SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


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

		For the quarterly period ended ~~June 29,~~September 28, 2001

OR

OR

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

For the transition period from ~~_____________~~ to ~~_____________~~

Commission file number 1-14947

JEFFERIES GROUP, INC.

(Exact name of registrant as specified in its charter)


DELAWARE		95-4719745

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


11100 Santa Monica Blvd., Los Angeles, California		90025

(Address of principal executive offices)		(Zip Code)


~~Registrant’s telephone number, including area code:~~		~~(310) 445-1199~~

Registrant’s telephone number, including area code: (310) 445-1199

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

As of ~~June 29,~~September 28, 2001, the registrant had ~~25,837,656~~26,932,700 common shares, $.0001 par value, outstanding.

Page 1 of 18

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
		CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
		CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)
		CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited)~~
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item ~~4. Submission of Matters to a Vote of Security Holders~~
	~~Item~~ 6. Exhibits and Reports on Form 8-K
SIGNATURE

JEFFERIES GROUP, INC. AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
~~JUNE 29,~~SEPTEMBER 28, 2001


					Page

PART I.		FINANCIAL INFORMATION





Item 1.		Financial Statements





	Consolidated Statements of Financial Condition - ~~June 29,~~ September 28, 2001 (unaudited) and December 31, 2000		3




		Consolidated Statements of Earnings (unaudited) - Three Months and ~~Six~~Nine Months Ended ~~June 29,~~September 28, 2001 and ~~June 30,~~September 29, 2000		4




		Consolidated Statement of Changes in Stockholders’ Equity (unaudited) - ~~Six~~ Nine Months Ended ~~June 29,~~September 28, 2001		5




		Consolidated Statements of Cash Flows (unaudited) - ~~Six~~ Nine Months Ended ~~June 29,~~September 28, 2001 and ~~June 30,~~September 29, 2000		6




		Notes to Consolidated Financial Statements (unaudited)		8




Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		14




PART II.		OTHER INFORMATION





Item 1.		Legal Proceedings		17




Item 2.		Changes in Securities and Use of Proceeds		17




Item 4.6.		~~Submission of Matters to a Vote of Security Holders~~Exhibits and Reports on Form 8-K		17




~~Item 6.~~		~~Exhibits and Reports on Form 8-K~~		17

Page 2 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share amounts)


					June 29,			December 31,							September 28,			December 31,
					2001			2000							2001			2000

					(unaudited)										(unaudited)
ASSETS	ASSETS										ASSETS




Cash and cash equivalents	Cash and cash equivalents				$	78,083		$	24,996		Cash and cash equivalents				$	124,281		$	24,996




Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations	Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations					168,337			206,444		Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations					171,978			206,444




Receivable from brokers and dealers	Receivable from brokers and dealers					2,953,825			2,860,677		Receivable from brokers and dealers					3,102,083			2,860,677




Receivable from customers, officers and directors	Receivable from customers, officers and directors					180,921			254,562		Receivable from customers, officers and directors					163,405			254,562




Securities owned	Securities owned					261,904			224,738		Securities owned					299,361			224,738




Securities pledged to creditors	Securities pledged to creditors					99,195			96,324		Securities pledged to creditors					56,737			96,324




Investments	Investments					157,613			136,047		Investments					166,779			136,047




Premises and equipment	Premises and equipment					49,576			43,635		Premises and equipment					48,944			43,635




Other assets	Other assets					131,617			110,446		Other assets					182,215			110,446

					$	4,081,071		$	3,957,869						$	4,315,783		$	3,957,869

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY										LIABILITIES AND STOCKHOLDERS’ EQUITY
Bank loans											Bank loans				$	51,000		$	—




Payable to brokers and dealers	Payable to brokers and dealers				$	2,773,739		$	2,423,488		Payable to brokers and dealers					2,882,825			2,423,488




Payable to customers	Payable to customers					294,409			501,786		Payable to customers					335,189			501,786




Securities sold, not yet purchased	Securities sold, not yet purchased					152,854			171,685		Securities sold, not yet purchased					120,620			171,685




Accrued expenses and other liabilities	Accrued expenses and other liabilities					199,402			249,918		Accrued expenses and other liabilities					219,367			249,918

						3,420,404			3,346,877							3,609,001			3,346,877




Long-term convertible debt	Long-term convertible debt					3,985			2,963		Long-term convertible debt					4,175			2,963




Long-term debt	Long-term debt					149,631			149,582		Long-term debt					149,655			149,582

						3,574,020			3,499,422							3,762,831			3,499,422

Stockholders’ equity:	Stockholders’ equity:										Stockholders’ equity:




	Preferred stock, $.0001 par value. Authorized 10,000,000 shares; none issued					—			—		Preferred stock, $.0001 par value. Authorized 10,000,000 shares; none issued					—			—




	Common stock, $.0001 par value. Authorized 100,000,000 shares; issued 26,579,754 shares in 2001 and 25,177,419 shares in 2000					3			3		Common stock, $.0001 par value. Authorized 100,000,000 shares; issued 27,768,798 shares in 2001 and 25,177,419 shares in 2000					3			3




	Additional paid-in capital					114,524			86,004		Additional paid-in capital					151,158			86,004




	Retained earnings					414,568			384,846		Retained earnings					423,876			384,846




	Less:										Less:




		Treasury stock, at cost, 742,098 shares in 2001 and 489,039 shares in 2000				(17,452	)		(10,383	)		Treasury stock, at cost, 836,098 shares in 2001 and 489,039 shares in 2000				(20,101	)		(10,383	)




		Accumulated other comprehensive loss:										Accumulated other comprehensive loss:




			Currency translation adjustments			(3,454	)		(885	)			Currency translation adjustments			(846	)		(885	)




			Additional minimum pension liability			(1,138	)		(1,138	)			Additional minimum pension liability			(1,138	)		(1,138	)

		Total accumulated other comprehensive loss				(4,592	)		(2,023	)		Total accumulated other comprehensive loss				(1,984	)		(2,023	)

				Total stockholders’ equity		507,051			458,447					Total stockholders’ equity		552,952			458,447

					$	4,081,071		$	3,957,869						$	4,315,783		$	3,957,869

See accompanying unaudited notes to consolidated financial statements.

