SECURITIES & EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~March 31,~~June 30, 2010

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

For the transition period from ___ to ___

Commission File No. 1-106

GAMCO INVESTORS, INC.
(Exact name of Registrant as specified in its charter)

New York			13-4007862
(State of other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

One Corporate Center, Rye, NY			10580-1422
(Address of principle executive offices)			(Zip Code)

(914) 921-5100
Registrant’s telephone number, including area code

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yeso Noo 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 the definitions of “large accelerated filer", "accelerated filer", and "smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨		Accelerated filer x

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 Exchange Act).

Yes

Indicate the number of shares outstanding of each of the Registrant’s classes of Common Stock, as of the latest practical date.

Class		Outstanding at ~~April 30,~~July 31, 2010
Class A Common Stock, .001 par value		~~7,102,097~~6,982,351
Class B Common Stock, .001 par value		~~20,292,917~~20,292,263

INDEX

GAMCO INVESTORS, INC. AND SUBSIDIARIES


PART I.	FINANCIAL INFORMATION


Item 1.	Unaudited Condensed Consolidated Financial Statements

	Condensed Consolidated Statements of Income:
	- Three months ended ~~March 31,~~June 30, 2010 and 2009

	- Six months ended June 30, 2010 and 2009

	Condensed Consolidated Statements of Financial Condition:
	- ~~March 31,~~June 30, 2010
	- December 31, 2009
	- ~~March 31,~~June 30, 2009

	Condensed Consolidated Statements of Equity and Comprehensive Income:
	- ~~Three~~Six months ended ~~March 31,~~June 30, 2010 and 2009

	Condensed Consolidated Statements of Cash Flows:
	- ~~Three~~Six months ended ~~March 31,~~June 30, 2010 and 2009

	Notes to Unaudited Condensed Consolidated Financial Statements

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk (Included in Item 2)

Item 4.	Controls and Procedures

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

Item 6.	Exhibits


SIGNATURES

GAMCO INVESTORS, INC. AND SUBSIDIARIES	GAMCO INVESTORS, INC. AND SUBSIDIARIES							GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME	CONDENSED CONSOLIDATED STATEMENTS OF INCOME							CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED	UNAUDITED							UNAUDITED
(Dollars in thousands, except per share data)	(Dollars in thousands, except per share data)							(Dollars in thousands, except per share data)


		Three Months Ended							Three Months Ended						Six Months Ended
		March 31,							June 30,						June 30,
		2010			2009				2010			2009			2010			2009
Revenues
Investment advisory and incentive fees		$	49,342		$	35,199			$	50,271		$	35,989		$	99,613		$	71,188
Institutional research services			3,424			3,650				4,524			3,949			7,948			7,599
Distribution fees and other income			7,232			4,510				7,704			5,233			14,936			9,743
Total revenues			59,998			43,359				62,499			45,171			122,497			88,530
Expenses
Compensation			26,213			20,785				25,871			19,681			52,084			40,466
Management fee			2,448			1,349				1,380			2,304			3,828			3,653
Distribution costs			7,031			5,422				7,099			5,583			14,130			11,005
Other operating expenses			4,936			4,301				5,569			4,942			10,505			9,243
Total expenses			40,628			31,857				39,919			32,510			80,547			64,367

Operating income			19,370			11,502				22,580			12,661			41,950			24,163
Other income (expense)
Net gain from investments			5,232			2,592
Net gain/(loss) from investments										(7,797	)		10,730			(2,565	)		13,322
Interest and dividend income			815			1,278				1,089			801			1,904			2,079
Interest expense			(3,292	)		(3,234	)			(3,406	)		(3,435	)		(6,698	)		(6,669	)
Total other income, net			2,755			636
Total other income (expense), net										(10,114	)		8,096			(7,359	)		8,732
Income before income taxes			22,125			12,138				12,466			20,757			34,591			32,895
Income tax provision			8,294			3,988				4,401			7,133			12,695			11,121
Net income			13,831			8,150				8,065			13,624			21,896			21,774
Net income (loss) attributable to noncontrolling interests			105			(62	)
Net income/(loss) attributable to noncontrolling interests										16			308			121			246
Net income attributable to GAMCO Investors, Inc.'s shareholders		$	13,726		$	8,212			$	8,049		$	13,316		$	21,775		$	21,528

Net income attributable to GAMCO Investors, Inc.'s shareholders
per share:
Basic		$	0.50		$	0.30			$	0.30		$	0.49		$	0.80		$	0.79

Diluted		$	0.50		$	0.30			$	0.30		$	0.48		$	0.80		$	0.78

Weighted average shares outstanding:
Basic			27,184			27,379				26,979			27,384			27,081			27,381

Diluted			28,148			27,386				27,219			27,508			27,306			27,446

Dividends declared:		$	0.03		$	0.03			$	0.03		$	0.03		$	0.06		$	0.06

See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES	GAMCO INVESTORS, INC. AND SUBSIDIARIES										GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION	CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION										CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
UNAUDITED	UNAUDITED										UNAUDITED
(Dollars in thousands, except per share data)	(Dollars in thousands, except per share data)										(Dollars in thousands, except per share data)

		March 31,			December 31,			March 31,				June 30,			December 31,			June 30,
		2010			2009			2009				2010			2009			2009
ASSETS
Cash and cash equivalents, including restricted cash of $62,265,
$62,258 and $22,199, respectively		$	411,365		$	400,528		$	415,854
Cash and cash equivalents, including restricted cash of $62,287,
$62,258 and $42,215, respectively												$	321,029		$	400,528		$	452,545
Investments in securities, including restricted securities of $0,
$0 and $39,968, respectively			177,001			157,403			165,614
$0 and $19,998, respectively													213,079			157,403			162,128
Investments in partnerships			70,744			62,655			56,244				74,107			62,655			59,996
Receivable from brokers			25,368			30,072			12,911				54,548			30,072			15,226
Investment advisory fees receivable			18,858			35,685			12,044				16,844			35,685			12,791
Income tax receivable and deferred tax assets			-			-			23,913				3,436			-			9,303
Other assets			21,289			21,466			18,695				20,445			21,466			18,035
Total assets		$	724,625		$	707,809		$	705,275			$	703,488		$	707,809		$	730,024

LIABILITIES AND EQUITY
Payable to brokers		$	4,394		$	395		$	2,149			$	3,351		$	395		$	4,914
Income taxes payable and deferred tax liabilities			7,548			8,523			-				-			8,523			-
Capital lease obligation			5,239			5,265			5,313				5,219			5,265			5,296
Compensation payable			21,335			13,302			15,129				18,613			13,302			13,539
Securities sold, not yet purchased			9,063			9,569			3,570				13,652			9,569			7,037
Mandatorily redeemable noncontrolling interests			1,636			1,622			1,388				1,632			1,622			1,518
Accrued expenses and other liabilities			23,333			25,157			21,034				28,146			25,157			22,698
Sub-total			72,548			63,833			48,583				70,613			63,833			55,002

5.5% Senior notes (due May 15, 2013)			99,000			99,000			99,000				99,000			99,000			99,000
6% Convertible note (due August 14, 2011)			39,873			39,851			39,787				19,948			39,851			39,808
6.5% Convertible note (due October 2, 2018)			60,000			60,000			60,000				60,000			60,000			60,000
Total liabilities			271,421			262,684			247,370				249,561			262,684			253,810

Redeemable noncontrolling interests			1,464			1,464			3,168				7,773			1,464			1,326
Commitments and contingencies (Note J)
Equity
GAMCO Investors, Inc. stockholders' equity
Class A Common Stock, $0.001 par value; 100,000,000
shares authorized; 13,119,776, 13,120,276 and 13,033,062
issued, respectively; 7,131,297, 7,311,997 and 7,381,283
shares authorized; 13,203,330, 13,120,276 and 13,101,808
issued, respectively; 6,984,351, 7,311,997 and 7,446,529
outstanding, respectively			13			13			13				13			13			13
Class B Common Stock, $0.001 par value; 100,000,000
shares authorized; 24,000,000 shares issued;
20,292,917, 20,292,917 and 20,370,931 shares
20,292,263, 20,292,917 and 20,301,435 shares
outstanding, respectively			20			20			20				20			20			20
Additional paid-in capital			252,987			251,591			247,128				254,444			251,591			248,606
Retained earnings			423,374			410,473			420,841				430,605			410,473			433,324
Accumulated comprehensive income			20,871			19,088			17,121				15,960			19,088			23,844
Treasury stock, at cost (5,988,479, 5,808,279 and 5,651,779
Treasury stock, at cost (6,218,979, 5,808,279 and 5,655,279
shares, respectively)			(249,604	)		(241,567	)		(234,537	)			(258,956	)		(241,567	)		(234,706	)
Total GAMCO Investors, Inc. stockholders' equity			447,661			439,618			450,586				442,086			439,618			471,101
Noncontrolling interests			4,079			4,043			4,151				4,068			4,043			3,787
Total equity			451,740			443,661			454,737				446,154			443,661			474,888

Total liabilities and equity		$	724,625		$	707,809		$	705,275			$	703,488		$	707,809		$	730,024

See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES	GAMCO INVESTORS, INC. AND SUBSIDIARIES																										GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME	CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME																										CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME
UNAUDITED	UNAUDITED																										UNAUDITED
(In thousands)	(In thousands)																										(In thousands)
																																				��
For the three months ended March 31, 2010
For the six months ended June 30, 2010																											For the six months ended June 30, 2010
				GAMCO Investors, Inc. shareholders																										GAMCO Investors, Inc. shareholders
						Additional					Accumulated									Redeemable												Additional					Accumulated									Redeemable
		Noncontrolling		Common		Paid-in		Retained			Comprehensive			Treasury						Noncontrolling				Comprehensive				Noncontrolling		Common		Paid-in		Retained			Comprehensive			Treasury						Noncontrolling			Comprehensive
		Interests		Stock		Capital		Earnings			Income			Stock			Total			Interests				Income				Interests		Stock		Capital		Earnings			Income			Stock			Total			Interests			Income
Balance at December 31, 2009		$	4,043	$	33	$	251,591	$	410,473		$	19,088		$	(241,567	)	$	443,661		$	1,464		$	-				$	4,043	$	33	$	251,591	$	410,473		$	19,088		$	(241,567	)	$	443,661		$	1,464		$	-
Redemption of noncontrolling
interests			-		-		-		-			-			-			-			(475	)		-
Contributions of noncontrolling
interests			-		-		-		-			-			-			-			406				-
Redemptions of
noncontrolling interests																													-		-		-		-			-			-			-			(475	)		-
Contributions of
noncontrolling interests																													-		-		-		-			-			-			-			6,688			-
Net income			36		-		-		13,726			-			-			13,762			69				13,831				25		-		-		21,775			-			-			21,800			96			21,896
Net unrealized gains on
Net unrealized losses on
securities available for sale,
net of income tax ($1,067)			-		-		-		-			1,816			-			1,816			-				1,816
net of income tax benefit ($1,821)																													-		-		-		-			(3,101	)		-			(3,101	)		-			(3,101	)
Foreign currency translation			-		-		-		-			(33	)		-			(33	)		-				(33	)			-		-		-		-			(27	)		-			(27	)		-			(27	)
Dividends declared ($0.03 per
Dividends declared ($0.06 per
share)			-		-		-		(825	)		-			-			(825	)		-				-				-		-		-		(1,643	)		-			-			(1,643	)		-			-
Stock based compensation
expense			-		-		1,383		-			-			-			1,383			-				-				-		-		2,805		-			-			-			2,805			-			-
Exercise of stock options
including tax benefit			-		-		13		-			-			-			13			-				-				-		-		48		-			-			-			48			-			-
Purchase of treasury stock			-		-		-		-			-			(8,037	)		(8,037	)		-				-				-		-		-		-			-			(17,389	)		(17,389	)		-			-
Balance at March 31, 2010		$	4,079	$	33	$	252,987	$	423,374		$	20,871		$	(249,604	)	$	451,740		$	1,464			$	15,614
Balance at June 30, 2010																												$	4,068	$	33	$	254,444	$	430,605		$	15,960		$	(258,956	)	$	446,154		$	7,773		$	18,768

