| ****                                                                                       | ** **                                                                                                                    | ** **   |
| ****                                                                                       | **Notes to Unaudited Condensed      Consolidated Financial Statements**                                                       | **6**        |
| ****                                                                                       |                                                                                                                          | ** **   |
| **Item 2.**                                                                                | **Management's Discussion and      Analysis of Financial Condition and Results of Operations**                                | **16**       |
|                                                                                       |                                                                                                                          |         |
| **Item 3.**                                                                                | **Quantitative and Qualitative      Disclosures about Market Risk**                                                           | **25**       |
|                                                                                       |                                                                                                                          |         |
| **Item 4T.**                                                                               | **Controls and Procedures**                                                                                                   | **25**       |
| ** **                                                                                 | ** **                                                                                                                    |         |
| **PART II**                                                                                | **OTHER INFORMATION**                                                                                                         | ** **   |
|                                                                                       |                                                                                                                          |         |
| **Item 1.**                                                                                | **Legal Proceedings**                                                                                                         | **25**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 1A.**                                                                               | **Risk Factors**                                                                                                              | **26**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 2.**                                                                                | **Unregistered Sales of Equity      Securities and Use of Proceeds**                                                          | **26**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 3.**                                                                                | **Defaults in Senior Securities**                                                                                             | **27**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 4.**                                                                                | **Submission of Matters to      a Vote of Security Holders**                                                                  | **27**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 5.**                                                                                | **Other Information**                                                                                                         | **27**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 6.**                                                                                | **Exhibits**                                                                                                                  | **27**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Signatures**                                                                             | **28**                                                                                                                        |
| **Exhibit      31.1 Certification of Chief Executive Officer**                             | **29**                                                                                                                        |
| **Exhibit      31.2 Certification of Chief Financial Officer**                             | **30**                                                                                                                        |
| **Exhibit      32.1 Certification of Chief Executive Officer and Chief Financial Officer** | **31**                                                                                                                        |

----

**Table of Contents**

| **TERRA NOVA FINANCIAL GROUP, INC. AND        SUBSIDIARIES         CONDENSED CONSOLIDATED BALANCE SHEETS********(UNAUDITED)**                                                                                                                                                          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                        |   | **September 30,         2009** |  |  |   | December 31,         2008 |   |
| **ASSETS**                                                                                                                                                                                                                                                                             |
| Cash and cash equivalents                                                                                                                                                                                                                                                              | **$** | **6,481,304** |   |   | $ | 7,889,553 |   |
| Cash segregated in compliance with federal      regulations                                                                                                                                                                                                                            |   | **149,390,045** |   |   |   | 141,159,364 |   |
| Receivables from brokers,      dealers and clearing organizations                                                                                                                                                                                                                      |   | **32,907,231** |   |   |   | 13,568,459 |   |
| Receivables from customers and non-customers,      net of allowance for doubtful accounts                                                                                                                                                                                              |   | **10,295,347** |   |   |   | 4,858,360 |   |
| Property and equipment, net      of accumulated depreciation and amortization                                                                                                                                                                                                          |   | **1,307,758** |   |   |   | 1,221,066 |   |
| Capitalized software development costs, net      of accumulated amortization                                                                                                                                                                                                           |   | **1,798,575** |   |   |   | 2,060,015 |   |
| Intangible assets, net of      accumulated amortization                                                                                                                                                                                                                                |   | **3,083,901** |   |   |   | 4,111,514 |   |
| Income tax receivables                                                                                                                                                                                                                                                                 |   | **738,285** |   |   |   | 1,446,264 |   |
| Goodwill                                                                                                                                                                                                                                                                               |   | **7,501,408** |   |   |   | 7,501,408 |   |
| Deferred income taxes                                                                                                                                                                                                                                                                  |   | **2,499,761** |   |   |   | 1,784,761 |   |
| Other assets                                                                                                                                                                                                                                                                           |   | **1,193,435** |   |   |   | 1,346,764 |   |
|            Total      assets                                                                                                                                                                                                    | **$** | **217,197,050** |   |   | $ | 186,947,528 |   |
|                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **LIABILITIES AND SHAREHOLDERS' EQUITY**                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                   |  | **** |   |   |   |  |   |
| Payables to brokers, dealers and clearing organizations                                                                                                                                                                                                                                | **$** | **1,191,819** |   |   | $ | 913,621 |   |
| Payables to customers and      non-customers                                                                                                                                                                                                                                           |   | **183,377,532** |   |   |   | 151,970,566 |   |
| Accounts payable and accrued expenses                                                                                                                                                                                                                                                  |   | **2,426,404** |   |   |   | 2,525,692 |   |
|            Total      liabilities                                                                                                                                                                                               |   | **186,995,755** |   |   |   | 155,409,879 |   |
|                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **Commitments and contingencies**                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| **Shareholders' equity**                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Preferred stock - $10 par value; 5,000,000      shares authorized; none issued                                                                                                                                                                                                         |   | - |   |   |   | - |   |
| Common stock; $0.01 par value;      150,000,000 shares authorized; 25,482,942 shares           issued and 25,054,508 shares outstanding at September      30, 2009 and 25,482,942 shares           issued and outstanding at December 31, 2008 |   | **254,829** |   |   |   | 254,829 |   |
| Treasury stock, common, at cost; 428,434 shares      at September 30, 2009 and            no shares at December 31, 2008                                                                                                                                           |   | **(272,056** | **)** |   |   | - |   |
| Additional paid-in capital                                                                                                                                                                                                                                                             |   | **52,096,682** |   |   |   | 52,005,418 |   |
| Accumulated deficit                                                                                                                                                                                                                                                                    |   | **(21,878,160** | **)** |   |   | (20,722,598 | ) |
|            Total      shareholders' equity                                                                                                                                                                                      |   | **30,201,295** |   |   |   | 31,537,649 |   |
|            Total      liabilities and shareholders' equity                                                                                                                                                                      | **$** | **217,197,050** |   |   | $ | 186,947,528 |   |
|                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| See accompanying notes to unaudited condensed        consolidated financial statements.                                                                                                                                                                                                |

