UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



Form 10-K/A

Amendment No. 1
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the fiscal year ended:December 31, 2008

Commission file number:000-52048


Cowen Group, Inc.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

84-1702964(I.R.S. Employer
Identification No.)


1221 Avenue of the Americas
New York, New York 10020
(646) 562-1000(Address, including zip code, and telephone number, including area code, of registrant's principal executive office)

Securities
registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, par value $0.01 per share

The Nasdaq Global Market


Securities
registered pursuant to Section 12(g) of the Act: None



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Act.    Yes o    No ý

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 ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Annual Report on Form 10-K or any
amendment to the Annual Report on Form 10-K.    ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer ý

Non-accelerated filer o

Smaller reporting company o


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

The aggregate market value of the common stock of the registrant held by non-affiliates of the registrant on June 30, 2008, the last business
day of the registrant's most recently completed second fiscal quarter was: $110,914,637.

As
of March 4, 2009 there were 15,171,432 shares of the registrant's common stock outstanding.



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Explanatory Note

Cowen Group, Inc. (the "Company") is filing this Amendment No. 1 on Form 10-K/A to its Annual Report
on Form 10-K for the fiscal year ended December 31, 2008 (the "Form 10-K") to provide additional information required by Part III, because the
definitive Proxy Statement for our 2009 Annual Meeting of Stockholders will not be filed within 120 days after the end of our 2008 fiscal year. This Amendment No. 1 on
Form 10-K/A does not change the previously reported financial statements or any of the other disclosure contained in Part I or Part II. Part IV is being amended
solely to add new certifications in accordance with Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

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PART III

Item 10.    Directors, Executive Officers and Corporate Governance

DIRECTORS OF THE COMPANY

The number of directors currently serving on our Board of Directors is six. Our Board of Directors is divided into three classes.
Except for the initial appointment of directors in connection with our initial public offering and the appointment of David M. Malcolm on March 4, 2008, the members of each class have
been elected by our stockholders to serve a three-year term with the term of office for each class ending in consecutive years.

Set
forth below is biographical information for each of our directors. All ages are as of April 15, 2009.

Name

Age

ClassTerm Expiring

Director
SinceJohn E. Toffolon, Jr.(1)(2)


58

II2011 Annual Meeting


2006David M. Malcolm


61

I2009 Annual Meeting


2008Jeffrey Kurzweil(3)


59

II2011 Annual Meeting


2006Philip B. Pool, Jr.(1)(2)


55

III2010 Annual Meeting


2006L. Thomas Richards, M.D.(1)(3)


39

I2009 Annual Meeting


2006Charles W.B. Wardell, III(2)(3)


63

III2010 Annual Meeting


2006


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John E. Toffolon, Jr.:Mr. Toffolon has served as our non-Executive Chairman since July 2008. Mr. Toffolon
previously served as our Lead Director from June 2007 until his appointment as Chairman. Mr. Toffolon is a partner of The Shermen Group and is the Chief Financial Officer and a member of the
Board of Directors of Shermen WSC Acquisition Corp., a blank check public company formed for the purpose of acquiring an operating business in the alternative energy and/or agricultural field. From
2001 to 2003, Mr. Toffolon served as an advisor to the Chairman and Chief Executive Officer of Royster-Clark, Inc., a privately-held chemicals distribution company. From 1992
to 2000, Mr. Toffolon served in various capacities, including Executive Managing Director, Chief Financial Officer and Chief Administrative Officer for Nomura Holding America, Inc. and
Nomura Securities International, Inc. Mr. Toffolon also served as a member of the Boards of Directors of both Nomura companies. From 1979 to 1990, Mr. Toffolon worked at The First
Boston Corporation as a Managing Director in various capacities, including Chief Financial Officer and served on the Management and Capital Commitment Committees.

David M. Malcolm:Mr. Malcolm currently serves as our Chief Executive Officer and President, a position he has held since
March 4, 2008. Mr. Malcolm has also served as Chairman, Chief Executive Officer and President of Cowen and Company, LLC since March 4, 2008. Mr. Malcolm previously
served as our Executive Vice Chairman from October 2006. From 2001 through 2006, Mr. Malcolm served as Head of Investment Banking. He joined the Company in 2000 as Chairman of the Executive
Committee from Société Générale where he served as Head of Leveraged Finance. Prior to joining Société
Générale in 1996, Mr. Malcolm was a Senior Managing Director at Bear Stearns. Mr. Malcolm also served as a Managing Partner of Anthem Partners, L.P.,
an advisory investment banking boutique.

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Prior
to that, Mr. Malcolm was a Managing Director of The First Boston Corporation, where he founded and ran the High Yield Finance Group.

Jeffrey Kurzweil:Mr. Kurzweil has been a partner with the law firm Venable LLP since 2002. Mr. Kurzweil focuses his
practice on
public policy and government relations at the federal, state, and local levels. Prior to joining Venable, Mr. Kurzweil was a sole practitioner for six years from 1998 to 2002 during which time
he also focused on public policy and government relations. Prior to that, Mr. Kurzweil was a partner at several Washington, D.C. firms. In government service from 1978 to 1979,
Mr. Kurzweil served as Special Assistant to the General Counsel of the U.S. Department of Commerce. Mr. Kurzweil is a cum laude graduate of Duke University and received his law degree
from Vanderbilt Law School. Mr. Kurzweil has served on the Board of Trustees of Duke University, the Board of Visitors of Johnson C. Smith University, the Alumni Board of Vanderbilt Law School,
and the Board of Directors of The American Schools of Oriental Research. In addition to serving as a director of Cowen Group, Inc., Mr. Kurzweil also currently serves as one of two
non-family members of the Board of Directors of JWM Family Enterprises, a Marriott Family private enterprise.

Philip B. Pool, Jr.:Mr. Pool currently serves as a Managing Director of Navidar Group, LLC, a private placement
firm
specializing in capital raising and advisory services for private equity firms. From 2001 to March 2009, Mr. Pool was a Managing Director of Willis Stein & Partners, a middle market
leveraged buyout firm. Prior to joining Willis Stein in July 2001, Mr. Pool was a Managing Director in the Investment Banking Group of Credit Suisse First Boston Corporation, or CSFB, where he
worked from November 2000 to May 2001 following CSFB's acquisition of Donaldson, Lufkin & Jenrette Securities Corporation, or DLJ. Mr. Pool joined DLJ in 1994, where he
co-headed the Private Fund Group. From 1985 to 1994, Mr. Pool was an investment banker with Merrill Lynch & Co., and from 1980 to 1985, he was an investment banker
with Kidder, Peabody & Co. Incorporated.

L. Thomas Richards, M.D.:Dr. Richards is an Emergency Medicine physician who serves on the Clinical
Faculty of UCSF Medical Center. Dr. Richards is a 2003 graduate of Harvard Medical School and a graduate of Yale College. Prior to attending medical school in 1999, Dr. Richards was an
investment banker in the Mergers & Acquisitions departments of several firms, including Lazard Frères & Co, UBS Securities LLC and Cowen and Company, LLC.

Charles W.B. Wardell, III:Mr. Wardell is the Senior Advisor to the Chief Executive Officer at Korn/Ferry. Korn/Ferry
International is an executive search firm with more than 70 offices throughout the world. Mr. Wardell has eight years of service with Korn/Ferry. Prior to joining Korn/Ferry, Mr. Wardell
held senior positions at a number of firms, including Nordeman Grimm, American Express, Travelers, Mastercard International and Citicorp. Mr. Wardell also served as Deputy Special Assistant and
Staff Assistant to Presidents Nixon and Ford, Administrative Aide to General Alexander Haig and Richard Cheney when they served as President Nixon's and Ford's Chief of Staff, respectively, and was
appointed by President Ford as a Deputy Assistant Secretary of State. Mr. Wardell graduated from Harvard College and was honorably discharged as an officer in the Army after distinguished
service in Vietnam.

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EXECUTIVE OFFICERS OF THE COMPANY

Biographies of the current executive officers of the Company are set forth below, excluding Mr. Malcolm's biography, which is
included under "Directors of the Company" above. Each executive officer serves at the discretion of the Board of Directors.