See accompanying notes.	See accompanying notes.																										See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES	GAMCO INVESTORS, INC. AND SUBSIDIARIES																												GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME	CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME																												CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME
UNAUDITED	UNAUDITED																												UNAUDITED
(In thousands)	(In thousands)																												(In thousands)

For the three months ended March 31, 2009
For the six months ended June 30, 2009																													For the six months ended June 30, 2009
					GAMCO Investors, Inc. shareholders																												GAMCO Investors, Inc. shareholders
							Additional						Accumulated									Redeemable													Additional						Accumulated								Redeemable
		Noncontrolling			Common		Paid-in			Retained			Comprehensive			Treasury						Noncontrolling				Comprehensive				Noncontrolling			Common		Paid-in			Retained			Comprehensive		Treasury						Noncontrolling			Comprehensive
		Interests			Stock		Capital			Earnings			Income			Stock			Total			Interests				Income				Interests			Stock		Capital			Earnings			Income		Stock			Total			Interests			Income
Balance at December 31, 2008		$	4,788		$	33	$	245,973		$	413,761		$	14,923		$	(234,537	)	$	444,941		$	4,201		$	-				$	4,788		$	33	$	245,973		$	413,761		$	14,923	$	(234,537	)	$	444,941		$	4,201		$	-
Purchase of subsidiary shares																													Purchase of subsidiary shares
from noncontrolling interest			(172	)		-		-			-			-			-			(172	)		-			-					(747	)		-		-			-			-		-			(747	)		-			-
Redemption of noncontrolling
interests			-			-		-			-			-			-			-			(1,024	)
Redemptions of
noncontrolling interests																															-			-		-			-			-		-			-			(2,963	)		-
Spin-off of subsidiary shares
to noncontrolling interests			(412	)		-		-			-			-			-			(412	)		-			-					(412	)		-		-			-			-		-			(412	)		-			-
Net income			(53	)		-		-			8,212			-			-			8,159			(9	)			8,150				158			-		-			21,528			-		-			21,686			88			21,774
Net unrealized gains on
securities available for sale,
net of income tax ($1,256)			-			-		-			-			2,205			-			2,205			-				2,205
net of income tax ($5,135)																															-			-		-			-			8,861		-			8,861			-			8,861
Foreign currency translation			-			-		-			-			(7	)		-			(7	)		-				(7	)			-			-		-			-			60		-			60			-			60
Dividends declared ($0.03 per
Dividends declared ($0.06 per																													Dividends declared ($0.06 per
share)			-			-		-			(1,132	)		-			-			(1,132	)		-				-				-			-		-			(1,965	)		-		-			(1,965	)		-			-
Income tax effect of transaction																													Income tax effect of transaction
with shareholders			-			-		(243	)		-			-			-			(243	)		-				-				-			-		(243	)		-			-		-			(243	)		-			-
Stock based compensation
expense			-			-		1,271			-			-			-			1,271			-				-				-			-		2,538			-			-		-			2,538			-			-
Exercise of stock options
including tax benefit			-			-		127			-			-			-			127			-				-				-			-		338			-			-		-			338			-			-
Balance at March 31, 2009		$	4,151		$	33	$	247,128		$	420,841		$	17,121		$	(234,537	)	$	454,737		$	3,168			$	10,348
Purchase of treasury stock																															-			-		-			-			-		(169	)		(169	)		-			-
Balance at June 30, 2009																														$	3,787		$	33	$	248,606		$	433,324		$	23,844	$	(234,706	)	$	474,888		$	1,326		$	30,695

See accompanying notes.	See accompanying notes.																												See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(In thousands)

Three Months Ended
March 31,
2010 2009
Operating activities
Net income $ 13,831 $ 8,150
Adjustments to reconcile net income to net cash provided by operating activities:
  Equity in net (gains) losses from partnerships and affiliates (2,352 ) (918 )
  Depreciation and amortization 171 165
  Stock based compensation expense 1,383 1,271
  Deferred income taxes 277 (947 )
  Tax benefit from exercise of stock options 5 34
  Foreign currency translation gain/(loss) (33 ) (7 )
  Fair value of donated securities 77 121
  (Gains) losses on sales of available for sale securities - (794 )
  Amortization of discount on debt 22 21
(Increase) decrease in assets:
  Investments in trading securities (17,980 ) 70,527
Investments in partnerships:
    Contributions to partnerships (11,129 ) (807 )
    Distributions from partnerships 5,391 6,189
  Receivable from brokers 4,704 3,549
  Income tax receivable and deferred tax assets - (281 )
  Investment advisory fees receivable 16,827 (109 )
  Other assets (6 ) 776
Increase (decrease) in liabilities:
  Payable to brokers 3,999 292
  Income taxes payable and deferred tax liabilities (2,320 ) -
  Compensation payable 8,035 (1,099 )
  Mandatorily redeemable noncontrolling interests 14 (8 )
  Accrued expenses and other liabilities (1,791 ) (2,498 )
Total adjustments 5,294 75,477
Net cash provided by operating activities 19,125 83,627

GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(In thousands)

	Six Months Ended
	June 30,
	2010			2009
Operating activities
Net income	$	21,896		$	21,774
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net gains from partnerships and affiliates		(1,037	)		(5,678	)
Depreciation and amortization		343			327
Stock based compensation expense		2,805			2,538
Deferred income taxes		2,934			1,674
Tax benefit from exercise of stock options		8			113
Foreign currency translation gain/(loss)		(27	)		60
Fair value of donated securities		(608	)		370
Gains on sales of available for sale securities		(13	)		(1,965	)
Amortization of discount on debt		297			42
(Increase) decrease in assets:
Investments in trading securities		(59,206	)		84,896
Investments in partnerships:
Contributions to partnerships		(15,807	)		(932	)
Distributions from partnerships		5,392			7,321
Receivable from brokers		(24,476	)		1,234
Investment advisory fees receivable		18,841			(855	)
Income tax receivable and deferred tax assets		-			7,824
Other assets		667			1,294
Increase (decrease) in liabilities:
Payable to brokers		2,956			3,057
Income taxes payable and deferred tax liabilities		(13,073	)		-
Compensation payable		5,313			(1,058	)
Mandatorily redeemable noncontrolling interests		10			122
Accrued expenses and other liabilities		2,972			(999	)
Total adjustments		(71,709	)		99,385
Net cash provided by operating activities		(49,813	)		121,159

GAMCO INVESTORS, INC. AND SUBSIDIARIES	GAMCO INVESTORS, INC. AND SUBSIDIARIES							GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS							CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED (continued)	UNAUDITED (continued)							UNAUDITED (continued)
(In thousands)	(In thousands)							(In thousands)

		Three Months Ended							Six Months Ended
		March 31,							June 30,
		2010			2009				2010			2009
Investing activities
Purchases of available for sale securities		$	(4	)	$	(5,419	)		$	(9	)	$	(6,174	)
Proceeds from sales of available for sale securities			686			2,175				3,320			5,340
Increase in restricted cash			(7	)		(15,043	)			(29	)		(35,059	)
Net cash provided by (used in) investing activities			675			(18,287	)			3,282			(35,893	)

Financing activities
Contributions related to consolidated investment partnerships and offshore funds			(69	)		(1,023	)			-			(2,963	)
Repayment of 6% Convertible note due August 14, 2011										(20,200	)		-
Proceeds from exercise of stock options			8			93				40			225
Dividends paid			(825	)		(1,742	)			(1,643	)		(2,574	)
Purchase of subsidiary shares from noncontrolling interests			-			(172	)
Contributions (Redemptions) of noncontrolling interests										6,213			(747	)
Purchase of treasury stock			(8,037	)		-				(17,389	)		(169	)
Net cash used in financing activities			(8,923	)		(2,844	)			(32,979	)		(6,228	)
Net increase in cash and cash equivalents			10,877			62,496
Effect of exchange rates on cash and cash equivalents			(48	)		(15	)			(18	)		118
Net (decrease) increase in cash and cash equivalents										(79,528	)		79,156
Cash and cash equivalents at beginning of period			338,270			331,174				338,270			331,174
Cash and cash equivalents at end of period		$	349,099		$	393,655			$	258,742		$	410,330
Supplemental disclosures of cash flow information:
Cash paid for interest		$	3,447		$	3,413			$	6,800		$	6,460
Cash paid for taxes		$	9,969		$	5,743			$	22,441		$	12,664
Non-cash acivity:
- On March 20, 2009, GAMCO Investors, Inc. distributed its shares of Teton Advisors, Inc. ($300) to its shareholders
which resulted in the deconsolidation of Teton, and decreases of approximately $911 of cash and cash equivalents,
$199 of net liabilities and $412 of noncontrolling interests.
- On March 20, 2009, GAMCO Investors, Inc. distributed its shares of Teton Advisors, Inc. ($300) to its shareholders which resulted in the deconsolidation of Teton, and decreases of								- On March 20, 2009, GAMCO Investors, Inc. distributed its shares of Teton Advisors, Inc. ($300) to its shareholders which resulted in the deconsolidation of Teton, and decreases of
approximately $911 of cash and cash equivalents, $199 of net liabilities and $412 of noncontrolling interests.								approximately $911 of cash and cash equivalents, $199 of net liabilities and $412 of noncontrolling interests.

See accompanying notes.												��

GAMCO INVESTORS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~March 31,~~June 30, 2010

(Unaudited)

A. Significant Accounting Policies

Basis of Presentation

Unless we have indicated otherwise, or the context otherwise requires, references in this report to “GAMCO Investors, Inc.,” “GAMCO,” “the Company,” “GBL,” “we,” “us” and “our” or similar terms are to GAMCO Investors, Inc., its predecessors and its subsidiaries.

The unaudited interim condensed consolidated financial statements of GAMCO included herein have been prepared in conformity with generally accepted accounting principles in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of financial position, results of operations and cash flows of GAMCO for the interim periods presented and are not necessarily indicative of a full year’s r esults.