Page 3 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except per share amounts)


			Three Months Ended				Six Months Ended						Three Months Ended				Nine Months Ended

			June 29,		June 30,		June 29,		June 30,				Sept. 28,		Sept. 29,		Sept. 28,		Sept. 29,
			2001		2000		2001		2000				2001		2000		2001		2000

Revenues:	Revenues:										Revenues:




	Commissions		$	53,859	$	54,070	$	114,407	$	112,650	Commissions		$	51,081	$	51,411	$	165,488	$	164,061




	Principal transactions			72,404		59,037		159,230		138,420	Principal transactions			54,449		65,445		213,679		203,865




	Corporate finance			44,077		19,657		61,089		34,874	Corporate finance			22,468		38,240		83,557		73,114




	Interest			38,332		46,962		78,276		84,651	Interest			31,259		39,589		109,535		124,240




	Asset management			5,811		2,214		10,540		4,308	Asset management			4,652		2,941		15,192		7,249




	Other			1,414		678		2,063		2,475	Other			1,735		673		3,798		3,148

		Total revenues		215,897		182,618		425,605		377,378		Total revenues		165,644		198,299		591,249		575,677




Interest expense	Interest expense			34,453		38,277		67,256		69,376	Interest expense			28,565		35,047		95,821		104,423

Revenues, net of interest expense	Revenues, net of interest expense			181,444		144,341		358,349		308,002	Revenues, net of interest expense			137,079		163,252		495,428		471,254

Non-interest expenses:	Non-interest expenses:										Non-interest expenses:




	Compensation and benefits			111,244		87,530		218,728		188,217	Compensation and benefits			79,877		102,533		298,605		290,750




	Floor brokerage and clearing fees			11,183		9,309		22,088		18,765	Floor brokerage and clearing fees			10,865		8,719		32,953		27,484




	Communications			12,230		11,598		23,568		23,710	Communications			9,595		11,526		33,163		35,236




	Occupancy and equipment rental			6,135		4,605		11,627		9,165	Occupancy and equipment rental			5,346		4,873		16,973		14,038




	Travel and promotional			5,703		4,960		11,312		9,762	Travel and promotional			5,656		3,728		16,968		13,490




	Other			6,375		4,958		15,321		10,801	Other			7,351		6,349		22,672		17,150

		Total non-interest expenses		152,870		122,960		302,644		260,420		Total non-interest expenses		118,690		137,728		421,334		398,148

Earnings before income taxes	Earnings before income taxes			28,574		21,381		55,705		47,582	Earnings before income taxes			18,389		25,524		74,094		73,106




Income taxes	Income taxes			12,022		9,009		23,469		20,186	Income taxes			7,757		10,811		31,226		30,997

		Net earnings	$	16,552	$	12,372	$	32,236	$	27,396		Net earnings	$	10,632	$	14,713	$	42,868	$	42,109

Earnings per share:	Earnings per share:										Earnings per share:




	Basic		$	0.68	$	0.51	$	1.34	$	1.14	Basic		$	0.43	$	0.62	$	1.76	$	1.76

	Diluted		$	0.65	$	0.51	$	1.27	$	1.13	Diluted		$	0.40	$	0.60	$	1.67	$	1.74

Weighted average shares:	Weighted average shares:										Weighted average shares:




	Basic			24,206		24,052		24,124		24,000	Basic			24,938		23,859		24,397		23,862




	Diluted			25,564		24,258		25,321		24,217	Diluted			26,593		24,402		25,746		24,220

See accompanying unaudited notes to consolidated financial statements.

Page 4 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)
~~SIX~~NINE MONTHS ENDED ~~JUNE 29,~~SEPTEMBER 28, 2001
(Dollars in thousands, except per share amounts)

Accumulated Total
Additional Other Stock-
Common Paid-in Retained Treasury Comprehensive holders’
Stock Capital Earnings Stock Loss Equity

Balance, December 31, 2000 $ 3 $ 86,004 $ 384,846 $ (10,383 ) $ (2,023 ) $ 458,447
Exercise of stock options, including tax benefits (74,256 shares) — 1,771 — — — 1,771
Purchase of treasury stock (237,000 shares) — — — (6,741 ) — (6,741 )
Issuance of ESPP shares (122,485 shares) — 2,405 — — — 2,405
Issuance of restricted stock (1,189,535 shares), net of forfeitures, and additional vesting of restricted stock shares, including tax benefits — 22,796 — (328 ) — 22,468
Employee stock ownership plan amortization and stock purchases, net — 1,548 — — — 1,548
Quarterly dividends ($.05 per share per quarter) — — (2,514 ) — — (2,514 )
Comprehensive income:
Net earnings — — 32,236 — — 32,236
Other comprehensive loss, net of tax:
Translation adjustment — — — — (2,569 ) (2,569 )

Comprehensive income — — — — — 29,667

Balance, June 29, 2001 $ 3 $ 114,524 $ 414,568 $ (17,452 ) $ (4,592 ) $ 507,051


												Accumulated			Total
				Additional								Other			Stock-
		Common		Paid-in		Retained			Treasury			Comprehensive			holders'
		Stock		Capital		Earnings			Stock			Loss			Equity

Balance, December 31, 2000		$	3	$	86,004	$	384,846		$	(10,383	)	$	(2,023	)	$	458,447
Exercise of stock options, including tax benefits (76,256 shares)			—		1,826		—			—			—			1,826
Purchase of treasury stock (330,000 shares)			—		—		—			(9,390	)		—			(9,390	)
Issuance of ESPP and common shares (255,265 shares)			—		5,903		—			—			—			5,903
Issuance of restricted stock (2,242,799 shares), net of forfeitures, and additional vesting of restricted stock shares, including tax benefits			—		55,023		—			(328	)		—			54,695
Employee stock ownership plan amortization and stock purchases, net			—		2,402		—			—			—			2,402
Quarterly dividends ($.05 per share per quarter)			—		—		(3,838	)		—			—			(3,838	)
Comprehensive income:
	Net earnings		—		—		42,868			—			—			42,868
Other comprehensive income, net of tax:
	Translation adjustment		—		—		—			—			39			39

Comprehensive income			—		—		—			—			—			42,907

Balance, September 28, 2001		$	3	$	151,158	$	423,876		$	(20,101	)	$	(1,984	)	$	552,952

See accompanying unaudited notes to consolidated financial statements.