Thomas K. Conner

Age: 48Mr. Conner has been Chief Financial Officer of Cowen Group, Inc. since June 2006 and is a member of the Office of the Chief Executive, or the OCE.
Mr. Conner has served as Chief Financial Officer of Cowen and Company, LLC and its predecessor entities since July 2003. He joined the Company in 1992 as Division Financial Officer for the firm's investment banking activities. Prior to
joining Cowen and Company, LLC, Mr. Conner worked for TLP Leasing Programs in Boston, where he managed the accounting operations of 15 public and 15 private limited partnerships. From 1987 to 1989, Mr. Conner worked for Atlantic
Capital Corporation. He began his career at Deloitte Haskins & Sells in 1983.William H. Dibble

Age: 55Mr. Dibble has served as Head of Human Resources of Cowen Group, Inc. since its formation in February 2006 and is a member of the OCE. Mr. Dibble joined the
Company as Head of Human Resources in August 2004. Prior to joining the Company, Mr. Dibble had more than 20 years of human resources experience within the financial services industry. Most recently, Mr. Dibble was Head of Human
Resources for Nomura Securities from 2002 to 2004. Prior to Nomura, Mr. Dibble held a variety of human resources roles at The First Boston Corporation, Marsh & McLennan and Merrill Lynch focusing on benefits, compensation, performance
management, employee relations, training and development, succession planning and recruiting.Mark A. Egert

Age: 46Mr. Egert has served as Chief Compliance Officer of Cowen Group, Inc. since its formation in February 2006 and is a member of the OCE. Mr. Egert joined the
Company as Chief Compliance Officer in January 2005. Prior to joining the Company, Mr. Egert was Legal & Compliance Director for RBC Capital Markets Corporation, a subsidiary of the Royal Bank of Canada, from 2003 to January 2005. From
2001 to 2003, he was Chief Legal Officer of ABN AMRO Inc., the U.S. broker-dealer affiliate of Dutch bank, ABN AMRO, and served in other positions at that firm from 1997 to 2001. Mr. Egert also was associated with the law firms of
Shearman & Sterling from 1987 to 1992 and Kavanagh Peters Powell & Osnato from 1992 to 1994, and was Vice President and Associate General Counsel at the Securities Industry Association from 1994 to 1997.J. Kevin McCarthy

Age: 44Mr. McCarthy has served as General Counsel of Cowen Group, Inc. since December 2006 and is a member of the OCE. Mr. McCarthy is also the General Counsel of
Cowen and Company, LLC. From 2004 until he joined the Company in December 2006, Mr. McCarthy was a partner at Wilmer Cutler Pickering Hale and Dorr LLP in New York. From 1996 to 2004, Mr. McCarthy was with Credit Suisse First
Boston, where he served in a variety of capacities, most recently as Managing Director and Global Head of Litigation. He began his legal career at Willkie Farr & Gallagher in 1990.Christopher A. White

Age: 44Mr. White has been the Vice President of Cowen Group, Inc. since its formation in February 2006 and is a member of the OCE. Mr. White has served as Chief of
Staff of Cowen and Company, LLC and its predecessor entities since December 2005 and as Chief Administrative Officer of Cowen and Company, LLC and its predecessor entities since June 2006. Mr. White served as a member of SG Capital
Partners, the Merchant Banking Division of Cowen and Company, LLC, from 2003 to December 2005. Prior to joining the Merchant Banking Division, Mr. White was in the Equity Capital Markets Group of Cowen and Company, LLC. Prior to
joining Cowen in 1999, Mr. White worked at Salomon Smith Barney in the Equity Capital Markets Group. In addition, Mr. White has seven years experience as a practicing securities and mergers and acquisitions lawyer.


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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive officers and directors to file initial reports of ownership of our
securities and reports of changes in ownership of our securities with the Securities and Exchange Commission.

Based
on a review of copies of such reports and on written representations from our executive officers and directors, we believe that all Section 16(a) filing and disclosure
requirements applicable to our executive officers and directors for 2008 have been satisfied.

CODE OF BUSINESS CONDUCT AND ETHICS

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our
principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the code on our website,
www.cowen.com. In addition, we intend to post on our website all disclosures that are required by law or Nasdaq Stock Market listing standards concerning any amendments to, or waivers from, any
provision of the code. You may also request a copy of the code by writing to Cowen Group, Inc., Attn: Corporate Secretary, 1221 Avenue of the Americas, New York, NY 10020.

AUDIT COMMITTEE

Our Board has established a separately-designated standing Audit Committee which operates under a charter that has been approved by our
Board.

Our
Board has determined that all of the members of the Audit Committee are independent as defined under the rules of the Nasdaq Stock Market, and the independence requirements
contemplated by Rule 10A-3 under the Exchange Act.

The
current members of our Audit Committee are Messrs. Toffolon (Chairperson) and Pool and Dr. Richards. The Board has determined that each of Messrs. Toffolon and
Pool, who are independent directors, is an "audit committee financial expert" as defined by applicable SEC rules.

Item 11.    Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

Each of our "named executive officers" listed in the Summary Compensation Table served as an executive officer for the full year period
ending on December 31, 2008, with the exception of Mr. Malcolm, who was appointed Chief Executive Officer, President and a director of the Company by our Board of Directors on
March 4, 2008, and Kim S. Fennebresque, who served as our Chief Executive Officer and President until his resignation on March 4, 2008. Our "named executive officers" for 2008
consisted of the following individuals:



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Other
than Mr. Fennebresque, each of the named executive officers was a member of our Office of the Chief Executive, or the OCE, as of December 31, 2008. Subject to the
oversight of our Board of Directors, the OCE is responsible for establishing policies and procedures regarding overall corporate decisions, including investment decisions, legal, regulatory and
compliance matters, insurance coverage, human resources and administration and tax matters. In addition, the OCE sets general compensation policies, determines our financing requirements, objectives
and principles, and considers, where appropriate, acquisitions, dispositions and other significant transactions. In addition to the named executive officers listed above, our other executive officer
is the Head of Human Resources, who is a member of the OCE. The members of the OCE are appointed annually by our Chief Executive Officer.

On
March 4, 2008, Kim S. Fennebresque resigned as Chief Executive Officer and President of the Company. Mr. Fennebresque resigned as Non-Executive
Chairman and as a director of the Company effective July 15, 2008. Mr. Fennebresque is currently employed by the Company as a Senior Advisor. As a result of these changes, our discussion
of compensation decisions for 2008 includes a discussion of our compensation philosophy and elements generally, but separately focuses on three categories: (i) Mr. Malcolm's 2008
compensation; (ii) compensation decisions for our "named executive officers" other than Messrs. Malcolm and Fennebresque; and (iii) arrangements relating to
Mr. Fennebresque's resignation as Chief Executive Officer and President and his employment as a Senior Advisor.

Compensation Philosophy and Objectives

Historically, we have sought to maintain a ratio of compensation and benefit expense to revenues in an amount between 58% and 60%,
excluding expense associated with the initial grant of restricted stock and options in connection with our initial public offering in 2006. Market conditions deteriorated throughout 2008, and our
revenues likewise suffered as the capital raising portion of our revenue base was effectively eliminated. Based on our performance in 2008, we elected to accrue compensation at 62% of revenues,
excluding expense associated with the initial grant of equity in connection with our initial public offering. The success of our business is based largely on the quality of our employees, and we must
continually monitor the market for their services and seek to offer competitive compensation. We will continue to attempt to maintain compensation levels within our target range; however, we believe
it is in our stockholders' best interest to attempt to minimize employee turnover as a result of paying below market compensation. As a result, we have in the past reviewed, and will continue to
review, our compensation to revenue ratio on a quarterly basis. There can be no assurance that we will be able to achieve our target levels under difficult market conditions.

Our
compensation program, including compensation of the named executive officers, is designed to achieve three objectives:



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Setting Compensation

The Compensation Committee is responsible for approving the compensation paid to our named executive officers as well as certain other
highly-compensated employees. Although the Compensation Committee has the authority to approve compensation for
these individuals, the Compensation Committee has elected to present its compensation recommendations to the full Board of Directors for approval as a matter of good corporate governance. At the end
of each year, the Compensation Committee recommends to the Board that the Board approve the amount of total compensation to be paid to such individuals. In making compensation determinations, the
Compensation Committee reviews information presented to them by the Company's executive officers, compensation peer group information and the recommendations of a compensation consultant engaged by
the Committee. The Compensation Committee reviews our compensation to revenue ratio on a quarterly basis and may adjust the compensation to revenue ratio in order to maintain the Company's
compensation philosophy of aligning the interests of our executive officers and our stockholders.



