Registration Statement No. 333-63188
Rule 424(b)(3) Prospectus

[MORGAN LOGO]
THE MORGAN GROUP, INC.

Prospectus Supplement
(To Prospectus dated December 12, 2001)

This Prospectus Supplement dated February 26, 2002 amends and supplements
the prospectus of The Morgan Group, Inc. (Registration Statement No. 333-63188)
relating to the shares of Class A common stock issuable upon exercise of
warrants.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy of this prospectus supplement. Any representation to the contrary is a
criminal offense.

REDUCTION OF EXERCISE PRICE

On December 12, 2001, we issued non-transferable warrants to purchase
shares of Class A common stock to the holders of our Class A common stock. Each
warrant entitles the holder to purchase one share of Class A common stock at an
exercise price of $9.00 per share. At the time of issuance, we agreed to reduce
the exercise price to $6.00 per share for a reduction period of at least 30 days
to be set by our Board of Directors.

On February 19, 2002, our Board of Directors agreed to set the reduction
period to begin on February 26, 2002 and to extend for 63 days, expiring on
April 30, 2002 (the "Reduction Period"). The Board of Directors agreed to reduce
the exercise price of the warrants to $2.25 per share, instead of $6.00 per
share, during the Reduction Period. All other terms regarding the warrants,
including the expiration date of the warrants, remain the same.

The Board of Directors determined to reduce the exercise price to $2.25 to
give warrant holders the opportunity to purchase shares at a price in the range
the recent trading prices of the Class A common stock, with a view to generating
proceeds, if warrants are exercised, to assist the Company in addressing near
term liquidity requirements. The Board of Directors makes no recommendation
whether to exercise warrants.

From January 1, 2002 through February 25, 2002, the high and low trading
prices of the Class A common stock were $2.70 and $1.90, respectively. At
February 25, 2002, the closing price of the Class A common stock on the American
Stock Exchange was $1.90 per share.

Capitalized terms used in this Prospectus Supplement and not defined have
the meanings given to them in the prospectus dated December 12, 2001.

TELEPHONE NUMBER CORRECTION

If you have questions about this offering, including questions about the
procedure for exercising warrants or requests for additional copies of the
prospectus or prospectus supplement, please contact the warrant agent toll free
at (877) 777-0800.

EXERCISE OF WARRANTS

You may exercise your warrants by properly completing and signing your
warrant certificate, including, if required, a signature guarantee from an
eligible institution. The "Election to Purchase Form" on the back of your
warrant certificate has been preprinted with the warrant exercise price of
$9.00, with a notation that the exercise price will be reduced to $6.00 during
the reduction period. In calculating your aggregate exercise price, if you
tender your warrants so that they are received on or prior to April 30, 2002,
you should use the exercise price of $2.25 instead of $9.00 per share. If you
tender your warrants so that they are received by the warrant agent on or prior
to April 30, 2002, you will be deemed to have tendered at the reduced exercise
price of $2.25 per share, regardless of the preprinted price on the warrant
certificate. If you do not tender your warrants so that they are received by the
warrant agent on or prior to April 30, 2002, the exercise price will return to
$9.00 per share. Mail or deliver your properly executed warrant certificate to
the warrant agent, together with payment of the aggregate warrant exercise price
in full to the following address:

American Stock Transfer & Trust Company
59 Maiden Lane, Plaza Level
New York, New York 10038

RECENT DEVELOPMENTS

Summary Discussion and Analysis of Financial Condition and Results of
Operations. Our revenues decreased by 21% to $101.2 million in 2001 from $128.4
million in 2000. The largest decline was in the manufactured housing division
where revenues were down 33% to $60.2 million from $89.2 million in the prior
year. The driver outsourcing division declined 16% to $17.6 million while
specialized outsourcing increased 37% to $21.0 million. Our revenues and
accounts receivable have declined from December 31, 2000, due to a continued
slump in the manufactured housing markets. Industry shipments of manufactured
homes, our largest division, declined by 24% in 2001 compared to 2000. In our
second largest division, industry shipments of recreational vehicles declined by
19% in 2001 from the prior year.

We have historically experienced seasonally weak demand in the months from
November to February, due to seasonal declines in the shipment of manufactured
homes in areas where winter weather conditions inhibit transport. For the
quarter ended December 31, 2001, our revenues and accounts receivable declined
due to this normal seasonality. Revenues for the fourth quarter were also
negatively affected for all four divisions by the events of September 11, 2001.
Shippers experienced work slowdowns and demand fell as customers cancelled
orders. Results for the fourth quarter of 2001 were also adversely affected
relative to the last quarter of 2000 by the loss of a significant customer
earlier in the year and competitive factors described in the Prospectus.

Our accounts receivable provide much of the collateral base for our
existing credit facility, which supports outstanding letters of credit and
provides borrowing capacity for working capital. The impact of our decreased
revenues and accounts receivable have, therefore, reduced our borrowing capacity
and liquidity to minimal levels. Management is aggressively pursuing financing
options to allow us to meet our liquidity requirements during this slow period
until accounts receivable recover to stronger levels. We are working with our
lenders to obtain additional financing, and to obtain modification or waivers
with respect to certain credit facility covenants. We recently obtained
additional temporary credit availability from our principal lender in the amount
of up to $1 million. In December, 2001, we obtained a reduction of $750,000 in
our liability insurance collateral requirements and we are pursuing discussions
with our insurance providers for further reductions in such collateral
requirements. In December 2001 and February 2002 we have received rebates of
prepaid insurance premiums aggregating approximately $800,000. We expect to
receive further rebates of prepaid insurance premiums of approximately $500,000
due to our reduced business volume over the last several months, but the time of
receipt and eventual amount of such refunds is uncertain. Additionally,
management expects that the reduction in the warrant exercise price may induce
warrant holders to exercise their warrants, resulting in increased liquidity.
Two of our principal stockholders have orally indicated an interest in
exercising warrants at the reduced exercise price which, if exercised during the
Reduction Period, would provide for approximately $460,000 in gross proceeds. We
can give no assurance, however, that any warrants will be exercised. At this
time, our ability to successfully cover our financial obligations during this
slow season is uncertain.

Spin-off by Controlling Stockholder. On January 20, 2002, Lynch Interactive
Corporation, our majority stockholder, completed a transaction to spin off its
investment in us to a newly formed company called Morgan Group Holding Co.
Stockholders of record of Lynch Interactive Corporation as of December 18, 2001,
received one share of Morgan Group Holding Co. for each share owned of Lynch
Interactive Corporation.

Unaudited Summary Financial Statements. Following is our unaudited summary
consolidated balance sheet data at December 31, 2001 and 2000, and the related
unaudited summary consolidated statements of operations data for each of the two
years ended, and the fourth quarters of the fiscal years ended, December 31,
2001 and 2000, respectively. The audit of our financial statements for 2001 is
not yet complete. Accordingly, these results should be considered preliminary
and subject to adjustments that may result from the audit process. Such
adjustments may be material. The unaudited summary financial statements omit
footnote disclosures that will accompany the audited financial statements when
complete.

The Morgan Group, Inc.
Unaudited Summary Financial Data
(in 000's)

Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000

Operating revenue 19,458 26,210 101,168 128,367
Operating loss (1,636) (1,431) (1,882) (2,038)
Pre-tax net loss (1,726) (1,532) (2,155) (2,348)

At December 31,
2001 2000

Total assets 22,691 23,269
Working capital 1,468 1,063
Stockholders equity 7,326 7,201