Page 5 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)

Six Months Ended

June 29, June 30,
2001 2000

Cash flows from operating activities:
Net earnings $ 32,236 $ 27,396

Adjustments to reconcile net earnings to net cash provided by (used in) operations:
Depreciation and amortization 7,971 5,697
(Increase) decrease in cash and securities segregated and on deposit for regulatory purposes 38,107 (44,693 )
(Increase) decrease in receivables:
Brokers and dealers (93,148 ) (1,326,672 )
Customers, officers and directors 73,641 9,593
(Increase) decrease in securities owned (37,166 ) 101,618
Increase in securities pledged to creditors (2,871 ) —
Increase in investments (21,566 ) (11,402 )
Increase in other assets (21,766 ) (1,898 )
Increase (decrease) in operating payables:
Brokers and dealers 350,251 1,154,217
Customers (207,377 ) 41,546
Increase (decrease) in securities sold, not yet purchased (18,831 ) 6,926
Decrease in accrued expenses and other liabilities (50,516 ) (17,492 )

Total adjustments 16,729 (82,560 )

Net cash provided by (used in) operating activities 48,965 (55,164 )


					Nine Months Ended

					Sept. 28,			Sept. 29,
					2001			2000

Cash flows from operating activities:
	Net earnings				$	42,868		$	42,109

	Adjustments to reconcile net earnings to net cash provided by (used in) operations:
		Depreciation and amortization				12,612			8,887
		(Increase) decrease in cash and securities segregated and on deposit for regulatory purposes				35,433			(93,462	)
		(Increase) decrease in receivables:
			Brokers and dealers			(241,406	)		(760,812	)
			Customers, officers and directors			91,157			(29,748	)
		(Increase) decrease in securities owned				(73,593	)		35,934
		Decrease in securities pledged to creditors				39,587			—
		Increase in investments				(30,732	)		(12,796	)
		Increase in other assets				(44,932	)		(30,384	)
		Increase (decrease) in operating payables:
			Brokers and dealers			459,337			578,363
			Customers			(166,597	)		140,029
		Decrease in securities sold, not yet purchased				(51,065	)		(33,468	)
��		Increase (decrease) in accrued expenses and other liabilities				(32,747	)		9,256

				Total adjustments		(2,946	)		(188,201	)

				Net cash provided by (used in) operating activities		39,922			(146,092	)

Continued on next page.

See accompanying unaudited notes to consolidated financial statements.

Page 6 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS — CONTINUED (Unaudited)
(Dollars in thousands)


				Six Months Ended										Nine Months Ended

				June 29,			June 30,							Sept. 28,			Sept. 29,
				2001			2000							2001			2000

Cash flows from financing activities:	Cash flows from financing activities:									Cash flows from financing activities:




	Net proceeds from (payments on):											Net proceeds from (payments on):




	Bank loans				—			77,000				Bank loans			51,000			90,000




	Subordinated loans on consolidated subsidiary				1,300			—				Subordinated loans on consolidated subsidiary			1,300			—




	Repurchase of treasury stock				(6,741	)		(7,931	)			Convertible note issuance			—			2,792




	Dividends paid				(2,514	)		(2,432	)			Repurchase of treasury stock			(9,390	)		(9,796	)




	Exercise of stock options				1,771			1,274				Dividends paid			(3,838	)		(3,650	)




	Issuance of ESPP shares				2,405			3,402				Exercise of stock options			1,826			1,410




	Issuance of restricted stock				22,468			5,269				Issuance of ESPP and common shares			5,903			5,678




	Employee Stock Ownership Plan stock purchases				—			(349	)			Issuance of restricted stock			38,667			11,446
												Employee Stock Ownership Plan stock purchases			—			(349	)
			Net cash provided by financing activities		18,689			76,233
													Net cash provided by financing activities		85,468			97,531
Cash flows from investing activities - purchase of premises and equipment					(11,720	)		(3,297	)

Cash flows from investing activities:										Cash flows from investing activities:
												Lawrence Helfant, Inc. acquisition (net of cash received)			(12,404	)		—
												Purchase of premises and equipment			(13,652	)		(6,909	)

													Net cash flows from investing activities		(26,056	)		(6,909	)

Effect of foreign currency translation on cash	Effect of foreign currency translation on cash				(2,847	)		(937	)	Effect of foreign currency translation on cash					(49	)		(1,684	)

			Net increase in cash and cash equivalents		53,087			16,835					Net increase in cash and cash equivalents		99,285			(57,154	)




Cash and cash equivalents — beginning of period	Cash and cash equivalents — beginning of period				24,996			77,197		Cash and cash equivalents — beginning of period					24,996			77,197

Cash and cash equivalents — end of period	Cash and cash equivalents — end of period			$	78,083		$	94,032		Cash and cash equivalents — end of period				$	124,281		$	20,043

Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:									Supplemental disclosures of cash flow information:




	Cash paid during the period for:									Cash paid during the period for:




		Interest		$	73,688		$	66,786			Interest			$	103,675		$	102,653

		Income taxes		$	29,893		$	1,051			Income taxes			$	31,085		$	10,819

											Lawrence Helfant, Inc. acquisition:
												Fair value of assets acquired		$	30,628
												Liabilities assumed			(2,196	)
												Stock issued (458,333 shares)			(16,028	)

												Net cash paid for acquisition			12,404
												Cash acquired in acquisition			1,896

												Cash paid for acquisition		$	14,300

See accompanying unaudited notes to consolidated financial statements.