Our Chief Executive Officer, in consultation with our Vice President, our General Counsel and employees in our Human Resources
department, assists the Compensation Committee with its work. These individuals assist the Compensation Committee by presenting information to the Compensation Committee and making recommendations for
the Compensation Committee's review and consideration. Such information and recommendations include, among other things, the compensation that should be received by the executive officers and certain
other highly compensated employees; performance evaluations; financial information regarding the Company that should be reviewed in connection with compensation decisions; the firms to be included in
a compensation peer group; and the evaluation and compensation process to be followed by the Compensation Committee. Our Chief Executive Officer recused himself from all discussions regarding his
compensation recommendations and determinations.



In making compensation decisions, our Compensation Committee reviewed two sets of peer group data. One set of data included a
compensation peer group of firms identified by management with which we compete for executive talent. For 2008, our compensation peer group consisted of Greenhill & Co., Inc.,
Jefferies Group, Inc., JMP Securities, Keefe, Bruyette & Woods, Inc., Knight Capital Group, Lazard LLC, Piper Jaffray & Co., and Thomas Weisel Partners
Group, LLC. Management, together with PricewaterhouseCoopers (PWC) the Compensation Committee's compensation consultant, gathered and provided information to the Compensation Committee relating
to the compensation of the executive officers of these peer firms, including annual base salary, annual cash bonus, equity awards and all other compensation. The Compensation Committee considered
these data when determining our 2008 compensation levels to ensure that our compensation levels are competitive relative to the compensation paid by our peer group.

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The other set of peer group data consisted of external market surveys provided by MGMC, Inc., a compensation advisory firm. These market surveys allowed the Compensation Committee
to benchmark each executive officer's total compensation against that of certain boutique investment banks and global investment banks. We use these external market surveys because we compete with
companies of various sizes for executive officers and other senior employees. For 2008, the boutique investment banks included the following firms: BNP Paribas, Dresdner, Jefferies Group, Inc.,
JMP Securities, Knight Securities, Lazard LLC, Piper Jaffray & Co. and Thomas Weisel Partners Group, LLC. The global investment banks included the following firms: Bank of
America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Lehman Brothers, Merrill Lynch, Morgan Stanley and UBS. Each executive officer's total compensation for each of 2007
and 2006, and his compensation recommendation by management to the Compensation Committee for 2008, were compared to: (i) the 2007 average, 25th, 50th and
75th percentile of total compensation of a similarly positioned executive officer at a boutique investment bank; and (ii) the 2007 average, 25th,
50th and 75th percentile of total compensation of an officer with similar functions (but not necessarily the same title) at a global investment bank. The
Compensation Committee reviews such composite market data to determine the market median compensation paid to similarly-situated executives. Market data are some of the many factors considered by the
Compensation Committee when setting compensation, and the amount paid to each executive officer may be more or less than the composite market median based on the roles and responsibilities of the
executive officer, experience level and other factors.



Although the Compensation Committee reviewed the peer group data discussed above to assist with their determinations of appropriate
compensation levels for our named executive officers in 2008, the Compensation Committee determined that, in light of developments in the financial markets in 2008, the historical data was not as
meaningful because it did not reflect the current market environment's impact on peer compensation. Therefore, the Compensation Committee's determinations regarding 2008 total compensation were
primarily focused on the Company's performance in 2008 and the named executive officers' respective contributions to the franchise during this tumultuous period.



In 2006, the Compensation Committee engaged PWC as a compensation consultant to provide peer group analyses, competitive assessments
and advice. At the request of the Compensation Committee, PWC reviewed all Compensation Committee presentation materials during 2008 and advised the Compensation Committee as to the competitiveness of
the base salary and bonus recommendations presented by our Chief Executive Officer, and the competitiveness of the ultimate compensation levels approved by the Board of Directors for each executive
officer (including the Chief Executive Officer) and certain other highly compensated employees.

Compensation Program and Payments

Our executive compensation consists of base salary, an annual bonus paid in the form of cash and deferred cash or equity awards and
benefits, such as life insurance and other personal benefits. In addition, our Chief Executive Officer is eligible to receive certain payments upon a termination or change in control.



When making compensation decisions, the Compensation Committee makes a determination as to the total compensation an executive officer
should receive for that fiscal year, and base salary is a component of that total compensation. The purpose of base salary is to provide a set amount of cash compensation for each executive officer
that is not variable in nature and is generally competitive with

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market
practices. Each year the Compensation Committee approves a cap on the aggregate firm-wide dollar amount of base salary increases based on a percentage of the prior year
firm-wide base salary level. Historically, we have sought to set the base salaries of our named executive officers such that a significant amount of their total compensation is derived
from their annual bonus. This was consistent with standard practice within the securities industry and we believe this allowed us to reward performance. Recently, some securities firms have increased
base pay to make it a more meaningful portion of total compensation. Similarly, on March 18, 2009 the United
Kingdom Financial Services Authority published a draft Code on remuneration practices that would call for increased base salaries. The Compensation Committee will continue to monitor this developing
trend.

On
occasion, we may adjust our executive officers' base salaries within the firm-wide base salary cap described above. We did not adjust salaries for our named executive
officers or other senior employees in 2008. Each of the named executive officers, other than Mr. Egert, received a base salary of $250,000. Mr. Egert received a base salary of $200,000.
Mr. Malcolm's and Mr. McCarthy's base salaries are set out in their employment agreements. We anticipate that fiscal 2009 base salaries for our other named executive officers will remain
the same as their fiscal 2008 base salaries. The Compensation Committee will continue to examine developing trends in base pay as the year progresses.



The majority of total compensation received by each executive officer is paid in the form of an annual bonus. This is consistent with
our view that a significant portion of compensation paid is to be based on the performance of the Company and of each executive officer. In prior years, our senior management developed, and the
Compensation Committee approved, an equity distribution grid that set forth the percentage of total compensation an employee would receive in the form of equity awards, in lieu of, not in addition to,
a cash payment. In 2008, senior management recommended the use of deferred cash in addition to restricted stock awards as an additional component of deferred compensation and developed a deferred
compensation formula, which sets forth a percentage of total compensation an employee will receive in the form of deferred compensation awards in lieu of an immediate cash payment. The deferred
component of the annual bonus is subject to vesting schedules as discussed below. The deferred compensation formula was discussed and ultimately approved by the Compensation Committee. While
conducting this evaluation, the Compensation Committee reviews the practices of our peer companies. For fiscal 2008, the deferred compensation formula was set such that any employee, regardless of
title, earning total compensation in excess of $250,000 would, with rare exception, receive a percentage of his or her compensation over $250,000 in the form of a deferred cash or equity award.
According to the deferred compensation formula approved by the Compensation Committee, the percentage of total compensation that must be paid in deferred cash or equity increases as total compensation
increases. For example, according to the fiscal 2008 deferred compensation formula, an employee earning in excess of $300,000 in total compensation would receive at least 2.5% of his or her total
compensation in the form of a deferred compensation award, while an employee earning over $1 million in total compensation would receive at least 30% of his or her total compensation in the
form of a deferred compensation award. The Compensation Committee will evaluate the deferred compensation formula every year and makes necessary changes to both remain competitive with our peer
companies and to continue aligning the interests of our executive officers' with the interests of our stockholders.

For
fiscal 2008, the Compensation Committee decided that all deferred cash compensation relating to fiscal 2008 bonuses was to be subject to vesting as follows: 33% on May 15,
2010, 33% on May 15, 2011
and 34% on May 15, 2011. Deferred cash awards may be paid in Cowen Group, Inc. stock, at the sole discretion of the Company.

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For
fiscal 2008, the Compensation Committee decided to extend the first vesting period for all equity compensation from one year to two years. Equity awards relating to fiscal 2008
bonuses was to be paid in the form of shares of restricted stock vesting as follows: 0% on May 15, 2010, 50% on May 15, 2011 and 50% on May 15, 2012. In determining the
distribution of deferred cash versus deferred equity awards, the Compensation Committee evaluated the following factors:



At
its January 15, 2009 meeting, the Compensation Committee determined its recommendations for fiscal 2008 bonuses to our named executive officers and certain other
highly-compensated employees. As previously noted, the Compensation Committee has elected to share its recommendations with the full Board and seek their formal approval of final compensation
decisions. As a result, on January 22, 2009, the Board of Directors reviewed and approved the Compensation Committee's recommendations. All non-deferred cash bonuses relating to fiscal 2008
were paid in early 2009. The deferred cash or equity award portion of the bonus were awarded in February 2009. To eliminate the impact that a significant price change in the market value of our common
stock may have on the number of shares of restricted stock that were to be delivered to an employee, the Compensation Committee approved valuing the restricted stock using the volume-weighted average
price for a five trading day period ending on a date in early January, which equaled $6.45 per share.