----

**Table of Contents**

| **TERRA NOVA FINANCIAL GROUP, INC.          AND SUBSIDIARIES           CONDENSED CONSOLIDATED STATEMENTS OF LOSS           (UNAUDITED)** |
|------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   **Three Months Ended September          30,****** |    |       ** Nine          Months Ended September 30,** |
|                                                                                                                                          |   | **2009** |   |   |   | 2008 |   |   |   | **2009** |   |   |   | 2008 |   |
| **REVENUES:**                                                                                                                            |   |   |   |   |   |    |   |    |   |   |   |   |   |    |   |
| Commissions and fees                                                                                                                     | **$** | **6,288,807** |   |   | $ | 8,147,071 |   |   | **$** | **19,761,940** |   |   | $ | 23,438,687 |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                                                                                                          |   | **329,017** |   |   |   | 1,376,672 |   |   |   | ****1,189,231**** |   |   |   | 4,848,101 |   |
| Interest expense on brokerage accounts                                                                                                   |   | **-** |   |   |   | 187,260 |   |   |   | **-** |   |   |   | 1,009,689 |   |
|          Net        interest income                                                         |   | **329,017** |   |   |   | 1,189,412 |   |   |   | **1,189,231** |   |   |   | 3,838,412 |   |
|                                                                                                                                     |   | **** |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Software fees, net                                                                                                                       |   | **229,778** |   |   |   | 210,821 |   |   |   | ****716,978**** |   |   |   | 563,157 |   |
| Other revenues                                                                                                                           |   | **154,833** |   |   |   | 163,243 |   |   |   | **262,192** |   |   |   | 359,731 |   |
|                                                                                                                                     |   | **** |   |   |   |  |   |   |   |  |   |   |   |  |   |
|          Net        revenues                                                                |   | **7,002,435** |   |   |   | 9,710,547 |   |   |   | **21,930,341** |   |   |   | 28,199,987 |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   | **** |   |   |   |   |   |
| **EXPENSES:**                                                                                                                            |   | **** |   |   |   |  |   |   |   | **** |   |   |   |   |   |
| Commissions and clearing                                                                                                                 |   | **2,575,546** |   |   |   | 2,488,600 |   |   |   | **7,663,804** |   |   |   | 8,267,603 |   |
| Compensation and benefits                                                                                                                |   | **2,216,306** |   |   |   | 2,315,995 |   |   |   | **6,616,982** |   |   |   | 7,125,321 |   |
| Software and market data                                                                                                                 |   | **741,207** |   |   |   | 1,330,087 |   |   |   | **2,494,848** |   |   |   | 4,580,196 |   |
| Advertising and promotional                                                                                                              |   | **161,798** |   |   |   | 214,906 |   |   |   | ****456,139**** |   |   |   | 470,091 |   |
| Professional fees                                                                                                                        |   | **653,566** |   |   |   | 736,876 |   |   |   | ****2,032,802**** |   |   |   | 2,048,807 |   |
| Communications and information technology                                                                                                |   | **246,875** |   |   |   | 189,618 |   |   |   | ****713,341**** |   |   |   | 637,712 |   |
| Depreciation and amortization                                                                                                            |   | **583,662** |   |   |   | 595,923 |   |   |   | ****1,715,916**** |   |   |   | 1,721,854 |   |
| Bad debt expense                                                                                                                         |   | **-** |   |   |   | 3,553,296 |   |   |   | **-** |   |   |   | 3,470,890 |   |
| Other general and administrative        expenses                                                                                         |   | **825,863** |   |   |   | 464,310 |   |   |   | **2,129,092** |   |   |   | 977,102 |   |
|                                                                                                                                     |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
|          Total        expenses                                                              |   | **8,004,823** |   |   |   | 11,889,611 |   |   |   | **23,822,924** |   |   |   | 29,299,576 |   |
|                                                                                                                                     |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Loss before income taxes                                                                                                                 |   | **(1,002,388** | **)** |   |   | (2,179,064 | ) |   |   | **(1,892,583** | **)** |   |   | (1,099,589 | ) |
|                                                                                                                                     |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Income tax benefit                                                                                                                       |   | **392,021** |   |   |   | 785,814 |   |   |   | **737,021** |   |   |   | 277,696 |   |
|                                                                                                                                     |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Net loss                                                                                                                                 |   | **(610,367** | **)** |   |   | (1,393,250 | ) |   |   | **(1,155,562** | **)** |   |   | (821,893 | ) |
|                                                                                                                                     |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Dividends on preferred        stock                                                                                                      |   | **-** |   |   |   | - |   |   |   | **-** |   |   |   | (20,113 | ) |
|                                                                                                                                     |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Loss attributable to common        shareholders                                                                                          | **$** | **(610,367** | **)** |   | $ | (1,393,250 | ) |   | **$** | **(1,155,562** | **)** |   | $ | (842,006 | ) |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss per common share:                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                    | **$** | **(0.02** | **)** |   | $ | (0.05 | ) |   | **$** | **(0.05** | **)** |   | $ | (0.03 | ) |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                                                                                                                                  | **$** | **(0.02** | **)** |   | $ | (0.05 | ) |   | **$** | **(0.05** | **)** |   | $ | (0.03 | ) |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common        shares outstanding:                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                    |   | **25,054,508** |   |   |   | 25,520,694 |   |   |   | **25,328,622** |   |   |   | 25,987,771 |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                                                                                                                                  |   | **25,054,508** |   |   |   | 25,520,694 |   |   |   | **25,328,622** |   |   |   | 25,987,771 |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to unaudited          condensed consolidated financial statements.****                                            |