Page 7 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Consolidated Financial Statements

The accompanying consolidated financial statements include the accounts of Jefferies Group, Inc. (“Group”) and all its subsidiaries (“Company”), including Jefferies & Company, Inc. (“JEFCO”). The accounts of W & D Securities, Inc. (“W & D”) are consolidated because of the nature and extent of Group’s ownership interest in W & D. The Company and its subsidiaries operate and are managed as a single business segment, that of a securities broker-dealer, which includes several types of financial services, such as principal and agency transactions in equity, convertible debt and high yield, as well as corporate finance activities. Since the Company’s services are provided using the same distribution channels, support services and facilities and all are provided to meet client needs, the Company does not identify assets or allocate all expenses to any service or class of service as a separate business segment.

All significant intercompany accounts and transactions are eliminated in consolidation. The consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for the fair statement of the results for the interim periods and should be read in conjunction with the Company’s annual report for the year ended December 31, 2000.

Securities Transactions

All transactions in securities, commission revenues and related expenses are recorded on a trade-date basis.

Securities owned and securities sold, not yet purchased, are valued at market, and unrealized gains or losses are reflected in revenues from principal transactions.

Reclassifications

Certain reclassifications have been made to the prior period’s amounts to conform to the current period’s presentation.

Helfant Acquisition

To expand its floor brokerage operations, the Company acquired Lawrence Helfant, Inc. (“Helfant”) in the third quarter of 2001, with a combination of stock and cash totaling approximately $30.3 million. The acquisition was accounted for as a purchase and resulted in approximately $20.0 million in goodwill.

Receivable from, and Payable to, Brokers and Dealers

Receivable from and payable to brokers and dealers consists of the following as of ~~June 29,~~September 28, 2001 (in thousands of dollars):


Receivable from brokers and dealers:	Receivable from brokers and dealers:			Receivable from brokers and dealers:




	Securities borrowed	$	2,802,034	Securities borrowed	$	2,951,925




	Other		151,791	Other		150,158

		$	2,953,825		$	3,102,083

Payable to brokers and dealers:	Payable to brokers and dealers:			Payable to brokers and dealers:




	Securities loaned	$	2,722,523	Securities loaned	$	2,792,835




	Other		51,216	Other		89,990

		$	2,773,739		$	2,882,825

Page 8 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

Securities Owned, Securities Pledged to Creditors and Securities Sold, Not Yet Purchased

The following is a summary of the market value of major categories of securities owned and securities sold, not yet purchased, as of ~~June 29,~~September 28, 2001 (in thousands of dollars):


			Securities				Securities
			Sold,				Sold,
	Securities		Not Yet		Securities		Not Yet
	Owned		Purchased		Owned		Purchased

Corporate equity securities	$	91,739	$	133,580	$	63,582	$	69,201




High-yield securities		113,347		4,788		113,647		1,593




Corporate debt securities		56,075		14,474		118,685		41,576
U.S. government securities						2,625		8,166




Options		743		12		822		84

	$	261,904	$	152,854	$	299,361	$	120,620

The following is a summary of the market value of major categories of securities pledged to creditors as of ~~June 29,~~September 28, 2001 (in thousands of dollars):


	Securities
	Pledged		Securities
	To Creditors		Pledged To Creditors

Corporate equity securities	$	61,186	$	24,197




High yield securities		13,851		8,646




Corporate debt securities		24,158		23,894

	$	99,195	$	56,737

Investments

Investments consist of the following as of ~~June 29,~~September 28, 2001 (in thousands of dollars):


Debt and equity investments	$	19,375	$	19,361




Partnership interests		57,704		53,564




Equity and debt interests in affiliates		80,534		93,854

	$	157,613	$	166,779

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and short term investments. Cash equivalents are part of the cash management activities of the Company and generally mature within 90 days. The following is a summary of cash and cash equivalents as of ~~June 29,~~September 28, 2001 (in thousands of dollars):


Cash in banks	$	16,515	$	21,078




Short term investments		61,568		103,203

	$	78,083	$	124,281

Page 9 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

Earnings per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three month and ~~six~~nine month periods ended ~~June 29,~~September 28, 2001 and ~~June 30,~~September 29, 2000 (in thousands, except per share amounts):


	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended

	June 29,		June 30,		June 29,		June 30,		Sept. 28,		Sept. 29,		Sept. 28,		Sept. 29,
	2001		2000		2001		2000		2001		2000		2001		2000

Net earnings	$	16,552	$	12,372	$	32,236	$	27,396	$	10,632	$	14,713	$	42,868	$	42,109

Shares for basic and diluted calculations:




Average shares used in basic computation		24,206		24,052		24,124		24,000		24,938		23,859		24,397		23,862




Stock options		529		147		472		155		591		325		510		208




Restricted stock		829		59		725		62		1,064		218		839		150

Average shares used in diluted computation		25,564		24,258		25,321		24,217		26,593		24,402		25,746		24,220

Earnings per share:




Basic	$	0.68	$	0.51	$	1.34	$	1.14	$	0.43	$	0.62	$	1.76	$	1.76

Diluted	$	0.65	$	0.51	$	1.27	$	1.13	$	0.40	$	0.60	$	1.67	$	1.74

Asset Management

The following summarizes revenues from asset management for the three month and ~~six~~nine month periods ended ~~June 29,~~September 28, 2001 and ~~June 30,~~September 29, 2000 (in thousands of dollars):


	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended

	June 29,		June 30,		June 29,		June 30,		Sept. 28,		Sept. 29,		Sept. 28,		Sept. 29,
	2001		2000		2001		2000		2001		2000		2001		2000

High Yield (HY)




Performance based	$	4,489	$	1,509	$	7,875	$	3,010	$	3,175	$	1,883	$	11,050	$	4,893




Asset based		537		349		1,037		427		733		444		1,770		871




Non-HY Employee Funds




Asset based		84		—		165		—		83		57		248		57




International		701		356		1,463		871		661		557		2,124		1,428

Total	$	5,811	$	2,214	$	10,540	$	4,308	$	4,652	$	2,941	$	15,192	$	7,249

Other Comprehensive ~~Loss~~Income (Loss)