The condensed consolidated financial statements include the accounts of GAMCO and its subsidiaries. Intercompany accounts and transactions are eliminated.

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009 from which the accompanying condensed consolidated financial statements were derived.

On March 20, 2009, the Company completed its spin-off of its ownership of Teton Advisors, Inc. (“Teton”) to its shareholders. The condensed consolidated financial statements include the results of Teton up to March 20, 2009.

Certain items previously reported have been reclassified to conform to the current period’s condensed consolidated financial statement presentation.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Recent Accounting Developments

In June 2009, the Financial Accounting Standards Board (“FASB”) issued guidance to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. This guidance is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2009 and shall be applied prospectively. Early adoption is prohibited. The Company adopted this guidance on January 1, 2010 with no impact to the condensed consolidated financial statements.

In June 2009, the FASB issued amended guidance on the accounting for variable interest entities (“VIEs”). The amendments will significantly affect the overall consolidation analysis, changing the approach taken by companies in identifying which entities are VIEs and in determining which party is the primary beneficiary. The guidance requires continuous assessment of the reporting entity’s involvement with such VIEs. The revised guidance also enhances the disclosure requirements for a reporting entity’s involvement with VIEs, irrespective of whether they qualify for deferral, as discussed below. The guidance is effective as of the beginning of the first fiscal year that begins after November 15, 2009 and early adoption is prohibited. In February 2010, th e FASB issued further guidance which provided a limited scope deferral for a reporting entity’s interest in an entity that meets all of the following conditions: (a) the entity has all the attributes of an investment company as defined under AICPA Audit and Accounting Guide, Investment Companies, or does not have all the attributes of an investment company but is an entity for which it is acceptable based on industry practice to apply measurement principles that are consistent with the AICPA Audit and Accounting Guide, Investment Companies, (b) the reporting entity does not have explicit or implicit obligations to fund any losses of the entity that could potentially be significant to the entity, and (c) the entity is not a securitization entity, asset-backed financing entity or an entity that was formerly considered a qualifying special-purpose entity. The reporting entity is required to perform a consolidation analysis for entities that qualify for the deferral in accordance with previously issued guidance on VIEs. The Company adopted this guidance on January 1, 2010 and has evaluated the deferral guidelines and determined that all significant entities that the Company is involved with that this guidance would potentially have impacted, qualify for the deferral, and therefore the guidance issued did not have a material impact on the condensed consolidated financial statements.

In January 2010, the FASB issued guidance to improve disclosures about fair value measurements. The guidance affects all entities that are required to make disclosures about recurring and nonrecurring fair value measurements. The guidance requires new disclosures regarding transfers in and out of Level 1 and 2 fair value measurements and activity related to Level 3 fair value measurements. In addition, the guidance clarifies existing fair value disclosure requirements related to the level of disaggregation of assets and liabilities and the valuation techniques and inputs used. This update is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measur ements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company adopted this guidance on January 1, 2010 without a material impact to the condensed consolidated financial statement disclosures.

In July 2010, the FASB issued guidance to improve disclosures about an entity’s allowance for credit losses and the credit quality of its financing receivables. The guidance affects all entities. The guidance requires the entity to disclose the nature of credit risk inherent in the entity’s portfolio of financing receivables, how that risk is analyzed and assessed in arriving at the allowance for credit losses and the changes and reasons for those changes in the allowance for credit losses. This update is effective for interim and annual reporting periods ending on or after December 15, 2010, except for the disclosures about activity that occurs during a reporting period which is effective for interim and annual reporting periods beginning on or after December 15, 2010. The applic ation of this guidance is not expected to be material to the condensed consolidated financial statements.

B. Investment in Securities

Investments in securities at ~~March 31,~~June 30, 2010 December 31, 2009 and ~~March 31,~~June 30, 2009 consisted of the following:

	March 31, 2010				December 31, 2009				March 31, 2009				June 30, 2010				December 31, 2009				June 30, 2009
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)												(In thousands)
Trading securities:
Government obligations	$	1,388	$	1,348	$	-	$	-	$	43,711	$	43,820	$	1,388	$	1,223	$	-	$	-	$	19,969	$	19,998
Common stocks		68,071		74,573		53,985		58,834		40,782		35,250		122,071		118,167		53,985		58,834		48,625		49,665
Mutual funds		1,194		1,379		1,194		1,295		3,132		2,328		1,194		1,229		1,194		1,295		1,115		972
Convertible bonds		637		749		-		-		-		-		1,123		1,161		-		-		-		-
Preferred stocks		-		11		-		15		-		14		1,783		1,685		-		15		-		14
Other investments		367		142		819		585		321		323		818		552		819		585		306		185
Total trading securities		71,657		78,202		55,998		60,729		87,946		81,735		128,377		124,017		55,998		60,729		70,015		70,834

Available for sale securities:
Common stocks		17,063		34,655		17,100		34,294		18,234		39,285		16,918		32,827		17,100		34,294		17,211		39,707
Mutual funds		48,773		64,144		49,656		62,380		50,167		44,594		46,156		56,235		49,656		62,380		49,839		51,587
Total available for sale securities		65,836		98,799		66,756		96,674		68,401		83,879		63,074		89,062		66,756		96,674		67,050		91,294

Total investments in securities	$	137,493	$	177,001	$	122,754	$	157,403	$	156,347	$	165,614	$	191,451	$	213,079	$	122,754	$	157,403	$	137,065	$	162,128

Securities sold, not yet purchased at ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009 consisted of the following:

	March 31, 2010				December 31, 2009				March 31, 2009				June 30, 2010				December 31, 2009				June 30, 2009
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)												(In thousands)
Common stocks	$	9,268	$	9,052	$	9,505	$	9,569	$	3,443	$	3,570	$	15,528	$	13,537	$	9,505	$	9,569	$	6,564	$	7,037
Other		10		11		-		-		-		-		224		115		-		-		-		-
Total securities sold, not yet purchased	$	9,278	$	9,063	$	9,505	$	9,569	$	3,443	$	3,570	$	15,752	$	13,652	$	9,505	$	9,569	$	6,564	$	7,037

Management determines the appropriate classification of debt and equity securities at the time of purchase and reevaluates such designation as of each balance sheet date. Investments in United States Treasury Bills and Notes with maturities of greater than three months at the time of purchase are classified as investments in securities and those with maturities of three months or less at time of purchase are classified as ~~cash and~~ cash equivalents. A substantial portion of investments in securities are held for resale in anticipation of short-term market movements and therefore are classified as trading securities. Trading securities are stated at fair value, with any unrealized gains or losses, reported in current period earnings. Available for sale (“AFS”) investments are stated at fair value, with any unrealized gains or losses, net of taxes, reported as a component of equity except for losses deemed to be other than temporary which are recorded as unrealized losses in the condensed consolidated statements of income. There were no impairment of AFS securities for the three or six month periods ended ~~March 31,~~June 30, 2010 and 2009.

The Company recognizes all derivatives as either assets or liabilities measured at fair value and are included in either investments in securities or securities sold, not yet purchased on the condensed consolidated statements of financial condition. From time to time, the Company will enter into hedging transactions to manage its exposure to foreign currencies and equity prices related to its proprietary investments. For the three months ended June 30, 2010 and 2009, the Company had derivative transactions in equity derivatives which resulted in net losses of $66,000 and $27,000, respect ively. For the six months ended June 30, 2010 and 2009, the Company had derivative transactions in equity derivatives which resulted in net losses of $118,000 and $27,000, respectively. At June 30, 2010 and December 31, 2009 we held derivative contracts on 21,000 shares and 122,000 shares, respectively, and the fair value was $201,000 and $246,000, respectively, and are included as other investments in the table above. There were no derivatives held at June 30, 2009. These transactions are not designated as hedges for accounting purposes, and changes in fair values of these derivatives are included in net gain (loss) from investments in the condensed consolidated statements of income. For the three months ended March 31, 2010 and 2009, the Company had derivative transactions in equity derivatives which resulted in net losses of $61,000 and $27,000, respectiv ely. The notional value of derivatives at March 31, 2010 and December 31, 2009 was $38,000 and $275,000, respectively and the fair value was $29,000 and $246,000, respectively. There were no derivatives held as of March 31, 2009.

At ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009, the fair value of common stock investments available for sale was ~~$34.7~~$32.8 million, $34.3 million and ~~$39.3~~$39.7 million, respectively. The total unrealized gains for common stock investments available for sale securities with unrealized gains was ~~$17.6~~$15.9 million, $17.2 million and ~~$21.1~~$22.5 million at ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009, respectively. There were no unrealized losses for common stock investments available for sale at ~~March 31,~~June 30, 2010, December 31, 2009 or ~~March 31,~~June 30, 2009. At ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009, the fair value of mutual fund investments available for sale with unrealized gains was ~~$62.2~~$56.2 million, $60.4 million and ~~$6.3~~$49.1 million, respectively. At ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009, the fair value of mutual fund investments available for sale with unrealized losses was ~~$1.9 million,~~$4,000, $2.0 million and ~~$38.3~~$2.5 million, respectively. The total unrealized gains for mutual fund investments available for sale securities with unrealized gains was ~~$15.4~~$10.1 million, $12.9 million and ~~$0.5~~$1.9 million at ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009, respectively, while the total unrealized losses for available for sale securities with unrealized losses was ~~$0.1 million,~~$1,000, $1,700 and ~~$6.1~~$0.2 million, respectively.

~~Increases in unrealized gains~~Unrealized changes to fair value, net of taxes, for the three months ended ~~March 31,~~June 30, 2010 and 2009 of ~~$1.8~~$4.9 million in losses and ~~$2.2~~$6.7 million in gains, respectively, and for the six months ended June 30, 2010 and 2009 of $3.1 million in losses and $8.9 million in gains, respectively, have been included in other comprehensive income, a component of equity, at ~~March 31,~~June 30, 2010 and ~~March 31,~~June 30, 2009, respectively. Proceeds from sales of investments available for sale were approximately ~~$0.7~~$2.6 million and ~~$2.2~~$3.1 million for the three month periods ended ~~March 31,~~June 30, 2010 and 2009, respectively. For the three months ended ~~March 31,~~June 30, 2010 and 2009, gross gains on the sale of investments available for sale amounted to ~~less than $1,000~~$13,000 and ~~$0.8~~$1.2 million, respectively; there were no gross losses on the sale of investments available for sale. 60;Proceeds from sales of investments available for sale were approximately $3.3 million and $5.3 million for the six month periods ended June 30, 2010 and 2009, respectively. For the six months ended June 30, 2010 and 2009, gross gains on the sale of investments available for sale amounted to $13,000 and $2.0 million, respectively; there were no gross losses on the sale of investments available for sale. The basis on which the cost of a security sold is determined is specific identification.