When determining the amount of annual bonus to be paid for fiscal 2008, the Compensation Committee reviewed and considered the
following information:



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On March 4, 2008, our Board of Directors unanimously elected David M. Malcolm President and Chief Executive Officer of the
Company, effective immediately. In connection with his appointment as Chief Executive Officer and President of the Company, Mr. Malcolm and the Company entered into an agreement containing the
terms and conditions of his employment, or the Malcolm Employment Agreement. The Malcolm Employment Agreement provides that Mr. Malcolm shall be entitled to an annual salary of $250,000 and
shall be eligible to receive an annual performance-based bonus as determined by the Board of Directors at the recommendation of the Compensation Committee. In addition, subject to certain vesting
provisions, Mr. Malcolm will receive the right to purchase 6.25% of the general partner of an affiliated alternative asset management partnership relating to Cowen Healthcare Royalty Partners,
or the CHRP Interest. The Malcolm Employment Agreement is described in greater detail under "Employment Agreements with Certain Named Executive Officers" beginning on page 18.



When setting fiscal 2008 total compensation for Mr. Malcolm, in addition to the terms of the Malcolm Employment Agreement, the
following factors significantly influenced the Compensation Committee:



Based
on the factors described above, the Compensation Committee awarded Mr. Malcolm total compensation for 2008 as set forth below in the "Total Compensation" column. Such amounts, after being
subject to the deferred compensation formula, were paid as follows:

Name

Base
Salary

Cash
Bonus

Restricted
Stock

Restricted
Cash Award

All Other
Compensation

Total
CompensationDavid M. Malcolm

$
250,000

$
437,500


$225,000

$
37,500



$
950,000(34,884 shares
)


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When setting fiscal 2008 total compensation for our named executive officers other than Messrs. Malcolm and Fennebresque, the
following factors significantly influenced the Compensation Committee:



The
Compensation Committee also took into consideration the Company's employment agreement with Mr. McCarthy. Under his employment agreement, Mr. McCarthy serves as an
at-will employee and is entitled to a base salary of $250,000 and a minimum annual bonus of $450,000 for each of 2007 and 2008.

In
February 2008, at the recommendation of Mr. Fennebresque, who was then our Chief Executive Officer, and the Compensation Committee, the Board of Directors approved a special
one-time cash award of $150,000 to each of Messrs. Conner and White, in connection with their efforts in assisting with the completion of certain strategic initiatives. These awards
did not impact the Compensation Committee's determinations regarding year-end compensation for Messrs. Conner and White.

Under
the SEC's rules, we are required to report in the Summary Compensation Table on page 16 the dollar amounts of the restricted stock for each named executive officer
recognized by the Company as compensation costs for financial reporting purposes (excluding forfeiture assumptions) in accordance with SFAS 123R for the fiscal year. As a result, no portion of
the bonuses paid in restricted stock to our named executive officers for their fiscal 2008 performance is included in the Summary Compensation
Table because the equity awards were granted in 2009. The table below sets forth the total compensation awarded to the named executive officers for their fiscal 2008 performance. These amounts include
the dollar value of the entire amount of the equity award and/or deferred cash award received by the named executive officer in February 2009 but does not include any amounts for the restricted stock
and options awarded to the named executive officers in connection with our initial public offering or as part of their 2006 or 2007 compensation. We believe this information is helpful to
understanding how our compensation program rewarded our executive officers for their performance during fiscal 2008.

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Based on the information and factors described above, the Compensation Committee awarded each of the following named executive officers total compensation for fiscal 2008 as set forth
below in the "Total Compensation" column. Such amounts, after being subject to the deferred compensation formula, were paid as follows:

Name

Base
Salary

Cash
Bonus

Restricted
Stock

Restricted
Cash Award

Total
CompensationThomas K. Conner

$
250,000

$
212,500




$
37,500

$
500,000Christopher A. White

$
250,000

$
335,000


$52,500

$
37,500

$
675,000(8,140 shares
)J. Kevin McCarthy

$
250,000

$
352,500


$60,000

$
37,500

$
700,000(9,303 shares
)Mark A. Egert

$
200,000

$
203,000




$
27,000

$
430,000




On March 4, 2008, Mr. Fennebresque resigned as Chief Executive Officer and President of the Company.
Mr. Fennebresque resigned as Chairman of the Board of Directors effective July 15, 2008. Mr. Fennebresque currently is employed as a Senior Advisor to the Company.

In
connection with Mr. Fennebresque's resignation, he and the Company entered into an agreement containing the terms and conditions of his resignation, or the Resignation
Agreement. The Resignation Agreement provided that Mr. Fennebresque forfeited in its entirety to the Company the equity award of 975,000 shares that he received in connection with the initial
public offering of the Company, or the IPO Award. Mr. Fennebresque continues to vest in the equity awards he received as part of his 2006 and 2007 annual compensation.

On
March 4, 2008, Mr. Fennebresque and the Company also entered into an agreement containing the terms and conditions of his employment as a Senior Advisor to the Company.
This agreement provides, among other things, that Mr. Fennebresque shall be employed as a Senior Advisor to the Company at an annual salary of $250,000, with a commitment to the Company not to
exceed 20% of Mr. Fennebresque's time. Mr. Fennebresque is entitled to an office paid for by the Company, subject to an initial per annum cap of $75,000 and a terminal cap of $175,000.
Mr. Fennebresque had continued use of the car and driver provided to him by the Company through December 31, 2008. Mr. Fennebresque's role as Senior Advisor may continue until the
earlier of his resignation or the end of the calendar year of his 70th birthday, and may only be terminated by the Company for cause.

Based
on the agreements described above, Mr. Fennebresque received total compensation for fiscal 2008 as set forth below. Mr. Fennebresque's compensation was not subject to
the deferred compensation formula because his total cash compensation in 2008 did not exceed $250,000.

Name

Base
Salary

Cash
Bonus

Restricted
Stock

Restricted
Cash Award

All Other
Compensation(1)

Total
CompensationKim S. Fennebresque

$
250,000










$
91,499

$
341,499


---

13

---



Compensation Actions Prior to and in Connection with our Initial Public Offering

Compensation reported in the Summary Compensation Table and elsewhere in this proxy statement reflects several actions taken before or
in connection with our separation from Société Générale, or SG, and our related initial public offering in July 2006. These actions were
negotiated prior to the initial public offering and the formation of the Compensation Committee. We describe compensation actions before and in connection with our initial public offering since they
significantly affect the amounts reported in this item. The most significant actions are summarized briefly in this section to provide context.

Consistent
with our philosophies regarding aligning executives' interests with stockholders' interests and retention of senior employees and in connection with our initial public
offering and separation from SG, we granted certain of our senior employees and executive officers equity awards. We and SG agreed that a combination of restricted stock and stock options was the
optimal way to align the long-term and short-term goals of the Company, SG and our other stockholders. SG agreed to fund the restricted stock portion of the equity grant. The
amount of restricted stock that SG contributed was determined through negotiations between our executive officers and SG. These negotiations preceded our initial public offering. As a result, the
Compensation Committee was not involved in these negotiations.

In
connection with our initial public offering, our former Chief Executive Officer received an award of 975,000 shares of restricted stock. Mr. Fennebresque forfeited this share
award, in its entirety, upon his voluntary resignation as Chief Executive Officer and President on March 4, 2008. Other executive officers also received awards of restricted stock as well as
stock options in connection with our initial public offering, as did Mr. Malcolm who was employed by the Company but did not serve as an executive officer at that time. The amount of
Mr. Fennebresque's restricted stock award was determined by SG. For our other executive officers and Mr. Malcolm, the amounts of these awards were determined by our former Chief
Executive Officer and SG. With the exception of the shares granted to Mr. Fennebresque, the restricted stock vests as follows: 25% on July 12, 2009 and July 12, 2010, respectively
and the remaining 50% of the shares on July 12, 2011. The stock options have an exercise price of $16.00 per share, which was the initial offering price to the public of our common stock. The
options vest in 25% annual increments commencing on July 12, 2008.

The
amount of equity awards related to the initial public offering that we recognized as compensation expense for 2008 financial reporting purposes under SFAS 123R are included in
the Summary Compensation Table on page 16, and will continue to be reported in that table in future years as the compensation expense is recognized over the vesting period.