The following summarizes other comprehensive income and accumulated other comprehensive ~~income~~loss at ~~June 29,~~September 28, 2001 and for the three months then ended (in thousands of dollars):


	Before-Tax			Income Tax		Net-of-Tax			Before-Tax		Income Tax		Net-of-Tax
	Amount			or Benefit		Amount			Amount		or Benefit		Amount

Currency translation adjustments	$	(143	)	$	—	$	(143	)	$	2,608	$	—	$	2,608




Minimum pension liability adjustment		—			—		—			—		—		—

Other comprehensive loss	$	(143	)	$	—	$	(143	)
Other comprehensive income									$	2,608	$	—	$	2,608

Page 10 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Income (Loss)

Beginning at March 30, 2001 $ (3,311 ) $ (1,138 ) $ (4,449 )
Change in second quarter of 2001 (143 ) — (143 )

Ending at June 29, 2001 $ (3,454 ) $ (1,138 ) $ (4,592 )


				Minimum			Accumulated
	Currency			Pension			Other
	Translation			Liability			Comprehensive
	Adjustments			Adjustment			Income (Loss)

Beginning at June 29, 2001	$	(3,454	)	$	(1,138	)	$	(4,592	)
Change in third quarter of 2001		2,608			—			2,608

Ending at September 28, 2001	$	(846	)	$	(1,138	)	$	(1,984	)

The following summarizes other comprehensive ~~income~~loss and accumulated other comprehensive ~~income~~loss at ~~June 30,~~September 29, 2000 and for the three months then ended (in thousands of dollars):


	Before-Tax			Income Tax		Net-of-Tax			Before-Tax			Income Tax		Net-of-Tax
	Amount			or Benefit		Amount			Amount			or Benefit		Amount

Currency translation adjustments	$	(771	)	$	—	$	(771	)	$	(747	)	$	—	$	(747	)




Minimum pension liability adjustment		—			—		—			—			—		—

Other comprehensive loss	$	(771	)	$	—	$	(771	)	$	(747	)	$	—	$	(747	)

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Income (Loss)

Beginning at March 31, 2000 $ 70 $ (183 ) $ (113 )
Change in second quarter of 2000 (771 ) — (771 )

Ending at June 30, 2000 $ (701 ) $ (183 ) $ (884 )


				Minimum			Accumulated
	Currency			Pension			Other
	Translation			Liability			Comprehensive
	Adjustments			Adjustment			Income (Loss)

Beginning at June 30, 2000	$	(701	)	$	(183	)	$	(884	)
Change in third quarter of 2000		(747	)		—			(747	)

Ending at September 29, 2000	$	(1,448	)	$	(183	)	$	(1,631	)

Comprehensive income for the three months ended ~~June 29,~~September 28, 2001 and ~~June 30,~~September 29, 2000 was as follows:


	June 29,			June 30,			Sept. 28,		Sept. 29,
	2001			2000			2001		2000

Net earnings	$	16,552		$	12,372		$	10,632	$	14,713




Other comprehensive loss		(143	)		(771	)
Other comprehensive income (loss)										2,608	(747	)

Comprehensive income	$	16,409		$	11,601		$	13,240	$	13,966

The following summarizes other comprehensive income and accumulated other comprehensive ~~income~~loss at ~~June 29,~~September 28, 2001 and for the ~~six~~nine months then ended (in thousands of dollars):


	Before-Tax			Income Tax		Net-of-Tax			Before-Tax		Income Tax		Net-of-Tax
	Amount			or Benefit		Amount			Amount		or Benefit		Amount

Currency translation adjustments	$	(2,569	)	$	—	$	(2,569	)	$	39	$	—	$	39




Minimum pension liability adjustment		—			—		—			—		—		—

Other comprehensive loss	$	(2,569	)	$	—	$	(2,569	)
Other comprehensive income									$	39	$	—	$	39

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Income (Loss)

Beginning at December 31, 2000 $ (885 ) $ (1,138 ) $ (2,023 )
Change in first half of 2001 (2,569 ) — (2,569 )

Ending at June 29, 2001 $ (3,454 ) $ (1,138 ) $ (4,592 )


				Minimum			Accumulated
	Currency			Pension			Other
	Translation			Liability			Comprehensive
	Adjustments			Adjustment			Income (Loss)

Beginning at December 31, 2000	$	(885	)	$	(1,138	)	$	(2,023	)
Change in 2001		39			—			39

Ending at September 28, 2001	$	(846	)	$	(1,138	)	$	(1,984	)

Page 11 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

The following summarizes other comprehensive ~~income~~loss and accumulated other comprehensive ~~income~~loss at ~~June 30,~~September 29, 2000 and for the ~~six~~nine months then ended (in thousands of dollars):


	Before-Tax			Income Tax		Net-of-Tax			Before-Tax			Income Tax		Net-of-Tax
	Amount			or Benefit		Amount			Amount			or Benefit		Amount

Currency translation adjustments	$	(937	)	$	—	$	(937	)	$	(1,684	)	$	—	$	(1,684	)




Minimum pension liability adjustment		—			—		—			—			—		—

Other comprehensive loss	$	(937	)	$	—	$	(937	)	$	(1,684	)	$	—	$	(1,684	)

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Income (Loss)

Beginning at December 31, 1999 $ 236 $ (183 ) $ 53
Change in first half of 2000 (937 ) — (937 )

Ending at June 30, 2000 $ (701 ) $ (183 ) $ (884 )


				Minimum			Accumulated
	Currency			Pension			Other
	Translation			Liability			Comprehensive
	Adjustments			Adjustment			Income (Loss)

Beginning at December 31, 1999	$	236		$	(183	)	$	53
Change in 2000		(1,684	)		—			(1,684	)

Ending at September 29, 2000	$	(1,448	)	$	(183	)	$	(1,631	)

Comprehensive income for the ~~six~~nine months ended ~~June 29,~~September 28, 2001 and ~~June 30,~~September 29, 2000 was as follows:


	June 29,			June 30,			Sept. 28,		Sept. 29,
	2001			2000			2001		2000

Net earnings	$	32,236		$	27,396		$	42,868	$	42,109




Other comprehensive loss		(2,569	)		(937	)
Other comprehensive income (loss)										39	(1,684	)

Comprehensive income	$	29,667		$	26,459		$	42,907	$	40,425

Net Capital Requirements

As registered broker-dealers, JEFCO, ~~and~~ W & D and Helfant are subject to the Securities and Exchange Commission’s Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital. JEFCO and W & D have elected to use the alternative method permitted by the Rule, which requires that they each maintain minimum net capital, as defined, equal to the greater of $250,000 or 2% of the aggregate debit balances arising from customer transactions, as defined. Helfant has elected to use the aggregate indebtedness standard permitted by the Rule, which requires it to maintain its aggregate indebtedness to all other persons at less than 1500 percent of its net capital.

