Original GBL Prospectus - Gabelli

the requirements of the Commission could have a material adverse eÅect on the Company. The Company
believes it is in substantial compliance with the requirements of the Commission.
The Company derives a substantial majority of its revenues from investment advisory services through its
investment management agreements. Under the Investment Advisers Act, the Company's investment
management agreements terminate automatically if assigned without the client's consent. Under the
Investment Company Act, advisory agreements with registered investment companies such as the Mutual
Funds terminate automatically upon assignment. The term ""assignment'' is broadly deÑned and includes
direct assignments as well as assignments that may be deemed to occur, under certain circumstances, upon the
transfer, directly or indirectly, of a controlling interest in the Company. The OÅering will not constitute an
assignment for these purposes. Accordingly, the Company does not intend to seek approvals of new investment
advisory agreements from the shareholders of the registered investment companies it manages or other client
consents in connection with these transactions.
In its capacity as a broker-dealer, Gabelli & Company is required to maintain certain minimum net
capital and cash reserves for the beneÑt of its customers. Gabelli & Company's net capital, as deÑned, has
consistently met or exceeded all minimum requirements. Under the rules and regulations of the Commission
promulgated pursuant to the federal securities laws, the Company is subject to periodic examination by the
Commission. Gabelli & Company is also subject to periodic examination by the NASD. The most recent
examination by the Commission of the Gabelli family of funds was in June 1998 and of the Gabelli Westwood
family of funds was in November 1997. The most recent examination of Gabelli & Company by the NASD
was in September 1998. There were no material compliance issues reported by either the Commission or the
NASD as a result of such examinations.
Subsidiaries of the Company are subject to the Employee Retirement Income Security Act of 1974, as
amended (""ERISA''), and to regulations promulgated thereunder, insofar as they are ""Ñduciaries'' under
ERISA with respect to their clients. ERISA and applicable provisions of the Internal Revenue Code of 1986,
as amended (the ""Code''), impose certain duties on persons who are Ñduciaries under ERISA and prohibit
certain transactions involving ERISA plan clients. The failure of the Company to comply with these
requirements could have a material adverse eÅect on the Company.
Investments by the Company on behalf of its clients often represent a signiÑcant equity ownership
position in an issuer's class of stock. As of September 30, 1998, the Company had Ñve percent or more
beneÑcial ownership with respect to more than 85 equity securities. This activity raises frequent regulatory and
legal issues regarding the Company's aggregate beneÑcial ownership level with respect to portfolio securities,
including issues relating to issuers' shareholder rights plans or ""poison pills,'' state gaming laws and
regulations, federal communications laws and regulations, public utility holding company laws and regulations,
federal proxy rules governing shareholder communications and federal laws and regulations regarding the
reporting of beneÑcial ownership positions. The failure of the Company to comply with these requirements
could have a material adverse eÅect on the Company.
Mr. Gabelli is registered with the U.S. Commodity Futures Trading Commission/National Futures
Association as a Öoor broker and commodity pool operator.
The Company and certain of its aÇliates are subject to the laws of non-U.S. jurisdictions and non-U.S.
regulatory agencies or bodies. In particular, the Company is subject to requirements in numerous jurisdictions
regarding reporting of beneÑcial ownership positions in securities issued by companies whose securities are
publicly traded in those countries. In addition, GAMCO is registered as an international adviser, investment
counsel and portfolio manager with the Ontario Securities Commission in Canada in order to market its
services to prospective clients which reside in Ontario. Gabelli Associates Limited is organized under the laws
of the British Virgin Islands and Gabelli International Gold Fund Limited is organized under the laws of
Bermuda.
Legal Matters
From time to time, the Company is a defendant in various lawsuits incidental to its business. The
Company does not believe that the outcome of any current litigation will have a material eÅect on the Ñnancial
condition of the Company.
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