----

**Table of Contents**

| **TERRA NOVA FINANCIAL GROUP, INC.            AND SUBSIDIARIES             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS             (UNAUDITED)** |
|------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                      | **Nine Months Ended September 30,** |
|                                                                                                                                                      |   | **2009** |   |   |   | 2008 |   |
| **Cash flows from operating          activities:**                                                                                                   |   |   |   |   |   |   |   |
| Net loss                                                                                                                                             | **$** | **(1,155,562** | **)** |   | $ | (821,893 | ) |
| Adjustments to reconcile          net loss to net cash provided by (used in) operating activities:                                                   |   |  |   |   |   |  |   |
| Share-based compensation                                                                                                                             |   | **91,264** |   |   |   | 107,094 |   |
| Bad debt          expense                                                                                                                            |   | **-** |   |   |   | 3,470,890 |   |
| Depreciation and amortization                                                                                                                        |   | **1,715,916** | ** ** |   |   | 1,721,854 |   |
| Gain on sale of seat          on exchange                                                                                                            |   | **-** |   |   |   | (300,142 | ) |
| Deferred income taxes                                                                                                                                |   | **(715,000** | **)** |   |   | (392,630 | ) |
| Reversal of legal reserve                                                                                                                            |   | **-** |   |   |   | (140,000 | ) |
| Gain on extinguishment of liabilities                                                                                                                |   | **(60,626** | **)** |   |   | (540,000 | ) |
| Loss on write-off of          assets                                                                                                                 |   | **50,000** |   |   |   | 32,127 |   |
| Change in operating assets and liabilities:                                                                                                          |   | ** ** |   |   |   |   |   |
| (Increase) decrease in          assets:                                                                                                              |   | ** ** | ** ** |   |   |   |   |
| Cash segregated in compliance with federal          regulations                                                                                      |   | **(8,230,681** | **)** |   |   | (31,593,762 | ) |
| Receivables from brokers,          dealers and clearing organizations                                                                                |   | **(19,338,772** | **)** |   |   | (21,192,697 | ) |
| Receivables from customers and non-customers                                                                                                         |   | **(5,436,987** | **)** |   |   | 25,888,918 |   |
| Income tax receivables                                                                                                                               |   | **707,979** |   |   |   | (1,225,464 | ) |
| Other assets                                                                                                                                         |   | **103,329** |   |   |   | (29,763 | ) |
| Increase (decrease) in          liabilities:                                                                                                         |   | ** ** | ** ** |   |   |   |   |
| Payables to brokers, dealers and clearing          organizations                                                                                     |   | **278,198** | ** ** |   |   | 20,077 |   |
| Payables to customers          and non-customers                                                                                                     |   | **31,406,966** |   |   |   | 29,811,231 |   |
| Accounts payable and accrued expenses                                                                                                                |   | **(38,662** | **)** |   |   | (1,247,711 | ) |
| Income tax liability                                                                                                                                 |   | **-** |   |   |   | (592,918 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| Net cash provided by          (used in) operating activities                                                                                         |   | **(622,638** | **)** |   |   | 2,975,211 |   |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| **Cash flows from investing          activities:**                                                                                                   |   |  |   |   |   |  |   |
| Proceeds from sale of seat on exchange                                                                                                               |   | **-** |   |   |   | 309,642 |   |
| Purchases of property          and equipment                                                                                                         |   | **(370,718** | **)** |   |   | (263,460 | ) |
| Capitalization of software development          costs                                                                                                |   | **(142,837** | **)** |   |   | (722,394 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| Net cash used in investing activities                                                                                                                |   | **(513,555** | **)** |   |   | (676,212 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| **Cash flows from financing activities:**                                                                                                            |   |  |   |   |   |  |   |
| Repurchase and retirement          of common stock                                                                                                   |   | **-** |   |   |   | (1,314,378 | ) |
| Purchase of treasury stock                                                                                                                           |   | **(272,056** | **)** |   |   | - |   |
| Preferred dividends paid                                                                                                                             |   | **-** |   |   |   | (50,063 | ) |
| Redemption of preferred stock                                                                                                                        |   | **-** |   |   |   | (781,100 | ) |
| Net payments on line          of credit                                                                                                              |   | **-** |   |   |   | (7,222,179 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| Net cash used in financing          activities                                                                                                       |   | **(272,056** | **)** |   |   | (9,367,720 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| Net decrease in cash          and cash equivalents                                                                                                   |   | **(1,408,249** | **)** |   |   | (7,068,721 | ) |
| Cash and cash equivalents at beginning          of period                                                                                            |   | **7,889,553** |   |   |   | 7,937,880 |   |
| Cash and cash equivalents          at end of period                                                                                                  | **$** | **6,481,304** |   |   | $ | 869,159 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |
| Supplemental cash flow          information:                                                                                                         |   |   |   |   |   |   |   |
| Cash paid for interest                                                                                                                               | **$** | **-** |   |   | $ | 1,009,689 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |
| Cash (received) paid for income taxes                                                                                                                | **$** | **(696,322** | **)** |   | $ | 1,933,316 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |
| See accompanying notes to unaudited            condensed consolidated financial statements.                                                          |

