Piper Jaffray's earnings fell 27% with net income falling to $15.1 million while Jefferies reported a loss of $24.2 million.
Ex- hedge fund chief James Marquez was ordered to serve 51 months for conspiring to defraud investors.
Asian stocks bounced back while European securities slumped following the Federal Reserve's interest-rate cut.
Treasury Secretary Henry Paulson this morning expressed optimism that a temporary growth plan can be enacted quickly.
Although they are pessimistic about the U.S. economy, they are optimistic about their own company's prospects.
The subprime-credit debacle caused the firms' profits to fall sharply in the fourth quarter.
John Koehler will lead a group of nine specialists, each one focusing on advanced planning techniques.
In an surprise move, the Federal Reserve cut interest rates from 4.25% to 3.50%.
The recommendations are designed to handle conflicts of interest between managers and investors.
A meeting of some 50 independent mutual fund chairmen and lead directors this week could result in the creation of a permanent organization for independent fund executives.