Investments classified as available for sale that are in an unrealized loss position for which other-than-temporary impairment has not been recognized consisted of the following:

	March 31, 2010							December 31, 2009							March 31, 2009							June 30, 2010							December 31, 2009							June 30, 2009
			Unrealized							Unrealized							Unrealized							Unrealized							Unrealized							Unrealized
	Cost		Losses			Fair Value		Cost		Losses			Fair Value		Cost		Losses			Fair Value		Cost		Losses			Fair Value		Cost		Losses			Fair Value		Cost		Losses			Fair Value
(in thousands)
Mutual Funds	$	2,002	$	(55	)	$	1,947	$	2,002	$	(2	)	$	2,000	$	44,402	$	(6,109	)	$	38,293	$	5	$	(1	)	$	4	$	2,002	$	(2	)	$	2,000	$	2,683	$	(194	)	$	2,489

At ~~March 31,~~June 30, 2010, there were ~~two~~three holdings in loss positions which were not deemed to be other-than-temporarily impaired due to the length of time that they had been in a loss position and because they passed scrutiny in our evaluation of issuer-specific and industry-specific considerations. In these specific instances, the investments at ~~March 31,~~June 30, 2010 were mutual funds with diversified holdings across multiple companies and in most cases across multiple industries. One holding was impaired for ~~four~~one month, one holding was impaired for five consecutive months and one holding was impaired for twelve consecutive months. The fair value of these holdings at ~~March 31,~~June 30, 2010 was ~~$1.9 million.~~$4,000.

At December 31, 2009, there were five holdings in loss positions which were not deemed to be other-than-temporarily impaired due to the length of time that they had been in a loss position and because they passed scrutiny in our evaluation of issuer-specific and industry-specific considerations. In these specific instances, the investments at December 31, 2009 were mutual funds with diversified holdings across multiple companies and in most cases across multiple industries. One holding was impaired for one month, one holding was impaired for nine consecutive months and three holdings were impaired for fourteen consecutive months. The fair value of these holdings at December 31, 2009 was $2.0 million.

At ~~March 31,~~June 30, 2009, there were ~~sixty-four~~fourteen holdings in loss positions which were not deemed to be other-than-temporarily impaired due to the length of time that they had been in a loss position and because they passed scrutiny in our evaluation of issuer-specific and industry-specific considerations. In these specific instances, the investments at ~~March 31,~~June 30, 2009 were mutual funds with diversified holdings across multiple companies and in most cases across multiple industries. ~~Fifty-five holdings were~~One holding was impaired for three consecutive months, one holding was impaired for four consecutive months, one holding was impaired for five consecutive months ~~two~~and eleven holdings were impaired for ~~six consecutive months and six holdings were impaired for seven~~eight consecutive months. The fair value of these holdings at ~~March 31,~~June 30, 2009 was ~~$38.3~~$2.5 million.

C. Investments in Partnerships

The Company is general partner or co-general partner of various sponsored limited partnerships and the investment manager of various sponsored offshore funds whose underlying assets consist primarily of marketable securities (the “affiliated entities”). We also have investments in ~~those~~ unaffiliated partnerships, offshore funds and other entities. Certain of the affiliated entities are consolidated, generally because a majority of the equity is owned by the Company. Other investment partnerships for which we serve as the general partner but have only a minority ownership interest are not consolidated because the limited partners have substantive rights to replace the Company as general partner. Our balance sheet caption “investments in partnerships” includes those investments, in both affiliated and unaffiliated entities, which the Company accounts for under the equity method of ~~accounting.~~accounting and certain investments in consolidated feeder funds that the company accounts for at fair value, as described below. The Company reflects the equity in earnings of these equity method investees and the change in fair value of the consolidated feeder funds under the caption net gain/(loss) from investments on the condensed consolidated statements of income.

We also have sponsored a number of investment vehicles where we are the investment manager in which ~~aside from one instance,~~ we do not have an equity investment. These vehicles are considered VIEs and we are not the primary beneficiary because we do not absorb a majority of the entities’ expected losses or expected returns. The Company has not provided any financial or other support to these entities. The total assets of these entities at ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009 were ~~$10.5~~$10.8 million, $10.4 million and ~~$9.1~~$9.3 million, respectively. Our maximum exposure to loss as a result of our involvement with the VIEs is limited to ~~our investment~~the deferred carried interest that we have in ~~the respective VIEs which was only the case for~~ one of ~~these.~~the VIEs. On ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009, we had ~~an investment~~a deferred carried interest in one of the VIE offshore funds of approximately ~~$287,000, $284,000~~$288,000, $285,000 and $264,000, respectively, and was included in investments in partnerships on the condensed consolidated statements of financial condition. Additionally, as the general partner or investment manager to these VIEs the Company earns fees in relation to these roles, which given a decline in AUMs for the VIEs would result in lower fee revenues earned by the Company which would be reflected in the condensed consolidated statement of income, condensed consolidated statement of financial condition and condensed consolidated statement of cash flows.

At ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009, and for the ~~three~~six months ended ~~March 31,~~June 30, 2010 and ~~March 31,~~June 30, 2009, the Company consolidated two limited partnerships and one offshore fund (the “consolidated feeder funds”), two limited partnerships and one offshore fund, three limited partnerships and one offshore fund, two limited partnerships and one offshore ~~funds,~~fund, and three limited partnerships and one offshore fund, respectively, that owned 100% of their offshore master funds. The Company retained the specialized accounting of the consolidated feeder funds in the Company’s consolidated financial statements. Included in the investment in partnerships on the Company’s consolidated statement of financial condition as of ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009, is ~~$26.2~~$25.6 million $25.1 million, and ~~$21.4~~$22.5 million, respectively, which represents the consolidated feeder fund’s proportionate investment in the master funds carried at fair value.

D. Fair Value

All of the instruments within cash and cash equivalents, investments in securities and securities sold, not yet purchased are measured at fair value. Certain instruments within investments in partnerships are also measured at fair value as described in detail below.

The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with the FASB’s guidance on fair value measurement. The levels of the fair value hierarchy and their applicability to the Company are described below:

-	Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date. Level 1 assets include cash equivalents, government obligations, listed mutual funds and equities.
-	Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities that are not active and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly-quoted intervals. Assets that generally are included in this category may include certain limited partnership interests in hedge funds in which the valuations for substantially all of the investments within the fund are based upon Level 1 or Level 2 inputs and over the counter derivatives that have inputs to the valuations that can be genera lly corroborated by observable market data.
-	Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Assets included in this category generally include equities and direct private equity investments held within consolidated partnerships.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Investments are transferred into or out of any level at their beginning period values.

The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3.

~~Many of our securities have bid and ask prices that can be observed in the marketplace.~~ In the absence of a closing price, an average of the bid and ask price is used. Bid prices reflect the highest price that the market is willing to pay for an asset. Ask prices represent the lowest price that the market is willing to accept for an asset.

Cash equivalents – ~~Cash is maintained in demand deposit accounts at major United States banking institutions.~~ Cash equivalents primarily consist of an affiliated money market mutual fund which is invested solely in U.S. Treasuries. U.S. Treasury Bills and Notes with maturities of three months or less at the time of purchase are considered cash equivalents. Cash equivalents are valued using quoted market prices.

Investments in securities and securities sold, not yet purchased – Investments in securities and securities sold, not yet purchased are generally valued based on quoted prices from an exchange. To the extent these securities are actively traded, valuation adjustments are not applied, and they are categorized in Level 1 of the fair value hierarchy. Securities categorized in Level 2 investments are valued using other observable inputs. Nonpublic and infrequently traded investments are included in Level 3 of the fair value hierarchy because significant inputs to measure fair value are unobservable.~~Securities categorized in Level 2 investments are valued using other observable inputs.~~

Investments in Partnerships – The Company’s investments include limited partner investments in ~~hedge~~consolidated feeder funds. Initially, the transaction price is generally considered by the Company as the exit price and is the Company’s best estimate of fair value. After initial recognition, in determining the fair value of internally managed funds, theThe Company considers the net asset value of the fund to be the best estimate of fair value. Investments in hedge funds that are redeemable at the measurement date or in the near future, are categorized in Level 2 of the fair value hierarchy. These funds primarily invest in long and short investments in debt and equity securities that are traded in public and over-the-counter exchanges in the United States and are classified as level 1 assets or liabilities in the funds’ financial statements. We may redeem our investments in these funds monthly with 30 days’ notice.

The following table presents information about the Company’s assets and liabilities by major categories measured at fair value on a recurring basis as of ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

Assets and Liabilities Measured at Fair Value on a Recurring Basis as of ~~March 31,~~June 30, 2010 (in thousands)

Quoted Prices in Active Significant Other Significant Balance as of
Markets for Identical Observable Unobservable March 31,
Assets Assets (Level 1) Inputs (Level 2) Inputs (Level 3) 2010
Cash equivalents $ 410,798 $ - $ - $ 410,798
Investments in securities:
�� AFS - Common stocks 34,655 - - 34,655
  AFS - Mutual funds 64,144 - - 64,144
  Trading - Gov't obligations 1,348 - - 1,348
  Trading - Common stocks 74,227 113 233 74,573
  Trading - Mutual funds 1,379 - - 1,379
  Trading - Convertible bonds 749 - - 749
  Trading - Preferred stocks - - 11 11
  Trading - Investments in
    partnerships - 26,202 - 26,202
  Trading - Other 12 40 90 142
Total investments in securities 176,514 26,355 334 203,203
Total assets at fair value $ 587,312 $ 26,355 $ 334 $ 614,001
Liabilities
  Trading - Common stocks $ 9,052 $ - $ - $ 9,052
  Trading - Other - 11 - 11
Securities sold, not yet purchased $ 9,052 $ 11 $ - $ 9,063

~~There were no significant transfers between any levels during the three months ended March 31, 2010. Transfers are based on the value at the beginning of the period.~~

	Quoted Prices in Active		Significant Other		Significant		Balance as of
	Markets for Identical		Observable		Unobservable		June 30,
Assets	Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)		2010
Cash equivalents	$	320,575	$	-	$	-	$	320,575
Investments in securities:
AFS - Common stocks		32,827		-		-		32,827
AFS - Mutual funds		56,235		-		-		56,235
Trading - Gov't obligations		1,223		-		-		1,223
Trading - Common stocks		117,617		278		272		118,167
Trading - Mutual funds		1,229		-		-		1,229
Trading - Convertible bonds		1,161		-		-		1,161
Trading - Preferred stocks		1,674		-		11		1,685
Trading - Investments in partnerships		-		25,553		-		25,553
Trading - Other		143		316		93		552
Total investments in securities		212,109		26,147		376		238,632
Total assets at fair value	$	532,684	$	26,147	$	376	$	559,207
Liabilities
Trading - Common stocks	$	13,537	$	-	$	-	$	13,537
Trading - Other		-		115		-		115
Securities sold, not yet purchased	$	13,537	$	115	$	-	$	13,652

Assets and Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2009 (in thousands)

Quoted Prices in Active Significant Other Significant Balance as of
Markets for Identical Observable Unobservable December 31,
Assets Assets (Level 1) Inputs (Level 2) Inputs (Level 3) 2009
Cash equivalents $ 400,111 $ - $ - $ 400,111
Investments in securities:
  AFS - Common stocks 34,294 - - 34,294
  AFS - Mutual funds 62,380 - - 62,380
  Trading - Common stocks 58,521 108 205 58,834
  Trading - Mutual funds 1,295 - - 1,295
  Trading - Preferred stocks - - 15 15
  Trading - Investments in
    partnerships - 25,092 - 25,092
  Trading - Other 249 246 90 585
Total investments in securities 156,739 25,446 310 182,495
Total assets at fair value $ 556,850 $ 25,446 $ 310 $ 582,606
Liabilities
  Trading - Common stocks $ 9,569 $ - $ - $ 9,569
Securities sold, not yet purchased $ 9,569 $ - $ - $ 9,569