----

**Table of Contents**

| • | Securities and Exchange Commission ("SEC")      as a broker-dealer                  |
|--------|-------------------------------------------------------------------------------------|
| • | Financial Industry Regulatory Authority ("FINRA")      as a broker-dealer           |
| • | National Futures Association ("NFA") as a futures      commission merchant          |
| • | Commodity Futures Trading Commission ("CFTC")      as a futures commission merchant |

| • | The Depository Trust Company             |
|--------|------------------------------------------|
| • | National Securities Clearing Corporation |
| • | The Options Clearing Corporation         |

| • | Chicago Stock Exchange  |
|--------|-------------------------|
| • | ISE Stock Exchange      |
| • | National Stock Exchange |
| • | NYSE Arca Equities      |
| • | NYSE Amex Equities      |
| • | NYSE Euronext           |
| • | NASDAQ Stock Market     |
| • | NASDAQ OMX BX           |

| • | Boston Options Exchange           |
|--------|-----------------------------------|
| • | NYSE Arca Options                 |
| • | NASDAQ OMX PHLX                   |
| • | NYSE Amex Options                 |
| • | International Securities Exchange |

| • | Securities Investor Protection Corporation |
|--------|--------------------------------------------|

----

**Table of Contents**

| • | Market Wise Securities, LLC ("MW Securities"),      a FINRA broker-dealer |
|--------|---------------------------------------------------------------------------|
| • | QNT, LLC, a new subsidiary, formed on July      27, 2009                  |

----

**Table of Contents**

----

**Tableof Contents**

----

**Table of Contents**

|                                             |
|--------------------------------------------------|
|                                             | For Three Months Ended September 30, |   | For Nine Months Ended September 30, |
|                                             |   | 2009 |   |   |   | 2008 |   |   |   | 2009 |   |   |   | 2008 |   |
| Weighted average shares      outstanding - Basic |   | 25,054,508 |   |   |   | 25,520,694 |   |   |   | 25,328,622 |   |   |   | 25,987,771 |   |
| Weighted average shares outstanding - Diluted    |   | 25,054,508 |   |   |   | 25,520,694 |   |   |   | 25,328,622 |   |   |   | 25,987,771 |   |
|                                             |