As
noted above, we have excluded these initial public offering related equity awards from the computation of our ratio of compensation and benefits expense to revenues.

Termination and Change of Control Arrangements

As discussed in more detail below in "Provisions of Equity Award Agreements with Named Executive Officers", the award agreements with
our named executive officers relating to equity grants (both restricted stock and options) in connection with our initial public offering and for 2006 performance to our named executive officers,
other than our former Chief Executive Officer, mandate that upon a termination of employment, other than as a result of death, disability or a qualified retirement, all unvested equity awards, and on
occasion, all vested equity awards, will be forfeited. The terms of the award agreements for equity grants or deferred cash awards, as applicable, in connection with 2007 or 2008 performance mandate
that upon a termination of employment, other than as a result of death, disability or a qualified retirement or without Cause, as defined in the relevant award agreement, all unvested awards will be
forfeited. Upon a change-in-control, all equity awards will fully vest and all restrictions will lapse and all deferred cash awards will continue to vest in accordance with

14

---



the
vesting schedule. In addition, each named executive officer must be employed by us on the payment date, with respect to cash, and on the grant date, with respect to equity awards, to receive those
components of his annual bonus.

Non-Qualified Deferred Compensation Plans

Since our initial public offering and separation from SG, Cowen Group, Inc. has not sponsored any non-qualified
deferred compensation plans in which any of our named executives are participants. Prior to our initial public offering, certain of our named executive officers participated in deferred compensation
plans sponsored by SG, the majority of which were terminated in connection with our initial public offering and separation from SG. SG is responsible for all future payments under any remaining
deferred compensation plans.

Tax Deductibility under Section 162(m) of the Internal Revenue Code

The Internal Revenue Service, pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows a
tax deduction for compensation in excess of $1.0 million paid to our Chief Executive Officer and to each other officer (other than the Chief Executive Officer and Chief Financial Officer) whose
compensation is required to be reported to our
stockholders pursuant to the Exchange Act by reason of being among our three most highly paid executive officers. In 2007, we sought and obtained shareholder approval for the Company's 2007 Equity and
Incentive Plan. The plan is designed to qualify compensation awarded under our annual incentive program as "performance based" to ensure that the tax deduction is available to the Company.

15

---



COMPENSATION COMMITTEE REPORT

The Compensation and Benefits Committee has reviewed and discussed the Compensation Discussion and Analysis with management and has
recommended to the Board of Directors the inclusion of the Compensation Discussion and Analysis in this Annual Report on Form 10-K/A.

Compensation and Benefits Committee of the Board of Directors of Cowen Group, Inc.Charles W.B. Wardell, III,ChairpersonPhilip
B. Pool, Jr.  John E. Toffolon, Jr.

Summary Compensation Table

The following table sets forth compensation information for our current Chief Executive Officer for the year ended December 31,
2008 (who became an executive officer on March 4, 2008); compensation information for the years ended December 31, 2006, December 31, 2007 and December 31, 2008 for our
Chief Financial Officer and our three other most highly-compensated executive officers, all of whom were serving as executive officers at December 31, 2008; and
compensation information for our former Chief Executive Officer for the years ended December 31, 2006, December 31, 2007 and December 31, 2008 (who resigned as the Company's Chief
Executive Officer effective March 4, 2008). No portion of the bonuses paid in restricted stock to our named executive officers for their fiscal 2008 performance is included in the Summary
Compensation Table because such equity awards were made in 2009. The entries in the stock awards column reflect the amount of stock-based compensation recognized in each period relating to restricted
stock awarded in respect of prior years performance and in connection with the initial public offering.

Name & Principal Position

Year

Salary ($)

Bonus ($)(1)

Stock
Awards ($)(2)

Option
Awards ($)(3)

All Other
Compensation ($)

Total ($)David M. Malcolm


2008


250,000


437,500


1,234,108


233,295





2,154,903Chief Executive OfficerThomas K. Conner


2008


250,000


212,500


94,636


20,651


150,000
(4)

727,787Chief Financial Officer


2007


250,000


247,500


84,393


24,470





606,3632006


200,000


435,000


25,179


12,616





672,795Christopher A. White


2008


250,000


335,000


169,834


30,908


150,000
(4)

935,742Chief of Staff and Chief


2007


250,000


387,500


148,506


36,626





822,632Administrative Officer


2006


200,000


662,500


37,793


18,882





919,175J. Kevin McCarthy


2008


250,000


352,500


64,203








666,703General Counsel


2007


250,000


352,500


35,537








638,037Mark A. Egert


2008


200,000


203,000


49,623


8,246





460,869Chief Compliance Officer


2007


200,000


241,250


44,162


9,771





495,1832006


200,000


355,000


10,077


5,038





570,115Kim S. Fennebresque


2008


250,000





(5,169,924
)(5)




91,499
(6)

(4,828,425
)Former Chairman and Chief


2007


250,000


537,500


4,311,854
(5)




70,294


5,169,648Executive Officer


2006


250,000


2,347,500


1,733,333
(5)




65,000


4,395,833


---

16

---





2008 Grants of Plan-Based Awards

The following table provides information regarding grants of plan-based awards made to the named executive officers during
fiscal 2008.

Grant Date

Corporate
Action
Date

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)(1)

All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)(2)

Exercise
Price of
Option
Awards ($)

Grant Date
Fair Value of
Stock and
Option
Awards ($)(3)David M. Malcolm


1/25/2008


12/20/2007


23,326








224,163Thomas K. Conner


1/25/2008


12/20/2007


5,763








55,382Christopher A. White


1/25/2008


12/20/2007


12,350








118,684J. Kevin McCarthy


1/25/2008


12/20/2007


10,703








102,856Mark E. Egert


1/25/2008


12/20/2007


3,705








35,605Kim S. Fennebresque


1/25/2008


12/20/2007


23,326








224,163


---

17

---





During the fiscal year ended December 31, 2008, the Company had employment agreements with two of its named executive officers:
Mr. Malcolm and Mr. McCarthy. Pursuant to his employment agreement, Mr. McCarthy serves as an at-will employee of Cowen Group, Inc. and was entitled to a base
salary of $250,000 and a minimum annual bonus of $450,000 for 2008. As discussed above under "Compensation Discussion and AnalysisMr. Fennebresque's Resignation Agreement and
Employment Agreement," the Company also entered into certain agreements with Mr. Fennebresque in connection with his resignation in March 2008.



In connection with his appointment as Chief Executive Officer and President of the Company, Mr. Malcolm and the Company entered
into an agreement containing the terms and conditions of his employment, or the Malcolm Employment Agreement.

The
Malcolm Employment Agreement provides that Mr. Malcolm shall be employed as the Chief Executive Officer and President of the Company from March 4, 2008 through
December 31, 2010. Thereafter, Mr. Malcolm's term of employment shall be automatically renewed on an annual basis on January 1 of each successive year, subject to mutual
termination provisions. Mr. Malcolm shall be entitled to an annual salary of $250,000 and shall be eligible to receive an annual performance-based bonus as determined by the Board of Directors
at the recommendation of the Compensation Committee. In addition, subject to certain vesting provisions, Mr. Malcolm will receive the right to purchase 6.25% of the general partner of an
affiliated alternative asset management partnership relating to Cowen Healthcare Royalty Partners, or the CHRP Interest.

Mr. Malcolm
may retire at any time following payment by the Company of annual bonuses for the 2010 calendar year or thereafter. Upon his retirement, Mr. Malcolm shall be
employed by the Company as a Senior Advisor for a three-year term at an annual salary of $750,000. In addition, the Company will provide Mr. Malcolm, his spouse and dependents with
health and medical benefits during this three-year period (to the extent permitted by the terms of the Company's benefit plans), or the Post Retirement Benefits.



Pursuant to the award agreements with our named executive officers, restricted stock awarded in connection with our initial public
offering will vest with respect to 25% of the shares on each of July 12, 2009 and July 12, 2010, respectively, and the remaining 50% on July 12, 2011, provided that the terms and
conditions of the applicable award agreements are satisfied. Pursuant to the terms of the applicable award agreements with each of our named executive officers, restricted stock awarded in January
2007 for 2006 performance vests with respect to 25% of the shares on January 16, 2007 and January 16, 2008, respectively and the remaining 50% on January 16, 2009 provided that
the terms and conditions of the applicable award agreements are satisfied. In each case, award recipients retain the right to vote restricted shares they hold and to receive dividends, if any, paid at
the same rate paid to our other stockholders. Also, pursuant to their award agreements, options awarded to our named executive officers in connection with our initial public offering expire on the
seventh anniversary of the initial public offering and vest in 25% annual increments commencing on July 12, 2008, the second anniversary of the grant date.