	Quoted Prices in Active		Significant Other		Significant		Balance as of
	Markets for Identical		Observable		Unobservable		December 31,
Assets	Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)		2009
Cash equivalents	$	400,111	$	-	$	-	$	400,111
Investments in securities:
AFS - Common stocks		34,294		-		-		34,294
AFS - Mutual funds		62,380		-		-		62,380
Trading - Common stocks		58,521		108		205		58,834
Trading - Mutual funds		1,295		-		-		1,295
Trading - Preferred stocks		-		-		15		15
Trading - Investments in partnerships		-		25,092		-		25,092
Trading - Other		249		246		90		585
Total investments in securities		156,739		25,446		310		182,495
Total assets at fair value	$	556,850	$	25,446	$	310	$	582,606
Liabilities
Trading - Common stocks	$	9,569	$	-	$	-	$	9,569
Securities sold, not yet purchased	$	9,569	$	-	$	-	$	9,569

Assets and Liabilities Measured at Fair Value on a Recurring Basis as of ~~March 31,~~June 30, 2009 (in thousands)

	Quoted Prices in Active		Significant Other		Significant		Balance as of
	Markets for Identical		Observable		Unobservable		June 30,
Assets	Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)		2009
Cash equivalents	$	452,138	$	-	$	-	$	452,138
Investments in securities:
AFS - Common stocks		39,707		-		-		39,707
AFS - Mutual funds		51,587		-		-		51,587
Trading - U.S. Gov't obligations		19,998		-		-		19,998
Trading - Common stocks		47,772		1,651		242		49,665
Trading - Mutual funds		972		-		-		972
Trading - Preferred stocks		-		-		14		14
Trading - Investments in partnerships		-		22,543		-		22,543
Trading - Other		13		-		172		185
Total investments in securities		160,049		24,194		428		184,671
Total assets at fair value	$	612,187	$	24,194	$	428	$	636,809
Liabilities
Trading - common stocks	$	7,037	$	-	$	-	$	7,037
Securities sold, not yet purchased	$	7,037	$	-	$	-	$	7,037

Quoted Prices in Active Significant Other Significant Balance as of
Markets for Identical Observable Unobservable March 31,
Assets Assets (Level 1) Inputs (Level 2) Inputs (Level 3) 2009
Cash equivalents $ 393,859 $ - $ - $ 393,859
Investments in securities:
  AFS - Common stocks 39,285 - - 39,285
  AFS - Mutual funds 44,594 - - 44,594
  Trading - U.S. Gov't obligations 65,815 - - 65,815
  Trading - Common stocks 33,012 2,086 152 35,250
  Trading - Mutual funds 2,3298 - - 2,328
  Trading - Preferred stocks - - 14 14
  Trading - Investments in
    partnerships - 21,366 - 21,366
  Trading - Other 22 - 301 323
Total investments in securities 185,056 23,452 467 208,975
Total assets at fair value $ 578,915 $ 23,452 $ 467 $ 602,834
Liabilities
  Trading - common stocks $ 3,570 $ - $ - $ 3,570
Securities sold, not yet purchased $ 3,570 $ - $ - $ 3,570

The following tables present additional information about assets and liabilities by major categories measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended ~~March 31,~~June 30, 2010 (in thousands)

								Total																				Total
								Unrealized																				Unrealized
								Gains or		Total																		Gains or		Total
			Total Realized and					(Losses)		Realized						Net							Total Realized and					(Losses)		Realized					Net
	December		Unrealized Gains or					Included in		and						Transfers					March		Unrealized Gains or					Included in		and					Transfers
	31, 2009		(Losses) in Income					Other		Unrealized			Purchases			In and/or					31, 2010		(Losses) in Income					Other		Unrealized			Purchases		In and/or
	Beginning					AFS		Comprehensive		Gains or			and Sales,			(Out) of		Ending			Beginning					AFS		Comprehensive		Gains or			and Sales,		(Out) of		Ending
Asset	Balance		Trading			Investments		Income		(Losses)			net			Level 3		Balance			Balance		Trading			Investments		Income		(Losses)			net		Level 3		Balance
Financial
instruments owned:																				instruments owned:
Trading - Common																				Trading - Common
stocks	$	205	$	37		$	-	$	-	$	37		$	(32	)	$	23	$	233		$	233	$	(8	)	$	-	$	-	$	(8	)	$	-	$	47	$	272
Trading - Preferred																				Trading - Preferred
stocks		15		(4	)		-		-		(4	)		-			-		11			11		-			-		-		-			-		-		11
Trading - Other		90		-			-		-		-			-			-		90			90		3			-		-		3			-		-		93
Total	$	310	$	33		$	-	$	-	$	33		$	(32	)	$	23	$	334		$	334	$	(5	)	$	-	$	-	$	(5	)	$	-	$	47	$	376

There were no transfers between Level 1 and Level 2 as well as between Level 1 and Level 3 holdings during the three months ended June 30, 2010. Transfers are based on the value at the beginning of the period. During the three months ended ~~March 31,~~June 30, 2010, the Company reclassed approximately ~~$23,000~~$47,000 of investments from Level 12 to Level 3. The reclassifications were due to decreased availability of market price quotations and were based on the values at the beginning of the period in which the reclass occurred.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended June 30, 2010 (in thousands)

								Total
								Unrealized
								Gains or		Total
			Total Realized and					(Losses)		Realized						Net
	December		Unrealized Gains or					Included in		and						Transfers
	31, 2009		(Losses) in Income					Other		Unrealized			Purchases			In and/or
	Beginning					AFS		Comprehensive		Gains or			and Sales,			(Out) of		Ending
Asset	Balance		Trading			Investments		Income		(Losses)			net			Level 3		Balance
Financial
instruments owned:
Trading - Common
stocks	$	205	$	29		$	-	$	-	$	29		$	(32	)	$	70	$	272
Trading - Preferred
stocks		15		(4	)		-		-		(4	)		-			-		11
Trading - Other		90		3			-		-		3			-			-		93
Total	$	310	$	28		$	-	$	-	$	28		$	(32	)	$	70	$	376

There were no transfers between Level 1 and Level 2 holdings during the six months ended June 30, 2010. During the six months ended June 30, 2010, the Company reclassed approximately $23,000 of investments from Level 1 to Level 3 and $47,000 from Level 2 to Level 3. The reclassifications were due to decreased availability of market price quotations and were based on the values at the beginning of the period in which the reclass occurred.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended ~~March 31,~~June 30, 2009 (in thousands)

								Total																				Total
								Unrealized																				Unrealized
								Gains or		Total																		Gains or		Total
			Total Realized and					(Losses)		Realized						Net							Total Realized and					(Losses)		Realized					Net
	December		Unrealized Gains or					Included in		and						Transfers					March		Unrealized Gains or					Included in		and					Transfers
	31, 2008		(Losses) in Income					Other		Unrealized			Purchases			In and/or					31, 2009		(Losses) in Income					Other		Unrealized			Purchases		In and/or
	Beginning					AFS		Comprehensive		Gains or			and Sales,			(Out) of			Ending		Beginning					AFS		Comprehensive		Gains or			and Sales,		(Out) of		Ending
Asset	Balance		Trading			Investments		Income		(Losses)			net			Level 3			Balance		Balance		Trading			Investments		Income		(Losses)			net		Level 3		Balance
Financial
instruments owned:
Trading - Common
stocks	$	1,115	$	29		$	-	$	-	$	29		$	(29	)	$	(963	)	$	152	$	152	$	4		$	-	$	-	$	4		$	-	$	86	$	242
Trading - Preferred
stocks		95		(81	)		-		-		(81	)		-			-			14		14		-			-		-		-			-		-		14
Trading - Other		331		(30	)		-		-		(30	)		-			-			301		301		(129	)		-		-		(129	)		-		-		172
Total	$	1,541	$	(82	)	$	-	$	-	$	(82	)	$	(29	)	$	(963	)	$	467	$	467	$	(125	)	$	-	$	-	$	(125	)	$	-	$	86	$	428

During the ~~quarter~~three months ended ~~March 31,~~June 30, 2009, the Company reclassified approximately ~~$1.0~~$86,000 of investments from Level 2 to Level 3. The reclassifications were due to a reduction in market price quotations for these investments and were based on the values at the beginning of the period in which the reclass occurred.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended June 30, 2009 (in thousands)

								Total
								Unrealized
								Gains or		Total
			Total Realized and					(Losses)		Realized						Net
	December		Unrealized Gains or					Included in		and						Transfers
	31, 2008		(Losses) in Income					Other		Unrealized			Purchases			In and/or
	Beginning					AFS		Comprehensive		Gains or			and Sales,			(Out) of			Ending
Asset	Balance		Trading			Investments		Income		(Losses)			net			Level 3			Balance
Financial
instruments owned:
Trading - Common
stocks	$	1,115	$	5		$	-	$	-	$	5		$	(1	)	$	(877	)	$	242
Trading - Preferred
stocks		95		(81	)		-		-		(81	)		-			-			14
Trading - Other		331		(131	)		-		-		(131	)		(28	)		-			172
Total	$	1,541	$	(207	)	$	-	$	-	$	(207	)	$	(29	)	$	(877	)	$	428

During the six months ended June 30, 2009, the Company reclassified approximately $0.9 million of investments from Level 3 to Level 2. The reclassifications were due to increased availability of market price quotations and were based on the values at the beginning of the period in which the reclass occurred.

Unrealized Level 3 gains and/or losses included within net ~~gain~~ gain/(loss) from investments in the condensed consolidated statement of income for the three months ended ~~March 31,~~June 30, 2010 and 2009 were approximately ~~$33,000~~$5,000 and $0.1 million of losses, respectively, and for the six months ended June 30, 2010 and 2009 were approximately $28,000 of gains and ~~$82,000~~$0.2 million of losses, respectively, for those Level 3 securities held at ~~March 31,~~June 30, 2010 and 2009, respectively.

E. Debt

On May 28, 2010, the Company redeemed $20 million of the $40 million 6% convertible note due August 2011 at 101% of par value plus accrued but unpaid interest. The redemption was accounted for as an extinguishment and resulted in a loss of approximately $256,000 which was included in interest expense in the condensed consolidated statements of income.

The fair value of the Company’s debt is estimated based on either quoted market prices for the same or similar issues or using market standard models depending on the characteristics of the debt issuance. Inputs in these standard models include credit rating, maturity and interest ~~rate~~rate. A standard option pricing model is used to calculate the fair value of the conversion option imbedded in the convertible debt with significant inputs including volatility of GBL stock, interest rates, dividend yield and ~~size of comparable issues.~~maturity. At ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009, the fair value of the Company’s debt is estimated to be ~~$208.5~~$191.7 million, ~~$204.2~~$20 4.2 million and ~~$175.7~~$197.9 million, respectively. The carrying value of the Company debt at ~~March 31,~~June 30, 2010, December 31, 2009 and ~~March 31,~~June 30, 2009 is ~~$198.9~~$178.9 million, $198.9 million and $198.8 million, respectively.