----

**Table of Contents**

|                                                                                                                         | **Three Months Ended September 30,** |            | **Nine Months Ended September 30,** |
|------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|-----------------|-------------------------------------|
|                                                                                                                              |                                 | **2009**        |                                |   |   | 2008 |   |   |   | **2009** |   |   |   | 2008 |   |
| **Revenues:**                                                                                                                |                                 | **(Unaudited)** |                                |   |   | (Unaudited) |   |   |   | **(Unaudited)** |   |   |   | (Unaudited) |   |
| **Brokerage Services      Segment**                                                                                          |                                 |            |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues, excluding interest                                                                                                 | **$**                                | **6,443,640**   |                                |   | $ | 8,310,314 |   |   | **$** | ****20,024,132**** |   |   | $ | 23,798,418 |   |
| Interest income                                                                                                              |                                 | **329,017**     |                                |   |   | 1,376,672 |   |   |   | ****1,189,231**** |   |   |   | 4,848,101 |   |
| Interest expense on brokerage accounts                                                                                       |                                 | **-**           | ** **                          |   |   | (187,260 | ) |   |   | **-** |   |   |   | (1,009,689 | ) |
| Totals                                                                                                                       |                                 | **6,772,657**   |                                |   |   | 9,499,726 |   |   |   | **21,213,363** |   |   |   | 27,636,830 |   |
|                                                                                                                         |                                 |                 |                                |   |   |  |   |   |   |  |   |   |   |   |   |
| **Software Services Segment**                                                                                                |                                 |                 |                                |   |   |  |   |   |   |  |   |   |   |   |   |
| Revenues                                                                                                                     |                                 | **447,458**     |                                |   |   | 821,213 |   |   |   | **1,507,365** |   |   |   | 2,124,879 |   |
|                                                                                                                         |                                 |                 |                                |   |   |  |   |   |   |  |   |   |   |   |   |
| Elimination of intercompany charges from             the Software segment to Brokerage segment |                                 | **(217,680**    | **)**                               |   |   | (610,392 | ) |   |   | ****(790,387**** | ) |   |   | (1,561,722 | ) |
| Totals                                                                                                                       |                                 | **229,778**     |                                |   |   | 210,821 |   |   |   | **716,978** |   |   |   | 563,157 |   |
|                                                                                                                         |                                 |                 |                                |   |   |  |   |   |   |  |   |   |   |   |   |
|       Net      revenues                                                                        | **$**                                | **7,002,435**   |                                |   | $ | 9,710,547 |   |   | $ | **21,930,341** |   |   | $ | 28,199,987 |   |
|                                                                                                                         |                                 |            |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Depreciation and amortization**                                                                                            |                                 |            |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Brokerage Services Segment                                                                                                   | **$**                                | **401,418**     |                                |   | $ | 385,552 |   |   | **$** | ****1,185,523**** |   |   | $ | 1,156,261 |   |
| Software Services Segment                                                                                                    |                                 | **83,299**      |                                |   |   | 111,816 |   |   |   | ****235,254**** |   |   |   | 269,670 |   |
| Corporate and Unallocated                                                                                                    |                                 | **98,945**      |                                |   |   | 98,555 |   |   |   | ****295,139**** |   |   |   | 295,923 |   |
| Totals                                                                                                                       | **$**                                | **583,662**     |                                |   | $ | 595,923 |   |   | **$** | ****1,715,916**** |   |   | $ | 1,721,854 |   |
|                                                                                                                         |                                 |            |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income (loss) before      income taxes**                                                                                   |                                 |            |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Brokerage Services Segment                                                                                                   | **$**                                | **160,704**     |                                |   | $ | (1,704,096**** | ) |   | **$** | ****1,239,343**** |   |   | $ | 164,503 |   |
| Software Services Segment                                                                                                    |                                 | **(196,342**    | **)**                               |   |   | 268,571 |   |   |   | ****(377,050**** | **)** |   |   | 365,925 |   |
| Corporate and Unallocated                                                                                                    |                                 | **(966,750**    | **)**                               |   |   | (743,539 | ) |   |   | ****(2,754,876**** | **)** |   |   | (1,630,017 | ) |
| Totals                                                                                                                       | **$**                                | **(1,002,388**  | **)**                               |   | $ | (2,179,064 | ) |   | **$** | ****(1,892,583**** | **)** |   | $ | (1,099,589 | ) |
|                                                                                                                         |                                 |            |                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                              |                                 |            |                                |   |   |   |   |   |   | **September 30,** |   |   |   | December 31, |   |
| **Total Assets**                                                                                                             |                                 |            |                                |   |   |   |   |   |   | **2009** |   |   |   | 2008 |   |
| Brokerage Services Segment                                                                                                   | ****                                 |            |                                |   |   |   |   |   | **$** | **212,465,319** |   |   | $ | 181,868,725 |   |
| Software Services Segment                                                                                                    |                                 |            |                                |   |   |   |   |   |   | **706,457** |   |   |   | 733,125 |   |
| Corporate and Unallocated                                                                                                    |                                 |            |                                |   |   |   |   |   |   | **4,025,274** |   |   |   | 4,345,678 |   |
| Total assets                                                                                                                 | ****                                 |            |                                |   |   |   |   |   | **$** | **217,197,050** |   |   | $ | 186,947,528 |   |
|                                                                                                                         |                                 |            |                                |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Table of Contents**

----

**Table of Contents**

|                        |
|-----------------------------|
|                             |   |   |   |   | Minimum Net Capital Requirement |   | Excess Net Capital |
|                             |   | Net Capital |   |   |   | SEC |   |   |   | CFTC |   |   |   | SEC |   |   |   | CFTC |   |
| Terra Nova Financial, LLC   | $ | 11,301,401 |   |   | $ | 1,500,000 |   |   | $ | 500,000 |   |   | $ | 9,801,401 |   |   | $ | 10,801,401 |   |
| Market Wise Securities, LLC | $ | 29,598 |   |   | $ | 5,000 |   |   | $ | - |   |   | $ | 24,598 |   |   | $ | - |   |
|                        |

|   |                                          |   |
|--------|-----------------------------------------------|--------|
|   | Employee      Stock Option and Warrant Plans  |   | Authorized |   |   |   | Outstanding |   |   |   | Available |   |   |
|   | 2005 Long-Term Incentive      Plan ("LTIP")   |   | 4,361,564 |   |   |   | 1,103,024 |   |   |   | 3,258,540 |   |   |
|   | 2006 Warrant      Incentive Plan ("2006 WIP") |   | 3,500,000 |   |   |   | 3,027,500 |   |   |   | 472,500 |   |   |
|   | Balance at September 30,      2009            |   | 7,861,564 |   |   |   | 4,130,524 |   |   |   | 3,731,040 |   |   |
|   |                                          |   |