In
addition, pursuant to the award agreements with our named executive officers related to equity awards in connection with our initial public offering and equity awards for 2006
performance that were granted in January 2007, if an award recipient is terminated for cause (as defined below), both vested and unvested equity awards are subject to forfeiture. If an award
recipient's employment is terminated other than for cause, except for a qualified retirement (as defined below), the award recipient's

18

---



unvested
equity awards are subject to forfeiture. In addition, a retired employee's unvested equity awards and equity awards that vested during retirement are subject to forfeiture if the employee
violates any of the covenants in his or her award agreement.

Pursuant
to the award agreements with our named executive officers, restricted stock awarded on January 25, 2008 for 2007 performance vests with respect to 25% of the shares on
May 15, 2009 and May 15, 2010, respectively and the remaining 50% on May 15, 2011 provided that the terms and conditions of the applicable award agreements are satisfied. In each
case, award recipients retain the right to vote restricted shares they hold and to receive dividends, if any, paid at the same rate paid to our other stockholders. If an award recipient is terminated
for cause (as defined below), both vested and unvested equity awards are subject to forfeiture. If an award recipient's employment is terminated other than for cause, except as a result of death,
disability or a qualified retirement (as defined below), the award recipient's unvested equity awards are subject to forfeiture. In addition, a retired employee's unvested equity awards, and equity
awards that vested during retirement, are subject to forfeiture if the employee violates any of the covenants in his or her award agreement.



Pursuant to the award agreements with our named executive officers related to restricted stock and deferred cash awarded in February
2009 for 2008 performance, if an award recipient is terminated for cause (as defined below), both vested and unvested equity and deferred cash awards are subject to forfeiture. If an award recipient's
employment is terminated other than for cause, except as a result of death, disability or a qualified retirement (as defined below), the award recipient's unvested equity awards are subject to
forfeiture. In addition, a retired employee's unvested equity and deferred cash awards, and equity and deferred cash awards that vested during retirement, are subject to forfeiture if the employee
violates any of the covenants in his or her award agreement.

For
the purposes of the award agreements with the named executive officers relating to the restricted stock, options and deferred cash awards:



19

---





Outstanding Equity Awards at 2008 Fiscal Year End

The following table contains certain information regarding equity awards held by the named executive officers as of December 31,
2008.

Option AwardsStock AwardsNumber of
Securities
Underlying
Unexercised
Options
Exercisable (#)

Number of
Securities
Underlying
Unexercised
Options
Unexercisable (#)Option
Exercise
Price ($)

Option
Expiration
Date

Number
of Shares
that have
Not
Vested (#)

Market
Value of
Shares that
have Not
Vested ($)(1)David M. MalcolmIPO Restricted Stock(2)














102,294


650,590IPO Options(3)


25,847


77,543


16.00


7/12/2013





January 2007 Restricted Stock Award(4)














21,398


136,091January 2008 Restricted Stock Award(5)














23,326


148,353Thomas K. ConnerIPO Restricted Stock(2)














12,803


81,427IPO Options(3)


3,219


9,660


16.00


7/12/2013





January 2007 Restricted Stock Award(4)














1,661


10,564January 2008 Restricted Stock Award(5)














5,763


36,653Christopher A. WhiteIPO Restricted Stock(2)














19,217


122,220IPO Options(3)


4,819


14,457


16.00


7/12/2013





January 2007 Restricted Stock Award(4)














3,514


22,349January 2008 Restricted Stock Award(5)














12,350


78,546J. Kevin McCarthyJanuary 2007 Restricted Stock Award(4)














1,661


10,564January 2008 Restricted Stock Award(5)














10,703


68,071Mark E. EgertIPO Restricted Stock(2)














5,124


32,589IPO Options(3)


1,285


3,858


16.00


7/12/2013





January 2007 Restricted Stock Award(4)














1,150


7,314January 2008 Restricted Stock Award(5)














3,705


23,564Kim S. FennebresqueJanuary 2007 Restricted Stock Award(4)














34,173


217,340January 2008 Restricted Stock Award(5)














23,326


148,353


---

20

---





2008 Option Exercises and Stock Vested

Stock AwardsNumber of Shares Acquired on Vesting (#)

Value Realized on Vesting ($)(1)David M. Malcolm


10,699


98,966Thomas K. Conner


830


7,678Christopher A. White


1,756


16,243J. Kevin McCarthy


830


7,678Mark E. Egert


575


5,319Kim S. Fennebresque


17,086


158,046






Potential Payments Upon Termination or Change-In-Control

The award agreements with our named executive officers relating to the equity grants (both restricted stock and options) made in
connection with our initial public offering and the award agreements with our named executive officers relating to equity awards for 2006 performance granted in January 2007 and equity awards for 2007
performance granted in January 2008 mandate the forfeiture of all unvested equity grants upon the termination of employment, other than as a result of death, disability or retirement. In addition, if
a named executive officer is terminated for cause (as defined above in "Provisions of Equity Award Agreements with Named Executive Officers"), all equity awards that are currently vested and held by
such executive officer will also be forfeited, or if no longer held by such executive officer, the executive officer must pay the Company an amount equal to the fair market value of such shares on the
date of disposition by the executive officer. If the executive officer's employment is terminated as a result of death or disability, all unvested equity awards immediately vest. In the event that an
executive officer retires, then all equity awards shall continue to vest according to their vesting schedule, provided, however, that any unvested equity awards
and any equity awards that vested after the date of retirement will be immediately forfeited if, prior to the one year anniversary of the full vesting of an equity award, the executive violates any
provision of the award agreement or directly or indirectly becomes involved with a competitor of the Company (other than through a less than 1% ownership of the stock of such competitor). The
Compensation Committee, in its sole discretion, may waive, in whole or in part, the forfeiture provisions and any covenants in an award agreement. In addition, an executive officer must be employed by
us on the payment date, with respect to cash, and on the grant date, with respect to equity awards, to receive their annual bonus.

The
2006 Equity and Incentive Plan, under which all equity awards were granted to our named executive officers as of December 31, 2008, mandates that upon a change in control (as
defined below), all unvested equity awards become fully vested and exercisable and all restrictions, forfeiture conditions or deferral periods immediately lapse.

21

---



The
following table sets forth the fair market value, as of December 31, 2008, of all equity awards to our named executive officers that would have vested in the event of a
change-in-control on that date.

Fair Value of Restricted Stock ($)(1)

Fair Value of Options ($)(2)

Aggregate Fair Value of Restricted Stock and Options ($)David M. Malcolm


935,034





935,034Thomas K. Conner


128,644





128,644Christopher A. White


223,115





223,115J. Kevin McCarthy


78,635





78,635Mark E. Egert


63,466





63,466Kim S. Fennebresque(3)


365,694





365,694


---



The Malcolm Employment Agreement provides for payments in connection with Mr. Malcolm's termination under certain circumstances.
Pursuant to the Malcolm Employment Agreement, in the event that Mr. Malcolm's employment is terminated by the Company without cause or by him with good reason (as defined below), he shall be
entitled to receive a lump sum cash payment of $3,000,000, as well as a lump sum cash payment equal to the aggregate value of the Post-Retirement Benefits.

Following
a change in control of the Company (as defined below), in the event Mr. Malcolm's employment is terminated for any reason other than his death or disability or by the
Company for cause, he shall be entitled to receive a lump sum cash payment of $3,000,000, as well as a lump sum cash payment equal to the value of the Post Retirement Benefits. In the event that
Mr. Malcolm's employment is terminated by the Company without cause or by him with good reason after a change in control of the Company, he shall be entitled to receive a lump sum cash payment
of $5,000,000 as well as a lump sum cash payment equal to the aggregate value of the Post-Retirement Benefits. In addition, in the event that a termination by the Company without cause or
by him for good reason occurs prior to December 31, 2009, the CHRP Interest shall immediately vest.