F. Income Taxes

The effective tax rate for the three months ended ~~March 31,~~June 30, 2010 was ~~37.5%~~35.3% compared to the prior year quarter’s effective rate of ~~32.9%~~34.4%.

The effective tax rate for the six months ended June 30, 2010 was 36.7% compared to the prior year quarter’s effective rate of 33.8%. The prior year’s rate includes a reduction to certain income tax reserves.

1718

G. Earnings Per Share

The computations of basic and diluted net income per share are as follows:

	Three		Three		Three		Three		Six		Six
	Months		Months		Months		Months		Months		Months
	Ended		Ended		Ended		Ended		Ended		Ended
	March 31,		March 31,		June 30,		June 30,		June 30,		June 30,
(in thousands, except per share amounts)	2010		2009		2010		2009		2010		2009
Basic:
Net income attributable to GAMCO Investors, Inc.'s shareholders	$	13,726	$	8,212	$	8,049	$	13,316	$	21,775	$	21,528
Weighted average shares outstanding		27,184		27,379		26,979		27,384		27,081		27,381
Basic net income attributable to GAMCO Investors, Inc.'s
shareholders per share	$	0.50	$	0.30

Basic net income attributable to GAMCO Investors, Inc.'s shareholders per share					$	0.30	$	0.49	$	0.80	$	0.79

Diluted:
Net income attributable to GAMCO Investors, Inc.'s shareholders	$	13,726	$	8,212	$	8,049	$	13,316	$	21,775	$	21,528
Add interest expense on certain convertible notes, net of
management fee and taxes		339		-
Total	$	14,065	$	8,212

Weighted average share outstanding		27,184		27,379		26,979		27,384		27,081		27,381
Dilutive stock options and restricted stock awards		209		7		240		124		225		65
Assumed conversion of certain convertible notes		755		-
Total		28,148		27,386		27,219		27,508		27,306		27,446
Diluted net income attributable to GAMCO Investors, Inc.'s
shareholders per share	$	0.50	$	0.30

Diluted net income attributable to GAMCO Investors, Inc.'s shareholders per share					$	0.30	$	0.48	$	0.80	$	0.78

H. Stockholders’ Equity

Shares outstanding were ~~27.4~~27.3 million on ~~March 31,~~June 30, 2010, 27.6 million on December 31, 2009, and ~~27.8~~27.7 million shares on ~~March 31,~~June 30, 2009.

On February 9, 2010, our Board of Directors declared a quarterly dividend of $0.03 per share to all of its Class A and Class B shareholders, payable on March 30, 2010 to shareholders of record on March 16, 2010. On May 4, 2010, our Board of Directors declared a quarterly dividend of $0.03 per share to all of its Class A and Class B shareholders, payable on June 29, 2010 to shareholders of record on June 15, 2010.

On February 3, 2009, our Board of Directors declared a quarterly dividend of $0.03 per share to all of its Class A and Class B shareholders, payable on March 31, 2009 to shareholders of record on March 17, 2009. On May 5, 2009, our Board of Directors declared a quarterly dividend of $0.03 per share to all of its Class A and Class B shareholders, payable on June 30, 2009 to shareholders of record on June 16, 2009.

Voting Rights

The holders of Class A Common Stock and Class B Common Stock have identical rights except that (i) holders of Class A Common Stock are entitled to one vote per share, while holders of Class B Common Stock are entitled to ten votes per share on all matters to be voted on by shareholders in general, and (ii) holders of Class A Common Stock are not eligible to vote on matters relating exclusively to Class B Common Stock and vice versa.

Stock Award and Incentive Plan

The Company maintains two Plans approved by the shareholders, which are designed to provide incentives which will attract and retain individuals key to the success of GAMCO through direct or indirect ownership of our common stock. Benefits under the Plans may be granted in any one or a combination of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents and other stock or cash based awards. A maximum of 1,500,000 shares of Class A Common Stock have been reserved for issuance under each of the Plans by a committee of the Board of Directors (the “Compensation Committee”) responsible for administering the plans. Under the Plans, the Compensation Committee may grant either incentive or nonqualified stock options with a term not to exceed ten years from the grant date and at an exercise price that the committee may determine and restricted stock awards (“RSAs”). Options granted under the Plans vest 75% after three years and 100% after four years from the date of grant and expire after ten years.

1819

On February 9, 2010, the Company approved the granting of 88,800 RSA shares at a grant date fair value of $40.64 per share to be issued on June 1, 2010. As of ~~March 31,~~June 30, 2010, there were ~~359,100~~440,900 RSA shares outstanding that were previously issued at an average grant price of ~~$60.78.~~$56.98. All grants of the RSAs were recommended by the Company's Chairman, who did not receive an RSA, and approved by the Compensation Committee. This expense will be recognized over the vesting period for these awards which is 30% over three years from the date of grant and 70% over five years from the date of grant. During the vesting period, dividends to RSA holders are held for them until the RSA vesting dates and are forfeited if the grantee is no longer employed by the Company on the vesting dates. ~~60;~~ 0;Dividends declared on these RSAs are charged to retained earnings on the declaration date.

For the three months ended ~~March 31,~~June 30, 2010 and 2009, we recognized stock-based compensation expense of $1.4 million and $1.3 million, respectively. For the six months ended June 30, 2010 and 2009, we recognized stock-based compensation expense of $2.8 million and $2.5 million, respectively. Stock-based compensation expense for RSAs and options for the years ended December 31, 2009 through December 31, 2015 (based on awards currently issued or granted) is as follows ($ in thousands):

2009 2010 2011 2012 2013 2014 2015
Q1 $ 1,271 $ 1,382 $ 926 $ 890 $ 203 $ 95 $ 95
Q2 1,267 1,416 922 889 182 95 63
Q3 1,283 1,416 906 889 117 95 -
Q4 1,264 1,253 898 660 107 95 -
Full Year $ 5,085 $ 5,467 $ 3,652 $ 3,328 $ 609 $ 380 $ 158

		2009		2010		2011		2012		2013		2014		2015
	Q1	$	1,271	$	1,382	$	926	$	890	$	203	$	95	$	95
	Q2		1,267		1,422		922		889		182		95		63
	Q3		1,283		1,416		906		889		117		95		-
	Q4		1,264		1,253		898		660		107		95		-
Full Year		$	5,085	$	5,473	$	3,652	$	3,328	$	609	$	380	$	158

The total compensation costs related to non-vested restricted stock awards and options not yet recognized is approximately ~~$12.2~~$10.8 million. For the three months ended ~~March 31,~~June 30, 2010 and 2009, proceeds from the exercise of ~~500~~1,100 stock options and ~~5,325~~6,850 stock options were ~~$8,000~~$32,000 and ~~$93,000,~~$132,000, respectively, resulting in a tax benefit to GAMCO of ~~$5,000~~$3,000 and ~~$34,000,~~$78,000, respectively. For the six months ended June 30, 2010 and 2009, proceeds from the exercise of 1,600 stock options and 12,175 stock options were $40,000 and $225,000, respectively, resulting in a tax benefit to GAMCO of $8,000 and $112,000, respectively.

Stock Repurchase Program

In March 1999, GAMCO's Board of Directors established the Stock Repurchase Program to grant the authority to repurchase shares of our Class A Common Stock. On May 4, 2010, our Board of Directors authorized an incremental 500,000 shares to be added to the current buyback authorization. For the three months ended ~~March 31,~~June 30, 2010 and 2009, the Company repurchased ~~180,200~~230,500 shares and 3,500 shares, respectively, at an average price per share of ~~$44.58. The Company did not repurchase any shares during~~$40.56 and $48.38, respectively. For the ~~three~~six months ended ~~March 31, 2009.~~June 30, 2010 and 2009, the Company repurchased 410,700 shares and 3,500 shares, respectively, at an average price per share of $42.33 and $48.38, respectively. From the inception of the program through ~~March 31,~~June 30, 2010, ~~6,389,283~~6,619,783 shares have been repurchased at an average price of ~~$40.04~~$40.05 per share. & #160;At ~~March 31,~~June 30, 2010, the total shares available under the program able to be repurchased were ~~528,136.~~797,636.

I. Goodwill and Identifiable Intangible Assets

The Company assesses the recoverability of goodwill and other intangible assets at least annually, or more often should events warrant, using a present value cash flow method. There were no indicators of impairment for the three and six months ended June 30, 2010 or 2009 and as such there was no impairment charge ~~recorded for the three months ended March 31, 2010 or 2009.~~recorded. At ~~March 31,~~June 30, 2010, $3.5 million of goodwill is reflected within other assets on our condensed consolidated statements of financial condition related to our 93%-owned subsidiary, Gabelli Securities, Inc.

On March 10, 2008, the Enterprise Mergers and Acquisitions Fund's (the "Fund") Board of Directors, subsequent to obtaining shareholder approval, approved the assignment of the advisory contract to Gabelli Funds, LLC as the investment adviser to the Fund. GAMCO Asset Management Inc. had been the sub-adviser to the Fund. On July 8, 2008, the Fund was renamed the Gabelli Enterprise Merger and Acquisitions Fund. As a result of becoming the adviser to the rebranded Gabelli Enterprise Mergers and Acquisitions Fund the Company maintains an indefinite-lived identifiable intangible asset within other assets on the condensed consolidated statements of financial condition of approximately $1.9 million at both ~~March 31,~~June 30, 2010 and 2009. The investment advisory agreement is subject to annual ~~renewal~~r enewal by the Fund's Board of Directors, which the Company expects will be renewed, and the Company does not expect to incur additional expense as a result, which is consistent with other investment advisory agreements entered into by the Company. The advisory contract is next up for renewal in February 2011.

J. Commitments and Contingencies

From time to time, the Company is named in legal actions. These actions may seek substantial compensatory as well as punitive damages. The Company is also subject to governmental or regulatory examinations or investigations. The examinations or investigations could result in adverse outcomes including fines, injunctions or other relief. The Company cannot predict the ultimate outcome of such matters. The condensed consolidated financial statements include the necessary provision for losses that are deemed to be probable and estimable. In the opinion of management, the resolution of such claims will not be material to the financial condition of the Company.

We indemnify the clearing brokers for our affiliated broker-dealer for losses they may sustain from the customer accounts that trade on margin introduced by our broker-dealer subsidiary. At ~~March 31,~~June 30, 2010, the total amount of customer balances subject to indemnification (i.e., unsecured margin debits) was immaterial. The Company also has entered into arrangements with various other third parties many of which provide for indemnification of the third parties against losses, costs, claims and liabilities arising from the performance of our obligations under the agreements. The Company has had no claims or payments pursuant to these or prior agreements, and we believe the likelihood of a claim being made is remote. Management cannot estimate any potential maximum exposure due both to the remoteness of any potential claims and the fact that items that would be included within any such calculated claim would be beyond the control of management. Consequently, no accrual has been made in the condensed consolidated financial statements.