----

**Table of Contents**

|   |                                      |   |
|--------|-------------------------------------------|--------|
|   | Employee Stock Options                    |   | Employee         Stock Options        Outstanding |   | Weighted        Average        Exercise Price |   | Weighted         Average         Remaining         Contract Term        (in years) |   |   | Aggregate        Intrinsic Value |   |   |
|   | Balance at December 31, 2008              |   |   | 589,274 |   |   | $ | 1.71 |   |   |   | 3.7 |   |   | $ | - |   |   |
|   | Granted                                   |   |   | 600,000 |   |   |   | 0.80 |   |   |   | 4.8 |   |   |   | - |   |   |
|   | Exercised                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |
|   | Cancelled                                 |   |   | (86,250 | ) |   |   | 1.65 |   |   |   | - |   |   |   | - |   |   |
|   | Balance at September 30,      2009        |   |   | 1,103,024 |   |   | $ | 1.22 |   |   |   | 4.0 |   |   | $ | - |   |   |
|   | Options exercisable at September 30, 2009 |   |   | 286,137 |   |   | $ | 1.80 |   |   |   | 2.8 |   |   | $ | - |   |   |
|   |                                      |   |

|   |                                       |   |
|--------|--------------------------------------------|--------|
|   | Employee      Warrants                     |   | Employee        Warrants        Outstanding |   | Weighted        Average        Exercise Price |   | Weighted        Average        Remaining        Contract Term        (in years) |   |   | Aggregate         Intrinsic Value |   |   |
|   | Balance at December 31,      2008          |   |   | 3,027,500 |   |   | $ | 2.56 |   |   |   | 2.6 |   |   | $ | - |   |   |
|   | Granted                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |
|   | Exercised                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |
|   | Cancelled                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |
|   | Balance at September 30,      2009         |   |   | 3,027,500 |   |   | $ | 2.56 |   |   |   | 1.8 |   |   | $ | - |   |   |
|   | Warrants exercisable at September 30, 2009 |   |   | 3,027,500 |   |   | $ | 2.56 |   |   |   | 1.8 |   |   | $ | - |   |   |
|   |                                       |   |

----

**Table of Contents**

|                                      |
|-------------------------------------------|
|                                           |   |   |   | September 30, 2009 |   | December 31, 2008 |
|                                      |   | Estimated        Useful Life        in Years |   | Property and        equipment |   | Capitalized        software        development        costs |   | Property and        equipment |   | Capitalized         software        development        costs |
| Computer and software                     |   | 3-5 |   | $ | 735,199 |   |   | $ | 2,923,466 |   |   | $ | 668,531 |   |   | $ | 2,780,628 |   |
| Furniture, fixtures and equipment         |   | 3-7 |   |   | 1,193,624 |   |   |   | - |   |   |   | 1,185,672 |   |   |   | - |   |
| Leasehold improvements                    |   | 5-10 |   |   | 119,589 |   |   |   | - |   |   |   | 119,590 |   |   |   | - |   |
|                                      |   |   |   |   | 2,048,412 |   |   |   | 2,923,466 |   |   |   | 1,973,793 |   |   |   | 2,780,628 |   |
|                                      |   |   |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Accumulated depreciation and amortization |   |   |   |   | (740,654 | ) |   |   | (1,124,891 | ) |   |   | (752,727 | ) |   |   | (720,613 | ) |
| Net balance                               |   |   |   | $ | 1,307,758 |   |   | $ | 1,798,575 |   |   | $ | 1,221,066 |   |   | $ | 2,060,015 |   |
|                                      |

|   |                                                      |               |
|--------|-----------------------------------------------------------|--------------------|
|   | Financial instruments owned, at fair      value:          | September 30, 2009 |   |
|   | Money market funds      held in cash and cash equivalents | $                  | 5,928,557 |   |   |
|   | U.S. Treasury securities held as clearing      deposits   |               | 13,895,425 |   |   |
|   | Total                                                     | $                  | 19,823,982 |   |   |
|   |                                                      |               |

| • | Level 1- Quoted prices (unadjusted) in active      markets for identical assets or liabilities that the Company has the ability      to access.                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 2- Inputs other than quoted prices included      in Level 1 that are observable for the asset or liability, either directly      or indirectly. Such inputs include quoted prices in markets that are not      active, quoted prices for similar assets and liabilities in active markets,      inputs other than quoted prices that are observable for the asset or liability      and inputs that are derived principally from or corroborated by observable      market data by correlation or other means. |
| • | Level 3 - Unobservable inputs for the asset      or liability, where there is little, if any, observable market activity      or data for the asset or liability.                                                                                                                                                                                                                                                                                                                                                    |