Net capital changes from day to day, but as of ~~June 29,~~September 28, 2001, JEFCO’s, ~~and~~ W & D’s and Helfant’s net capital was ~~$144.7~~$125.0 million, $1.9 million and ~~$2.4~~$3.3 million, respectively, which exceeded minimum net capital requirements by ~~$141.0~~$120.5 million, $1.6 million and ~~$2.1~~$3.0 million, respectively.

Quarterly Dividends

In 1988, the Company instituted a policy of paying regular quarterly dividends. There are no restrictions on the Company’s present ability to pay dividends on common stock, other than the governing provisions of the Delaware General Corporation Law.

Dividends per Common Share (declared and paid):


	1st Qtr.		2nd Qtr.		1st Qtr.		2nd Qtr.		3rd Qtr.

2001	$	.05	$	.05	$	.05	$	.05	$	.05




2000	$	.05	$	.05	$	.05	$	.05	$	.05

Page 12 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

Off-Balance Sheet Risk

In the normal course of business, the Company had letters of credit outstanding aggregating $32.8 million at ~~June 29,~~September 28, 2001, to satisfy various collateral requirements in lieu of depositing cash or securities.

Segment Reporting

The company’s operations have been classified into a single business segment, a securities broker-dealer, which includes several types of financial services. This segment includes the traditional securities brokerage and investment banking activities of the Company. The Company’s business is predominantly in the United States with less than 10% of revenues and approximately 2% of assets attributable to international operations.

New Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board issued two Statements: Statement No. 141, “Business Combinations”, and Statement No. 142, “Goodwill and Other Intangible Assets”.

Those Statements will change the accounting for business combinations and goodwill in two significant ways. First, Statement 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. Use of the pooling-of-interests method will be prohibited. Second, Statement 142 changes the accounting for goodwill from an amortization method to an impairment-only approach. Thus, amortization of goodwill, including goodwill recorded in past business combinations, will cease upon adoption of that Statement, which, for companies with calendar year ends, will be January 1, 2002. The implementation of these statements is not expected to have a material impact on the Company.

Goodwill

Goodwill ~~which~~ represents the excess of cost over net assets acquired is amortized on a straight-line basis over ten years and relates to the acquisition of The Europe Company Ltd. in the third quarter of 2000. At June 29, 2001, excess of purchase price over net assets acquired remaining was $11.7 million, net of accumulated amortization of $1.2 million and is included in other assets. The following is a summary of goodwill as of September 28, 2001 (in thousands of dollars):


					Excess of Purchase
	Excess of Purchase				Price Over Net
	Price Over Net		Accumulated		Assets Acquired
Acquisition	Assets Acquired		Amortization		Remaining		Acquisition Date	Amortization Period

The Europe Company	$	13,376	$	1,599	$	11,777	Aug. 2000	10 years
Lawrence Helfant, Inc.		20,007		—		20,007	Sept. 2001	None

	$	33,383	$	1,599	$	31,784

Page 13 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

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

Analysis of Financial Condition

Total assets ~~and total liabilities as of June 29, 2001 were $4.1 billion and $3.6 billion, respectively, and were relatively unchanged~~increased $357.9 million from $3,957.9 million at December 31, ~~2000.~~2000 to $4,315.8 million at September 28, 2001. Total liabilities increased $263.4 million from $3,499.4 million at December 31, 2000 to $3,762.8 million at September 28, 2001. The increase in assets and liabilities is mostly due to an increase in the balances associated with JEFCO’s securities borrowed and loaned matched book business. Additionally, total stockholders’ equity increased $94.5 million from $458.4 million at December 31, 2000 to $553.0 million at September 28, 2001. The increase in stockholders’ equity was partly due to stock issuances and amortization, net of stock purchases amounting to $55.4 million and net earnings of $42.9 million.

~~Second~~Third Quarter 2001 Versus ~~Second~~Third Quarter 2000

Revenues, net of interest expense, ~~increased 26%~~decreased 16% to ~~$181.4~~$137.1 million, compared to ~~$144.3~~$163.3 million for the ~~second~~third quarter of 2000. The ~~increase~~decrease was due primarily to a ~~$24.4~~$15.8 million, or ~~124%~~41%, ~~increase~~decrease in corporate finance, ~~a $13.4~~an $11.0 million, or ~~23%~~17%, ~~increase~~decrease in principal transactions, a ~~$3.6~~$1.8 million, or ~~162%, increase in asset management, and a $736,000, or 109%, increase in other income, partially offset by a $4.8 million, or 55%~~41%, decrease in net interest income (interest revenues less interest expense)., partially offset by a $1.7 million, or 58%, increase in asset management, and a $1.1 million increase in other income. Commissions revenues remained relatively ~~unchanged.~~unchanged, despite being closed for four trading days as a result of the September 11th tragedy. Principal transactions revenue ~~increased~~decreased mostly due to the ~~High Yield~~Equities and ~~Equities~~International Divisions. Corporate finance revenues ~~increased~~decreased due mostly to ~~an increase~~a decrease in ~~debt and equity underwriting.~~advisory fees. Net interest income was down mostly due to decreased securities borrowed and loaned matched book ~~business.~~business and decreased interest rates. Asset management increased due to more assets under management and greater profitability. Other income increased mostly due to several miscellaneous items.