K. Subsequent Events

From ~~April~~July 1, 2010 to ~~May 6,~~August 5, 2010, the Company repurchased ~~39,100~~2,300 shares at ~~$45.88~~$35.35 per share.

~~On April 20, 2010,~~This brings the ~~Company gave notice~~remaining authorization under the stock repurchase program to ~~the holder of the 6% convertible note due in~~795,336 shares at August ~~2011 that on May 31, 2010, the Company will redeem $20 million of the $40 million currently outstanding at 101% of par.~~5, 2010.

On ~~May 4,~~August 3, 2010, our Board of Directors declared a quarterly dividend of $0.03 per share to all of its Class A and Class B shareholders, payable on ~~June 29,~~September 28, 2010 to shareholders of record on ~~June 15,~~September 14, 2010.

On May 4, 2010, our Board of Directors authorized that an additional 500,000 shares be added to our current buyback authorization. This brings the remaining authorization under the stock repurchase program to 989,036 shares at May 6, 2010.

2021

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (INCLUDING QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK)

Overview

GAMCO through the Gabelli brand, well known for its Private Market Value (PMV) with a CatalystTM investment approach, is a widely-recognized provider of investment advisory services to mutual funds, institutional and high net worth investors, and investment partnerships, principally in the United States. Through Gabelli & Company, Inc., we provide institutional research and brokerage services to institutional clients and investment partnerships and mutual fund distribution. We generally manage assets on a discretionary basis and invest in a variety of U.S. and international securities through various investment styles. Our revenues are bas ed primarily on the firm’s levels of assets under management and fees associated with our various investment products.

Since 1977, we have been identified with and have enhanced the “value” style approach to investing. Our investment objective is to earn a superior risk-adjusted return for our clients over the long-term through our proprietary fundamental research. In addition to our value portfolios, we offer our clients a broad array of investment strategies that include global, growth, international and convertible products. We also offer a series of investment partnership (performance fee-based) vehicles that provide a series of long-short investment opportunities in market and sector specific opportunities, including offerings of non-market correlated investments in merger arbitrage, as well as fixed income strategies.

Our revenues are highly correlated to the level of assets under management and fees associated with our various investment products, rather than our own corporate assets. Assets under management, which are directly influenced by the level and changes of the overall equity markets, can also fluctuate through acquisitions, the creation of new products, the addition of new accounts or the loss of existing accounts. Since various equity products have different fees, changes in our business mix may also affect revenues. At times, the performance of our equity products may differ markedly from popular market indices, and this can also impact our revenues. General stock market trends will have the greatest impact on our level of assets under management and hence, revenues.

We conduct our investment advisory business principally through: GAMCO Asset Management Inc. (Separate Accounts), Gabelli Funds, LLC (Mutual Funds) and Gabelli Securities, Inc. (Investment Partnerships). We also act as an underwriter, are a distributor of our open-end funds and provide institutional research through Gabelli & Company, Inc. (“Gabelli & Company”), our broker-dealer subsidiary.

Assets under management (“AUM”) were ~~$28.0~~$26.1 billion as of June 30, 2010, 22.1% greater than June 30, 2009 AUM of $21.4 billion but 6.7% below the March 31, 2010 ~~51.3% greater than March 31, 2009~~ AUM of ~~$18.5 billion and 6.2% higher than December 31, 2009 AUM of $26.3~~$28.0 billion. Equity AUM were ~~$26.2~~$24.5 billion on June 30, 2010, 25.0% above the $19.6 billion on June 30, 2009 but 6.6% below the March 31, 2010 ~~57.2% above the $16.7 billion on March 31, 2009 and 6.6% above the December 31, 2009~~ equity AUM of ~~$24.6~~$26.2 billion. Highlights are as follows:

Our open-end equity funds AUM were $8.7 billion on June 30, 2010, 29.9% higher than the $6.7 billion on June 30, 2009 but 5.1% below the $9.2 billion on March 31, ~~2010, 62.7% higher than the $5.6 billion on March 31, 2009 and 8.0% above the $8.5 billion on December 31, 2009.~~2010. During the ~~first~~second quarter of 2010 we had net cash inflow of ~~$281~~$180 million.

Our institutional and private wealth management business ended the quarter with ~~$12.0~~$10.9 billion in separately managed accounts, up ~~60.0%~~23.9% from the ~~$7.5~~$8.8 billion on June 30, 2009 but 9.2% lower than the March 31, ~~2009 and 7.1% higher than the December 31, 2009~~2010 level of ~~$11.2~~$12.0 billion. During the ~~first~~second quarter of 2010 we had net cash outflow of ~~$22~~$57 million.

Our closed-end funds had AUM of $4.5 billion on June 30, 2010, climbing 17.0% from the $3.8 billion on June 30, 2009 but 6.2% below the $4.8 billion on March 31, ~~2010, climbing nearly 42% from the $3.4 billion on March 31, 2009 and 3.4% above the $4.6 billion on December 31, 2009.~~2010. During the ~~first~~second quarter of 2010 we had net cash inflow of ~~$52~~$139 million.

Our investment partnerships AUM were $406 million on June 30, 2010 versus $266 million on June 30, 2009 and $341 million on March 31, ~~2010 versus $265 million on March 31, 2009 and $305 million on December 31, 2009.~~2010. During the ~~first~~second quarter of 2010 we had net cash inflow of ~~$29~~$65 million.

AUM in The Gabelli U.S. Treasury Money Market Fund, our 100% U.S. Treasury money market fund, ~~was flat~~declined to $1.6 billion at June 30, 2010 compared with $1.7 billion at March 31, 2010 ~~as compared to December 31, 2009~~ and ~~slightly lower than~~ the ~~March 31,~~June 30, 2009 AUM of $1.8 billion.

We have the opportunity to earn base fees and incentive fees for certain institutional client assets, assets attributable to preferred issues for our closed-end funds, our Gabelli Global Deal Fund (NYSE: GDL) and investment partnership assets. As of ~~March 31,~~June 30, 2010, assets with incentive based fees were ~~$2.9~~$2.8 billion, ~~16.0%~~7.7% higher than the ~~$2.5~~$2.6 billion on June 30, 2009 but 3.4% below the $2.9 billion on March 31, ~~2009 and 3.6% above the $2.8 billion on December 31, 2009.~~2010.

2223

The Company reported Assets Under Management as follows (in millions):	The Company reported Assets Under Management as follows (in millions):													The Company reported Assets Under Management as follows (in millions):

Table I: Fund Flows - 1st Quarter 2010
Table I: Fund Flows - 2nd Quarter 2010														Table I: Fund Flows - 2nd Quarter 2010
				Closed-end Fund													Closed-end Fund
				distributions,													distributions,							Market
		December 31,		net of			Net cash			Market		March 31,			March 31,		net of			Net cash				appreciation/			June 30,
		2009		reinvesments			flows (a)			appreciation		2010			2010		reinvesments			flows (a)				(depreciation)			2010
Equities:
Open-end Funds		$	8,476	$	-		$	281		$	396	$	9,153		$	9,153	$	-		$	180			$	(649	)	$	8,684
Closed-end Funds			4,609		(73	)		52			178		4,766			4,766		(76	)		139				(359	)		4,470
Institutional & PWM - direct			9,312		-			(46	)		638		9,904			9,904		-			(116	)			(800	)		8,988
Institutional & PWM - sub-advisory			1,897		-			24			138		2,059			2,059		-			59				(183	)		1,935
Investment Partnerships			305		-			29			7		341			341		-			65		(b)		-			406
Total Equities			24,599		(73	)		340			1,357		26,223			26,223		(76	)		327				(1,991	)		24,483
Fixed Income:
Money-Market Fund			1,721		-			5			1		1,727			1,727		-			(148	)			-			1,579
Institutional & PWM			26		-			-			-		26			26		-			-				-			26
Total Fixed Income			1,747		-			5			1		1,753			1,753		-			(148	)			-			1,605
Total Assets Under Management		$	26,346	$	(73	)	$	345		$	1,358	$	27,976		$	27,976	$	(76	)	$	179			$	(1,991	)	$	26,088
(a) Includes $52 million of shares issued for closed-end funds.

(a) Includes $139 million of shares issued for closed-end funds.														(a) Includes $139 million of shares issued for closed-end funds.
(b) Includes $50 million invested by the Company in a new merger arbitrage fund.														(b) Includes $50 million invested by the Company in a new merger arbitrage fund.

Table II:
The Company reported Assets Under Management as follows (in millions):								The Company reported Assets Under Management as follows (in millions):

Table II: Fund Flows - Six months ended June 30, 2010								Table II: Fund Flows - Six months ended June 30, 2010
											Closed-end Fund
											distributions,							Market
	March 31,		March 31,		%				December 31,		net of			Net cash				appreciation/			June 30,
	2009		2010		Inc.(Dec.)				2009		reinvesments			flows (a)				(depreciation)			2010
Equities:
Open-end Funds	$	5,627	$	9,153		62.7	%		$	8,476	$	-		$	461			$	(253	)	$	8,684
Closed-end Funds		3,359		4,766		41.9				4,609		(149	)		191				(181	)		4,470
Institutional & PWM - direct		6,227		9,904		59.0				9,312		-			(162	)			(162	)		8,988
Institutional & PWM - sub-advisory		1,202		2,059		71.3				1,897		-			83				(45	)		1,935
Investment Partnerships		265		341		28.7				305		-			94		(b)		7			406
Total Equities		16,680		26,223		57.2				24,599		(149	)		667				(634	)		24,483
Fixed Income:
Money-Market Fund		1,794		1,727		(3.7	)			1,721		-			(143	)			1			1,579
Institutional & PWM		21		26		23.8				26		-			-				-			26
Total Fixed Income		1,815		1,753		(3.4	)			1,747		-			(143	)			1			1,605
Total Assets Under Management	$	18,495	$	27,976		51.3	%		$	26,346	$	(149	)	$	524			$	(633	)	$	26,088

(a) Includes $191 million of shares issued for closed-end funds.								(a) Includes $191 million of shares issued for closed-end funds.
(b) Includes $50 million invested by the Company in a new merger arbitrage fund.								(b) Includes $50 million invested by the Company in a new merger arbitrage fund.