----

**Tableof Contents**

|                                                      |
|-----------------------------------------------------------|
|                                                           |   | Quoted Prices in        Active Markets         for Identical        Assets |   | Significant         Other         Observable        Inputs |   | Significant         Unobservable         Inputs |   |   |   |   |
| Financial      instruments owned, at fair value:          |   |   | Level 1 |   |   |   | Level 2 |   |   |   | Level 3 |   |   |   | Total |   |
| Money market funds held      in cash and cash equivalents |   | $ | 5,928,557 |   |   | $ | - |   |   | $ | - |   |   | $ | 5,928,557 |   |
| U.S. Treasury securities held as clearing deposits        |   |   | 13,895,425 |   |   |   | - |   |   |   | - |   |   |   | 13,895,425 |   |
| Total                                                     |   | $ | 19,823,982 |   |   | $ | - |   |   | $ | - |   |   | $ | 19,823,982 |   |
|                                                      |

|   |                                     |   |
|--------|------------------------------------------|--------|
|   |                                          |   | September 30, 2009 |   | December 31, 2008 |   |
|   |                                          |   |   | Receivables |   |   |   | Payables |   |   |   | Receivables |   |   |   | Payables |   |   |
|   | Securities borrowed/loaned               |   | $ | 16,398,975 |   |   | $ | - |   |   | $ | 4,332,350 |   |   | $ | - |   |   |
|   | Clearing deposits & receivables/payables |   |   | 16,508,256 |   |   |   | 1,191,819 |   |   |   | 9,236,109 |   |   |   | 913,621 |   |   |
|   | Total                                    |   | $ | 32,907,231 |   |   | $ | 1,191,819 |   |   | $ | 13,568,459 |   |   | $ | 913,621 |   |   |
|   |                                     |   |

----

**Table of Contents**

| • | Attract sophisticated traders by providing      access to algorithmic trading, "black box" and non-click trading strategies;     |
|--------|----------------------------------------------------------------------------------------------------------------------------------|
| • | Attract international active trading clients      who are interested in the U.S. markets;                                        |
| • | Attract displaced institutional trading professionals      who may turn to independent trading or trade group participation; and |
| • | Capture new prime brokerage clients by attracting      underserved small to mid-sized hedge funds.                               |

----

**Table of Contents**

| • | Enhance the Tradient platforms and application      program interface ("API");    |
|--------|-----------------------------------------------------------------------------------|
| • | Broaden the set of platforms from which to      choose;                           |
| • | Refine complex options strategy offerings across      all trading platforms;      |
| • | Accessibility to portfolio margining; and                                         |
| • | Ability to trade futures products on proprietary      Tradient trading platforms. |

| • | Enhance the lead pipeline through increased      web-based marketing and advertising programs targeted at highly active traders; |
|--------|----------------------------------------------------------------------------------------------------------------------------------|
| • | Increase the sales team personnel; and                                                                                           |
| • | Enable the sales team with improved tools and      support.                                                                      |

| • | Optimize order-flow costs;                                                                             |
|--------|--------------------------------------------------------------------------------------------------------|
| • | Continue to align costs of order routing with      third-party platforms; and                          |
| • | Continue to reduce cost structure by optimizing      a variety of management and IT systems processes. |

----

**Tableof Contents**

----

**Table of Contents**

|   |                                           |   | **Three Months Ended September 30,** |            | **Nine Months Ended Septermber 30,** |   |
|--------|------------------------------------------------|--------|--------------------------------------|-----------------|--------------------------------------|--------|
|   |                                                |   |                                 | **2009**        |                                 |   | 2008 |   |   | **2009** |   |   | 2008 |   |
|   |                                           |   |                                 | **(Unaudited)** |                                 |   |   | (Unaudited) |   |   |   | **(Unaudited)** |   |   |   | (Unaudited) |   |   |
|   | Commissions and fees                           |   | **$**                                | **6,288,807**   |                                 |   |   | 8,147,071 |   |   | **$** | **19,761,940** |   |   |   | 23,438,687 |   |   |
|   |                                           |   |                                 | ****            |                                 |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Interest income                                |   |                                 | **329,017**     |                                 |   |   | 1,376,672 |   |   |   | **1,189,231** |   |   |   | 4,848,101 |   |   |
|   | Interest expense on brokerage accounts         |   |                                 | **-**           |                                 |   |   | 187,260 |   |   |   | **-** |   |   |   | 1,009,689 |   |   |
|   | Net interest income                            |   |                                 | **329,017**     |                                 |   |   | 1,189,412 |   |   |   | **1,189,231** |   |   |   | 3,838,412 |   |   |
|   |                                           |   |                                 | ****            |                                 |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Software fees, net                             |   |                                 | **229,778**     |                                 |   |   | 210,821 |   |   |   | **716,978** |   |   |   | 563,157 |   |   |
|   | Other revenue                                  |   |                                 | **154,833**     |                                 |   |   | 163,243 |   |   |   | **262,192** |   |   |   | 359,731 |   |   |
|   | **Net revenues**                               |   |                                 | **7,002,435**   |                                 |   |   | 9,710,547 |   |   |   | **21,930,341** |   |   |   | 28,199,987 |   |   |
|   |                                           |   |                                 | ****            |                                 |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Commissions and clearing                       |   |                                 | **2,575,546**   |                                 |   |   | 2,488,600 |   |   |   | **7,663,804** |   |   |   | 8,267,603 |   |   |
|   | Compensation and benefits                      |   |                                 | **2,216,306**   |                                 |   |   | 2,315,995 |   |   |   | **6,616,982** |   |   |   | 7,125,321 |   |   |
|   | Software and market data                       |   |                                 | **741,207**     |                                 |   |   | 1,330,087 |   |   |   | **2,494,848** |   |   |   | 4,580,196 |   |   |
|   | Advertising and promotional                    |   |                                 | **161,798**     |                                 |   |   | 214,906 |   |   |   | ****456,139**** |   |   |   | 470,091 |   |   |
|   | Professional fees                              |   |                                 | **653,566**     |                                 |   |   | 736,876 |   |   |   | **2,032,802** |   |   |   | 2,048,807 |   |   |
|   | Communications and information technology      |   |                                 | **246,875**     |                                 |   |   | 189,618 |   |   |   | **713,341** |   |   |   | 637,712 |   |   |
|   | Depreciation and amortization                  |   |                                 | **583,662**     |                                 |   |   | 595,923 |   |   |   | **1,715,916** |   |   |   | 1,721,854 |   |   |
|   | Bad debt expense                               |   |                                 | ****-****       |                                 |   |   | 3,553,296 |   |   |   | **-** |   |   |   | 3,470,890 |   |   |
|   | Other general and administrative      expenses |   |                                 | **825,863**     |                                 |   |   | 464,310 |   |   |   | **2,129,092** |   |   |   | 977,102 |   |   |
|   | **Total expenses**                             |   |                                 | **8,004,823**   |                                 |   |   | 11,889,611 |   |   |   | ****23,822,924**** |   |   |   | 29,299,576 |   |   |
|   |                                           |   |                                 | ****            |                                 |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Loss before income taxes                       |   |                                 | **(1,002,388**  | **)**                                |   |   | (2,179,064 | ) |   |   | **(1,892,583** | **)** |   |   | (1,099,589 | ) |   |
|   |                                           |   |                                 | ****            |                                 |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Income tax benefit                             |   |                                 | **392,021**     |                                 |   |   | 785,814 |   |   |   | **737,021** |   |   |   | 277,696 |   |   |
|   |                                           |   |                                 | ****            |                                 |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | **Net loss**                                   |   | **$**                                | **(610,367**    | **)**                                |   | $ | (1,393,250 | ) |   | **$** | **(1,155,562** | **)** |   | $ | (821,893 | ) |   |
|   |                                           |   |                                 |            |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Table of Contents**