Total non-interest expenses ~~increased 24%~~decreased 14% to ~~$152.9~~$118.7 million, compared to ~~$123.0~~$137.7 million for the ~~second~~third quarter of 2000. Compensation and benefits ~~increased $23.7~~decreased $22.7 million, or ~~27%~~22%, mostly due to ~~an increase~~a decrease in incentive based compensation accruals, ~~as well as~~despite an increased headcount. Floor brokerage and clearing fees increased ~~$1.9~~$2.1 million, or ~~20%~~25%, due to increased volume of business executed on the various exchanges. ~~Occupancy and equipment rental increased $1.5 million, or 33%, mostly due to office expansion. Other expense increased $1.4 million or 29%, largely due to higher legal expense.~~ Travel and promotional increased ~~$743,000,~~$1.9 million, or ~~15%~~52%, largely due to an increase in business travel. Communications ~~were increased $632,000~~decreased $1.9 million, or 5%17%, mostly due to ~~an increase in trade volume~~negotiated refunds and ~~headcount.~~lower rate charges on some services. Other expense increased $1.0 million or 16%, largely due to higher legal expense. Occupancy and equipment rental increased $473,000, or 10%, mostly due to office expansion.

Earnings before income taxes were ~~up 34%~~down 28% to ~~$28.6~~$18.4 million, compared to ~~$21.4~~$25.5 million for the same prior year period. The effective tax rate was approximately ~~42.1%~~42% for the ~~second~~third quarter of 2001 and 2000. Net earnings were ~~up $4.2~~down $4.1 million to ~~$16.6~~$10.6 million, compared to ~~$12.4~~$14.7 million for the same prior year period.

Basic net earnings per share were ~~$0.68~~$0.43 for the ~~second~~third quarter of 2001 on ~~24,206,000~~24,938,000 shares compared to ~~$0.51~~$0.62 in the 2000 period on ~~24,052,000~~23,859,000 shares. Diluted net earnings per share were ~~$0.65~~$0.40 for the ~~second~~third quarter of 2001 on ~~25,564,000~~26,593,000 shares compared to ~~$0.51~~$0.60 in the comparable 2000 period on ~~24,258,000~~24,402,000 shares.

First ~~Half~~Nine Months 2001 Versus First ~~Half~~Nine Months 2000

Revenues, net of interest expense, increased ~~16%~~5% to ~~$358.3~~$495.4 million, compared to ~~$308.0~~$471.3 million for the first ~~half~~nine months of 2000. The increase was due primarily to a ~~$26.2~~$10.4 million, or ~~75%~~14%, increase in corporate finance, a ~~$20.8~~$9.8 million, or ~~15%~~5%, increase in principal transactions, a ~~$6.2~~$7.9 million, or ~~145%~~110%, increase in asset management, and a ~~$1.8~~$1.4 million, or 2%1%, increase in commissions, a $650,000, or 21%, increase in other income, partially offset by a ~~$4.3~~$6.1 million, or ~~28%~~31%, decrease in net interest income (interest revenues less interest expense)~~, and a $412,000, or 17%, decrease in other income.~~. Commissions and principal transactions revenue increased mostly due to the ~~Equities,~~ High Yield, Convertibles and ~~Convertibles~~Equities Divisions. Corporate finance revenues increased due mostly to an increase in debt ~~and equity~~ underwriting. Net interest income was down mostly due to decreased securities borrowed and loaned matched book ~~business.~~business and interest rates. Asset management increased due to more assets under management and greater profitability. Other income ~~decreased~~increased mostly due to ~~a decrease in correspondent income.~~

Total non-interest expenses increased 16% to $302.6 million, compared to $260.4 million for the first half of 2000. Compensation and benefits increased $30.5 million, or 16%, mostly due to an increase in incentive based compensation accruals, as well as increased headcount. Other expense increased $4.5 million or 42%, largely due to higher legal expense. Floor brokerage and clearing fees increased $3.3 million, or 18%, due to increased volume of business executed on the various exchanges. Occupancy and equipment rental increased $2.5 million, or 27%, mostly due to officeseveral miscellaneous items.

Page 14 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

~~expansion.~~ Total non-interest expenses increased 6% to $421.3 million, compared to $398.1 million for the first nine months of 2000. Compensation and benefits increased $7.9 million, or 3%, mostly due to increased headcount. Other expense increased $5.5 million or 32%, largely due to higher legal expense. Floor brokerage and clearing fees increased $5.5 million, or 20%, due to increased volume of business executed on the various exchanges. Travel and promotional increased ~~$1.6~~$3.5 million, or ~~16%~~26%, largely due to an increase in business travel. Occupancy and equipment rental increased $2.9 million, or 21%, mostly due to office expansion. Communications ~~were unchanged from the same prior year period.~~decreased $2.1 million, or 6%, mostly due to negotiated refunds and lower rate charges on some services.

Earnings before income taxes were ~~up 17% to $55.7~~$74.1 million compared to ~~$47.6~~$73.1 million for the same prior year period. The effective tax rate was approximately ~~42.1%~~42% for the first ~~half~~nine months of both 2001 ~~compared to 42.4% for the first half of~~and 2000. Net earnings were up ~~$4.8 million,~~$759,000 to ~~$32.2~~$42.9 million, compared to ~~$27.4~~$42.1 million for the same prior year period.

Basic net earnings per share were ~~$1.34~~$1.76 for the ~~first half~~nine months of 2001 on ~~24,124,000~~24,397,000 shares compared to ~~$1.14~~$1.76 in the 2000 period on ~~24,000,000~~23,862,000 shares. Diluted net earnings per share were ~~$1.27~~$1.67 for the first ~~half~~nine months of 2001 on ~~25,321,000~~25,746,000 shares compared to ~~$1.13~~$1.74 in the comparable 2000 period on ~~24,217,000~~24,220,000 shares.