For
purposes of Mr. Malcolm's agreement:



22

---





COMPENSATION PROGRAM FOR NON-EMPLOYEE DIRECTORS FOR 2008

Other than Mr. Toffolon, directors who are not Cowen employees received compensation in 2008 of $75,000, consisting of $50,000
in cash and $25,000 in restricted stock units. Prior to Mr. Toffolon's election as Chairman of the Board of Directors, he received total compensation of $100,000 per annum,
one-third of which was paid in restricted stock units, as our Lead Director. In August 2008, our Board of Directors approved a compensation increase for Mr. Toffolon, from $100,000
to $150,000, in connection with his election as Chairman of the Board of Directors. Mr. Toffolon's compensation increase was effective as of that date. In 2009, Mr. Toffolon's
compensation will be paid two-thirds in cash and one-third in restricted stock units. No separate meeting fees are paid. The restricted stock units are vested and not subject
to forfeiture; however, except in the event of death, the underlying shares of Cowen Group, Inc. common stock will not be delivered to the holder for at least one year from the date of grant.
These equity awards are intended to further align the interests of our directors with those of our stockholders.

The
following table contains compensation information for our non-employee directors for the year ended December 31, 2008.

Name

Fees Earned or Paid in Cash ($)

Stock Awards ($)(1)

All Other Compensation
($)(2)

Total ($)Jeffrey Kurzweil


50,000


25,008
(3)




75,008Philip B. Pool, Jr.


50,000


25,008
(3)




75,008L. Thomas Richards, M.D.


50,000


25,008
(3)

12,275


87,283John E. Toffolon, Jr.


86,804


33,341
(4)




120,145Charles W.B. Wardell, III


50,000


25,008
(3)




75,008


---

23

---



Compensation Committee Interlocks and Insider Participation

The Compensation Committee is comprised entirely of independent, non-employee directors, none of whom has ever been an
officer or employee of the Company and none of whom had any related person transaction involving the Company. During 2008, none of our executive officers (1) served as a member of the board of
directors or compensation committee of any other entity that had one or more of its executive officers serving as a member of our Compensation Committee or (2) served as a member of the
compensation committee of any other entity that had one or more of its executive officers serving as a member of our Board.

24

---





Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Beneficial Ownership of Directors, Nominees and Executive Officers

The following table shows how many shares of our common stock were beneficially owned as of April 15, 2009, by each of our
directors and named executive officers, and by all of our directors and executive officers as a group. Unless otherwise noted, the stockholders listed in the table have sole voting and investment
power with respect to the shares owned by them.

Name of Beneficial Owner

Amount and
Nature of
Beneficial
Ownership

Percent of
ClassDavid M. Malcolm


261,300


1.7
%Thomas K. Conner


21,888


*Christopher A. White


60,178
(1)

*J. Kevin McCarthy


26,328


*Mark A. Egert


11,626


*Kim S. Fennebresque


113,044


*Jeffrey Kurzweil


7,309
(2)

*Philip B. Pool, Jr.


9,309


*L. Thomas Richards, M.D.


9,309


*John E. Toffolon, Jr.


57,868
(3)

*Charles W.B. Wardell, III


8,309


*All current directors and executive officers as a group (11 persons)


473,424


3.1
%


---

25

---



Beneficial Owners of More than Five Percent of Our Common Stock

Based on filings made under Section 13(d) and Section 13(g) of the Securities Exchange Act of 1934, as of
April 15, 2009, the persons known by us to be beneficial owners of more than 5% of our common stock were as follows:

Name and Address of Beneficial Owner

Amount and
Nature of
Beneficial
Ownership

Percent of
ClassBank of America Corporation


1,619,752
(1)

10.70
%100 North Tryon StreetFloor 25Bank of America Corporate CenterCharlotte, NC 28255SG Americas, Inc.


1,382,608
(2)

9.14
%1221 Avenue of the AmericasNew York, NY 10020


---

Securities Authorized for Issuance Under Equity Compensation Plans

The following table summarizes, as of December 31, 2008, the number of shares of our common stock to be issued upon exercise of
outstanding options granted under our 2007 and 2006 Equity and

26

---



Incentive
Plans, the weighted-average exercise price of such options, and the number of shares remaining available for future issuance under the plans for all awards as of December 31, 2008.

Plan Category

Number of
Securities to
be Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights

Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights

Number of
Securities
Remaining
Available
for Future
Issuance Under
the Equity
Compensation
Plans (Excluding
Shares in First
Column)Equity compensation plans approved by security holders


911,455

$
15.08


2,085,477
(1)Equity compensation plans not approved by security holders


None


N/A


None


---

27

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Item 13.    Certain Relationships and Related Transactions and Director Independence

Director Independence

Under applicable Nasdaq Stock Market rules, a director will only qualify as an "independent director" if, in the opinion of our Board,
that person does not have a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our
Board has determined that none of Messrs. Kurzweil, Pool, Toffolon, Wardell or Dr. Richards has a relationship that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director and that each of these directors is an "independent director" as defined under Rule 5605(a)(2) of the Nasdaq Stock
Market, Inc. Marketplace Rules. In addition, the Board has determined that all of the members of each of the Board's three standing CommitteesAudit, Compensation and Nominating and
Corporate Governanceare independent as defined under the rules of the Nasdaq Stock Market and, in the case of all members of the Audit Committee, the independence requirements
contemplated by Rule 10A-3 under the Exchange Act.

Related Transactions Involving Our Executive Officers

In connection with our affiliated merchant banking and alternative investment businesses, the Company has in place contractual
arrangements and investment interests pursuant to which the Company may receive either investment returns and/or performance fee income. In addition, as set forth below, certain named executive
officers of the Company are investors in certain of the funds associated with these affiliated businesses.



In connection with Mr. Malcolm's election as our President and Chief Executive Officer, he received the right to purchase 6.25%
of the general partner of the first fund managed by Cowen Healthcare Royalty Partners, an affiliated alternative asset manager. Mr. Malcolm purchased this interest, or the CHRP Interest, in
March 2008. The CHRP Interest is subject to certain vesting provisions as described in the Malcolm Employment Agreement.

In
addition, certain of our senior employees, including our named executive officers, were offered the opportunity to invest in Cowen Healthcare Royalty Partners, L.P. as limited
partners. Messrs. Conner, White and McCarthy have invested in Cowen Healthcare Royalty Partners, L.P.



In 2006, Mr. Malcolm purchased a 12.9% interest in the general partner of a private equity fund that is managed by Cowen Capital
Partners, LLC ("CCP"). CCP is a wholly-owned subsidiary of the Company engaged in merchant banking activities. In its role as manager of the fund, CCP is entitled to receive management fees.
Mr. Malcolm's interest requires him to make investments in the fund and entitles him to distributions and performance fees from the fund, if any. The Company has no interest in the general
partner of the fund.

Transactions with Société Générale

Prior to our initial public offering, we were an indirect wholly-owned subsidiary of Société
Générale, or SG. As an indirect wholly-owned subsidiary, we had various service agreements in place between us and SG and certain of SG's affiliates, which set forth many
of the roles and responsibilities with regard to the services that were provided by SG and its affiliates to us and, in certain instances, by us to SG. In connection with our initial public offering
and separation from SG in July 2006, many of the existing agreements terminated and we simultaneously entered into numerous new agreements with SG to facilitate our existence as a standalone public
company. Our agreements with SG that were

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entered
into at the time of our initial public offering have been filed as exhibits to our registration statement for the initial public offering and/or our periodic reports. Many of these agreements
remained in effect, either in part or in their entirety, during 2008, resulting in related person transactions between us and SG, as defined in the SEC's rules. A subsidiary of SG continues to hold
more than 5% of our outstanding common stock. A more detailed description of these transactions appears below.



In connection with our initial public offering, we entered into an Indemnification Agreement with SG under which (1) SG will
indemnify, and will defend and hold harmless the Company and each of the Company's subsidiaries from and against certain liabilities assumed or retained by SG, and (2) SG will indemnify the
Company for known, pending and threatened litigation (including the costs of such litigation) and certain known regulatory matters, in each case, that existed prior to the date of the initial public
offering to the extent the cost of such litigation results in payments in excess of the amount placed in escrow to fund such matters. SG, however, will not indemnify us, and we will instead indemnify
SG, for most litigation, arbitration and regulatory matters that may occur in the future but were unknown at the time of our initial public offering and certain known regulatory matters.

On
July 12, 2006, the Company entered into an Escrow Agreement with SG and its affiliate and a third-party escrow agent and deposited with the escrow agent $79.3 million
for the payment of liabilities arising out of the matters for which SG has agreed to indemnify us. Subsequent to making this deposit, certain matters covered by the Escrow Agreement have been settled
and excess reserves related to these settled matters were returned to an affiliate of SG. The escrow agent will, when and as directed by SG's affiliate, distribute funds from the escrow account to
satisfy specified contingent liabilities for which SG has assumed responsibility should such liabilities become due. Any amounts remaining in the
escrow account after final conclusion of the related litigation will be paid to an affiliate of SG. SG's affiliate is also entitled to any interest earned on such deposits held in escrow. In 2008,
SG's affiliate earned $300,000 in interest from the escrow account and $8.1 million was distributed from the escrow account to unrelated third parties in connection with litigation settlement
payments. The escrow account was funded with $79.3 million as of the date of separation.