Table III:
	June 30,		June 30,		%
	2009		2010		Inc.(Dec.)
Equities:
Open-end Funds	$	6,684	$	8,684		29.9	%
Closed-end Funds		3,822		4,470		17.0
Institutional & PWM - direct		7,332		8,988		22.6
Institutional & PWM - sub-advisory		1,476		1,935		31.1
Investment Partnerships		266		406		52.6
Total Equities		19,580		24,483		25.0
Fixed Income:
Money-Market Fund		1,765		1,579		(10.5	)
Institutional & PWM		21		26		23.8
Total Fixed Income		1,786		1,605		(10.1	)
Total Assets Under Management	$	21,366	$	26,088		22.1	%

Table III: Assets Under Management by Quarter
Table IV: Assets Under Management by Quarter																Table IV: Assets Under Management by Quarter
											% Increase/																% Increase/
											(decrease) from																(decrease) from
		3/09		6/09		9/09		12/09		3/10		3/09		12/09				6/09		9/09		12/09		3/10		6/10		6/09		3/10
Equities:
Open-end Funds	$	5,627	$	6,684	$	7,906	$	8,476	$	9,153		62.7	%	8.0	%		$	6,684	$	7,906	$	8,476	$	9,153	$	8,684		29.9	%	(5.1	%)
Closed-end Funds		3,359		3,822		4,369		4,609		4,766		41.9		3.4				3,822		4,369		4,609		4,766		4,470		17.0		(6.2	)
Institutional & PWM - direct		6,227		7,332		8,491		9,312		9,904		59.0		6.4				7,332		8,491		9,312		9,904		8,988		22.6		(9.2	)
Institutional & PWM - sub-advisory		1,202		1,476		1,777		1,897		2,059		71.3		8.5				1,476		1,777		1,897		2,059		1,935		31.1		(6.0	)
Investment Partnerships		265		266		291		305		341		28.7		11.8				266		291		305		341		406		52.6		19.1
Total Equities		16,680		19,580		22,834		24,599		26,223		57.2		6.6				19,580		22,834		24,599		26,223		24,483		25.0		(6.6	)
Fixed Income:
Money-Market Fund		1,794		1,765		1,616		1,721		1,727		(3.7	)	0.3				1,765		1,616		1,721		1,727		1,579		(10.5	)	(8.6	)
Institutional & PWM		21		21		26		26		26		23.8		-				21		26		26		26		26		23.8		-
Total Fixed Income		1,815		1,786		1,642		1,747		1,753		(3.4	)	0.3				1,786		1,642		1,747		1,753		1,605		(10.1	)	(8.4	)
Total Assets Under Management	$	18,495	$	21,366	$	24,476	$	26,346	$	27,976		51.3	%	6.2	%		$	21,366	$	24,476	$	26,346	$	27,976	$	26,088		22.1	%	(6.7	%)

2325

Relative long-term investment performance remains strong. ~~60%~~45% of all firm mutual funds performed in the top half of their Lipper categories on a one-, three-, five-, and ten-year total return basis, respectively as of ~~March 31,~~June 30, 2010. Also, ~~47%~~50% of the firm’s mutual funds have a 4- or 5-star 3 year Morningstar RatingTM.

Gabelli Funds Morningstar Ratings Based on Risk Adjusted returns as of March 31, 2010 for funds that we manage

Gabelli Funds Morningstar Ratings Based on Risk Adjusted returns as of June 30, 2010 for funds that we manage

Overall Rating

3 Year Rating

5 Year Rating

10 Year Rating

Overall Rating

3 Year Rating

5 Year Rating

10 Year Rating

Morningstar

# of

Morningstar

# of

FUND

Category

Stars

Funds

Stars

Funds

Stars

Funds

Stars

Funds

Gabelli ABC AAA

Mid-Cap Blend

êêêêê

376

êêêêê

376

êêêêê

314

êêêê

161

Mid-Cap Blend

êêêêê

364

êêêêê

364

êêêêê

307

êêêêê

161

Gabelli Asset AAA

Mid-Cap Blend

êêêê

376

êêêê

376

êêêê

314

êêê

161

Large Blend

êêêêê

1810

êêêê

1810

êêêêê

1486

êêêêê

772

Gabelli Blue Chip Value AAA

Large Blend

êêê

1785

êêê

1785

êêêê

1402

êêê

731

Large Blend

êêêê

1810

êêêê

1810

êêêê

1486

êêê

772

Gabelli Equity Income AAA

Large Value

êêêêê

1120

êêêêê

1120

êêêêê

941

êêêêê

476

Large Value

êêêêê

1135

êêêêê

1135

êêêêê

952

êêêêê

494

Gabelli Small Cap Growth AAA

Small Blend

êêêêê

562

êêêêê

562

êêêêê

471

êêêê

248

Small Blend

êêêêê

565

êêêêê

565

êêêêê

479

êêêê

251

Gabelli SRI Green AAA

Mid-Cap Blend

n/a

Mid-Cap Growth

êêêêê

694

êêêêê

694

n/a

Gabelli Utilities AAA

Specialty-Utilities

êêêê

êêêêê

êêêê

Specialty-Utilities

êêêê

êêêêê

êêêê

Gabelli Value A

Mid-Cap Blend

êê

376

êê

376

êê

314

êê

161

Mid-Cap Blend

êê

364

êê

364

êê

307

êê

161

Gabelli Woodland Small Cap Value AAA

Small Blend

êêê

562

êêêê

562

êêê

471

n/a

Small Blend

êêê

565

êêê

565

êêê

479

n/a

GAMCO Global Convertible Secs AAA

Convertibles

êê

GAMCO Global Growth AAA

World Stock

êê

565

êêê

565

êêê

456

255

World Stock

êê

594

êêê

594

êêê

471

259

GAMCO Global Opportunity AAA

World Stock

êêê

565

êêê

565

êêêê

456

êêê

255

World Stock

êêê

594

êêê

594

êêê

471

êêê

259

GAMCO Global Telecommunications AAA

Specialty-Communications

êêê

Specialty-Communications

êêêê

êêê

êêêê

GAMCO Gold AAA

Specialty-Precious Metals

êêê

Specialty-Precious Metals

êêêê

êêê

êêêê

GAMCO Growth AAA

Large Growth

êê

1547

êêê

1547

êê

1276

êê

718

Large Growth

êê

1545

êê

1545

êê

1298

êê

739

GAMCO International Growth AAA

Foreign Large Growth

êêê

215

êêêê

215

êêê

158

êêê

Foreign Large Growth

êêê

215

êêê

215

êêê

158

êêê

GAMCO Mathers

Conservative Allocation

êê

533

êêê

533

êê

349

161

Conservative Allocation

êê

555

êêêê

555

êêê

400

162

Gabelli Enterprise Mergers & Acquisitions Y

Mid-cap Blend

êêêê

376

êêêê

376

êêêê

314

n/a

Gabelli Enterprise Mergers & Acquisitions A

Mid-cap Blend

êêêê

364

êêêêê

364

êêêê

307

n/a

Comstock Capital Value AAA

Bear Market

n/a

Bear Market

n/a

Percent of Rated funds rated 4 or 5 stars

35.29%

47.06%

26.67%

55.56%

50.00%

47.06%

46.67%

The Overall Morningstar Rating™ is derived from a weighted average of the performance figures associated with its three, five and ten year (if applicable) Morningstar Rating metrics.

Data presented reflects past performance, which is no guarantee of future results. Ratings are for Class AAA, A or Y shares only, other classes may have different performance

Data presented reflects past performance, which is no guarantee of future results. Ratings are for Class AAA or A shares only, other classes may have different performance

characteristics. Unrated funds and closed-end funds are not listed. For each fund with at least a three year history, Morningstar calculates a Morningstar Rating based on a

Morningstar Risk-Adjusted Return measure (including the effects of sales charges, loads, and redemption fees) that accounts for variation in a fund's monthly performance, placing

more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35%

receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which

information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or

timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Investors should consider the investment

objectives, risks, sales charges and expenses of the fund carefully before investing. Each Fund's prospectus contains this and other information about the Funds and is available,

along with information on other Gabelli Funds, by calling 800-GABELLI (422-3554), online at www.gabelli.com/funds or from your financial advisor. The prospectus should be

read carefully before investing. Distributed by Gabelli & Company, One Corporate Center, Rye, NY 10580 Call 1-800-GABELLI (422-3554) for a prospectus.

The inception date for the Gabelli SRI Green Fund was June 1, 2007. The inception date for the Gabelli Woodland Small Cap Value Fund was December 31, 2002.

The inception date for the Gabelli Enterprise Mergers & Acquisitions Fund was February 28, 2001. The inception date for the Comstock Capital Value Fund was October 10, 1985.

2426

GABELLI/GAMCO FUNDS

Gabelli Funds Lipper Rankings as of March 31, 2010

Gabelli Funds Lipper Rankings as of June 30, 2010

1 Yr - 03/31/09-03/31/10

3 Yrs - 03/31/07-03/31/10

5 Yrs - 03/31/05-03/31/10

10 Yrs - 03/31/00-03/31/10

1 Yr - 06/30/09-06/30/10

3 Yrs - 06/30/07-06/30/10

5 Yrs - 06/30/05-06/30/10

10 Yrs - 06/30/00-06/30/10

Percentile

Rank /

Percentile

Rank /

Percentile

Rank /

Percentile

Rank /

Percentile

Rank /

Percentile

Rank /

Percentile

Rank /

Percentile

Rank /

Fund Name

Lipper Category

Rank

Total Funds

Rank

Total Funds

Rank

Total Funds

Rank

Total Funds

Lipper Category

Rank

Total Funds

Rank

Total Funds

Rank

Total Funds

Rank

Total Funds

Gabelli Asset; AAA

Multi-Cap Core Funds

148/805

137/698

61/539

45/234

Multi-Cap Core Funds

116/857

139/741

67/595

52/257

Gabelli Value Fund; A

Multi-Cap Core Funds

60/805

429/698

299/539

74/234

Multi-Cap Core Funds

4/857

244/741

192/595

80/257

Gabelli SRI; AAA

Multi-Cap Growth Funds

21/456

Multi-Cap Growth Funds

377/412

38/365

Gabelli Eq:Eq Inc; AAA

Equity Income Funds

79/298

44/245

30/193

14/108

Equity Income Funds

88/275

54/233

36/187

14/106

GAMCO Growth; AAA

Large-Cap Growth Funds

225/834

444/730

323/611

235/330

Large-Cap Growth Funds

791/848

534/733

374/617

270/335

Gabelli Eq:SC Gro; AAA

Small-Cap Core Funds

514/733

86/621

84/508

64/272

Small-Cap Core Funds

527/760

101/666

92/549

69/278

Gabelli Eq:Wd SCV; AAA

Small-Cap Core Funds

237/733

166/621

282/508

Small-Cap Core Funds

714/760

284/666

355/549

GAMCO Gl:Oppty; AAA

Global Large-Cap Growth

44/125

24/87

15/66

11/40

Global Large-Cap Growth

44/119

14/85

18/70

12/41

GAMCO Gl:Growth; AAA

Global Large-Cap Growth

47/125

14/87

23/66

36/40

Global Large-Cap Growth

79/119

26/85

29/70

37/41

GAMCO Gold; AAA

Gold Oriented Funds

41/74

27/59

21/52

9/31

Precious Metal Funds

42/80

28/63

20/52

9/32

GAMCO Intl Gro; AAA

International Large-Cap Growth

45/187

50/148

77/115

31/58

International Large-Cap Growth

28/186

68/153

72/111

36/65

Gabelli Bl Chp Val; AAA

Large-Cap Core Funds

622/930

380/799

228/664

96/387

Large-Cap Core Funds

621/979

228/834

151/709

88/417

Gabelli Inv:ABC; AAA