| • | Net loss for the nine months ended September      30, 2009 of $1,155,562 includes the following non-cash expenses among other      non-cash items: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ° | Depreciation expense on property      and equipment of $284,026 |
|--------|--------|-----------------------------------------------------------------|
|   | ° | Amortization expense on capitalized      software of $404,277   |
|   | ° | Amortization expense on intangible      assets of $1,027,613    |
|   | ° | Share-based compensation of $91,264                             |

| • | Overall trading activity based on tickets was      down 29% and reflects a 28% decrease in the number of tickets executed on      third-party software trading platforms and a 34% decline in the tickets      executed on the Tradient proprietary platforms during the nine months ended      September 30, 2009 compared to the same period in 2008.                                                                                                                                                                                                                                                    |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Higher net software fees of $153,821 from Tradient      platform subscriptions for the nine months ended September 30, 2009 versus      the same period last year. The number of Tradient platforms users declined      from 2,804 as of September 30, 2008 to 2,070 as of September 30, 2009. The      net increase in net software fees was primarily due to fewer platform users      qualifying for a software rebate for the nine months ended September 30,      2009 compared to the same period last year. The software rebate is based      on users achieving certain trading levels each month. |
| • | Posted average revenue per employee of approximately      $78,700 based on eighty-nine full-time employees for the three months ended      September 30, 2009 compared to $107,900 based on ninety full-time employees      for the same period in 2008. Revenue per employee was down for the three      months ended September 30, 2009 compared to the same period last year due      to lower net interest income and commission revenue.                                                                                                                                                              |

----

**Table of Contents**

----

**Table of Contents**

----

**Table of Contents**

----

**Tableof Contents**

----

**Tableof Contents**

----

**Tableof Contents**

| Exhibit No.       | Description                                                                                                                                                                                                                      |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit      31.1 | Certification      of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)                                                                                                                                       |
| Exhibit      31.2 | Certification      of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)                                                                                                                                       |
| Exhibit      32.1 | ertification      of Chief Executive Officer and Chief Financial Officer Pursuant to Rule      13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant      to Section 906 of the Sarbanes-Oxley Act of 2002 |
|              |                                                                                                                                                                                                                             |

----

****

|   |                    | Terra Nova Financial Group, Inc.       (Registrant)                                                                       |
|--------|-------------------------|---------------------------------------------------------------------------------------------------------------------------|
|   |                    |                                                                                                                      |
|   | Date: November 13, 2009 | /s/ Michael G. Nolan                                                                                                      |
|   |                    | Michael G. Nolan                                                                                                          |
|   |                    | President and Chief Executive Officer      (Principal Executive Officer)                                                  |
|   |                    |                                                                                                                      |
|   | Date: November 13, 2009 | /s/ Murrey Wanstrath                                                                                                      |
|   |                    | Murrey Wanstrath       Chief Financial Officer       (Principal Financial Officer and       Principal Accounting Officer) |
|   |                    |                                                                                                                      |
|   |                    |                                                                                                                      |
|   |                    |                                                                                                                      |

----