In connection with our initial public offering and separation from SG, we entered into a sublease agreement with SG related to our
headquarters at 1221 Avenue of the Americas, New York, New York. Pursuant to the sublease agreement which expires in 2013, we make monthly lease payments to SG comprised of rent and other
occupancy-related expenses. During 2008, we made $6.8 million in aggregate payments to SG related to the sublease of our New York offices.

We
also entered into a Transition Services Agreement which provides that, among other things, we will repay SG for the cost of improvements to our sub-leased facilities over
the period from January 2006 through September 2013. In addition, the Transition Services Agreement provided that SG would provide us with facilities management services through December 31,
2007, subject to renewal at that time. The Transition Services Agreement was renewed in February 2008. In 2008, we paid SG $2.4 million in aggregate fees related to facilities management and
improvements to our sub-leased facilities.

In
addition, we have an irrevocable letter of credit in the amount of $5.0 million to support SG's guarantee of our obligations related to lease payments for our Boston offices.

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The Separation Agreement provided that, at the closing of our initial public offering, we were to have an initial stockholders' equity
of $207.0 million after giving effect to the transactions contemplated in the Separation Agreement and the other agreements. The Separation Agreement required that following our initial public
offering there would be a true-up
calculation of our stockholders' equity immediately following our initial public offering and the corresponding amount that should have been distributed to SG on the date of our initial public
offering. We accrued $2.1 million as a capital distribution related to this final review, and on July 1, 2008, we paid $2.1 million to SG.



In 2004, we entered into a three-year service level agreement with an affiliate of SG regarding the outsourcing of certain
presentation center functions to Bangalore, India. This agreement was renewed for an additional three-year period. Under the agreement, the affiliate of SG provides us with certain
presentations center services including, among other things, pitchbook presentations, the creation of logos, graphics artwork and organizational charts. In 2008, we paid the SG affiliate
$1.4 million in aggregate fees under this agreement. The service level agreement has been renewed for an additional three years.



In 2004, we entered into a service level agreement to provide management services to SG related to its U.S. merchant banking assets. In
connection with our separation and initial public offering, this service level agreement terminated and we entered into a Transition Services Agreement with SG. Under this agreement, we earned fees
from SG for managing certain U.S. merchant banking investments. In 2006, SG sold a portion of the merchant banking portfolio currently managed by us to an unaffiliated third-party. We continue to
manage these assets for the purchasers and continue to receive a fee for doing so. In addition, we continue to manage certain U.S. merchant banking assets for SG. During 2008, SG paid us $300,000 in
aggregate fees related to managing the U.S. merchant banking assets not sold in 2006.



During 2007, the Company concluded that a receivable in the amount of $1.9 million owed to the Company by SG is in dispute. The
Company has been informed that SG currently disputes its obligation to pay the receivable. The Company believes, based on current facts and circumstances and in consultation with counsel, that it
holds a valid legal claim to the receivable. Based upon the validity of its legal claim, the Company believes the receivable is realizable, therefore, no reserves have been established. The Company
has taken steps to pursue its legal claim.

Review and Approval of Transactions with Related Persons

To minimize actual and perceived conflicts of interests, our Board of Directors has adopted a written policy governing transactions in
which the Company is a participant, the aggregate amount involved is reasonably expected to exceed $120,000, and any of the following persons has or may have a direct or indirect material interest in
the transaction: (a) our executive officers, directors (including nominees) and certain other highly compensated employees, (b) stockholders who own more than 5% of our common stock, and
(c) any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law or person (other than a tenant or employee) sharing the same household of any
person described in (a) or (b) above. These transactions are considered "related person transactions."

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Unless
exempted from the policy as described below, related person transactions must be reported to our General Counsel or Chief Compliance Officer who will then submit the related
person transaction for review by our Audit Committee. The Audit Committee will review all relevant information available to it and will approve or ratify only those related person transactions that it
determines are not inconsistent with the best interests of the Company. If our General Counsel or Chief Compliance Officer determines that advance approval of a related person transaction is not
practicable under the circumstances, the Audit Committee will review, and, in its discretion, may ratify the related person transaction at its next meeting, or at the next meeting following the date
that the related person transaction comes to the attention of our General Counsel or Chief Compliance Officer. However, the General Counsel or Chief Compliance Officer may present a related person
transaction that arises between Audit Committee meetings to the Chair of the Audit Committee, who will review and may approve the related person transaction, subject to the Audit Committee's
ratification at its next meeting.

Any
related person transaction previously approved by the Audit Committee or otherwise already existing that is ongoing will be reviewed annually by the Audit Committee to ensure that
such transaction has been conducted in accordance with the previous approval granted by the Audit Committee, if any, and that all required disclosures regarding the related person transaction are
made.

In
addition to the transactions that are excluded by the instructions to the SEC's related person transaction disclosure rule, the Board has determined that the following transactions do
not create a
material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:



The
policy provides that transactions involving compensation of executive officers shall be reviewed and approved by the Compensation and Benefits Committee in the manner specified in
its charter.

The
transactions with our executive officers described above under "Cowen Healthcare Royalty Partners" were reviewed and approved by our Audit Committee prior to their
consummation in accordance with the policy described above. The transaction with Mr. Malcolm described above under "Cowen Capital Partners LLC" and the transactions with SG
described in this section were entered into before our initial public offering and our adoption of the policy. As ongoing transactions, they have been reviewed by our Audit Committee in accordance
with the policy.

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Item 14.    Principal Accounting Fees and Services

Independent Registered Public Accounting Firm Fees and Other Matters

The following table presents the aggregate fees billed for services rendered by Ernst & Young, LLP, our independent
registered public accounting firm, for the fiscal years ended December 31, 2008 and 2007.

2008

2007Audit Fees(1)

$
1,123,564

$
1,317,908Audit-Related Fees(2)


23,300


123,689Tax Fees





All Other Fees





6,248Total

$
1,146,864

$
1,447,845






Auditor Services Pre-Approval Policy

The Audit Committee has adopted an Audit Committee Policy Regarding Outside Auditor Services which includes a pre-approval
policy that applies to services performed for the Company by our independent registered public accounting firm. In accordance with this policy, we may not engage our independent registered public
accounting firm to render any audit or non-audit service unless the service was approved in advance by the Audit Committee or the engagement is entered into pursuant to the
pre-approval policies and procedures described below. However, no pre-approval is required with respect to services (other than audit, review or attest services) if
(i) the aggregate amount of all such services is no more than 5% of the total amount paid by us to the independent registered public accounting firm during the fiscal year in which the services
are provided, (ii) such services were not recognized at the time of engagement to be non-audit services and (iii) such services are promptly brought to the
attention of the Audit Committee and approved by either the Audit Committee or the Chairperson of the Audit Committee prior to completion of the audit. During fiscal 2008, no fees were approved by the
Audit Committee pursuant to this exemption.

The
pre-approval policy delegates to the Chairperson of the Audit Committee the authority to pre-approve any audit or non-audit services, provided
that any approval by the Chairperson is reported to the Audit Committee at the Audit Committee's next regularly scheduled meeting. The Audit Committee may also pre-approve services that
are expected to be provided to the Company by the independent registered public accounting firm during the next 12 months and at each regularly scheduled meeting of the Audit Committee,
management or the independent registered public accounting firm must report to the Audit Committee each service actually provided to the Company pursuant to the pre-approval.

Our
Audit Committee has determined that the provision of the non-audit services described in the table above was compatible with maintaining the independence of our
independent registered public accounting firm. The Audit Committee reviews each non-audit service to be provided and assesses the impact of the service on the registered public accounting
firm's independence.

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PART IV

Item 15.    Exhibits and Financial Statement Schedules



Exhibit No.

Description31.3

Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 200231.4

Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.


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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) 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.

COWEN GROUP, INC.By:

/s/ DAVID M. MALCOLMName:

David M. MalcolmTitle:

Chief Executive Officer and President


Dated:
April 28, 2009

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Exhibit Index

Exhibit No.

Description31.3

Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 200231.4

Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002


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