Page 15 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

Revenues by Source

The following provides a breakdown of total revenues by source for the three months and ~~six~~nine months ended ~~June 29,~~September 28, 2001 and ~~June 30,~~September 29, 2000.


		Three Months Ended											Three Months Ended

		June 29, 2001					June 30, 2000						Sept. 28, 2001					Sept. 29, 2000

				% of					% of						% of					% of
				Total					Total						Total					Total
		Amount		Revenues			Amount		Revenues				Amount		Revenues			Amount		Revenues

				(Dollars in thousands)									(Dollars in thousands)
Commissions and principal transactions:	Commissions and principal transactions:											Commissions and principal transactions:




	Equities	$	84,274		39	%	$	77,450		43	%	Equities	$	66,267		40	%	$	78,962		40	%




	International		15,659		7			19,764		11		International		13,093		8			19,706		10




	High Yield		17,897		8			7,928		4		High Yield		17,035		10			11,848		6




	Convertible		6,718		3			6,060		3		Convertible		8,153		5			6,031		3




	Other proprietary trading		1,715		1			1,905		1		Other proprietary trading		982		1			309		—

	Total		126,263		58			113,107		62		Total		105,530		64			116,856		59




Corporate finance	Corporate finance		44,077		20			19,657		11		Corporate finance		22,468		13			38,240		19




Interest	Interest		38,332		18			46,962		26		Interest		31,259		19			39,589		20




Asset management	Asset management		5,811		3			2,214		1		Asset management		4,652		3			2,941		2




Other	Other		1,414		1			678		—		Other		1,735		1			673		—

	Total revenues	$	215,897		100	%	$	182,618		100	%	Total revenues	$	165,644		100	%	$	198,299		100	%


		Nine Months Ended

		Sept. 28, 2001					Sept. 29, 2000

				% of					% of
				Total					Total
		Amount		Revenues			Amount		Revenues

		(Dollars in thousands)
Commissions and principal transactions:
	Equities	$	251,572		43	%	$	248,521		43	%
	International		48,192		8			64,223		11
	High Yield		51,114		9			32,464		6
	Convertible		25,257		4			19,073		3
	Other proprietary trading		3,032		—			3,645		1

	Total		379,167		64			367,926		64
Corporate finance			83,557		14			73,114		13
Interest			109,535		18			124,240		22
Asset management			15,192		3			7,249		1
Other			3,798		1			3,148		—

	Total revenues	$	591,249		100	%	$	575,677		100	%

Page 1516 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

Six Months Ended

June 29, 2001 June 30, 2000

% of % of
Total Total
Amount Revenues Amount Revenues

(Dollars in thousands)
Commissions and principal transactions:
Equities $ 185,305 44 % $ 169,559 45 %
International 35,099 8 44,517 12
High Yield 34,079 8 20,616 6
Convertible 17,104 4 13,042 3
Other proprietary trading 2,050 1 3,336 1

Total 273,637 65 251,070 67
Corporate finance 61,089 14 34,874 9
Interest 78,276 18 84,651 22
Asset management 10,540 2 4,308 1
Other 2,063 1 2,475 1

Total revenues $ 425,605 100 % $ 377,378 100 %

~~Page 16 of 18~~

~~JEFFERIES GROUP, INC. AND SUBSIDIARIES~~

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Many aspects of the Company’s business involve substantial risks of liability. In the normal course of business, the Company and its subsidiaries have been named as defendants or co-defendants in lawsuits involving primarily claims for damages. The Company’s management believes that pending litigation will not have a material adverse effect on the Company.

Item 2. Changes in Securities and Use of Proceeds

During ~~March~~July 2001, the Company issued ~~83,314~~312,207 shares of restricted stock as consideration for the purchase of minority interests in FS Private Investment LLC and FS Private Investments III LLC. The securities were issued in a transaction not involving a public offering and were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933.

During September and October 2001, the Company issued 458,333 common stock shares (443,333 of which are restricted common stock shares) to ~~Quarterdeck Investment Partners,~~the owners of Lawrence Helfant, Inc. in connection with ~~the Company’s strategic alliance with Quarterdeck Investment Partners, LLC~~ and as partial consideration for the Company’s acquisition of ~~16 2/3% interest in Quarterdeck Investment Partners, LLC.~~Lawrence Helfant, Inc. The securities were issued in a transaction not involving a public offering and were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933.

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

~~An annual meeting of the Company’s shareholders was held on June 7, 2001. At the meeting, with respect to the matters under consideration, the following votes were cast in the following manner:~~

For Withheld Non-vote

Election of Directors

Frank E. Baxter 20,555,266 1,661,156 —
W. Patrick Campbell 21,645,576 570,846 —
Richard G. Dooley 21,949,108 267,314 —
Richard B. Handler 20,554,176 1,662,246 —
Sheldon B. Lubar 21,936,708 279,714 —
Frank J. Macchiarola 21,950,208 266,214 —
John C. Shaw, Jr. 20,852,357 1,364,065 —

Item 6. Exhibits and Reports on Form 8-K

~~(b)~~ ~~Reports on Form 8-K.~~
~~None.~~
(b) Reports on Form 8-K.

None.

Page 17 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JEFFERIES GROUP, INC.

(Registrant)

Date: ~~August 10,~~November 9, 2001 By: /s/ Joseph A. Schenk

Joseph A. Schenk
Chief Financial Officer

Page 18 of 18


		OR

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

		For the transition period from ~~_____________~~ to ~~_____________~~


	For		Withheld		Non-vote

Election of Directors




Frank E. Baxter		20,555,266		1,661,156		—




W. Patrick Campbell		21,645,576		570,846		—




Richard G. Dooley		21,949,108		267,314		—




Richard B. Handler		20,554,176		1,662,246		—




Sheldon B. Lubar		21,936,708		279,714		—




Frank J. Macchiarola		21,950,208		266,214		—




John C. Shaw, Jr.		20,852,357		1,364,065		—

JEFFERIES GROUP, INC.

(Registrant)

~~August 10,~~November 9, 2001

Joseph A. Schenk

Joseph A. Schenk
Chief Financial Officer