AB Watley Group Announces Cost Cuts of $8.3 Million.

NEW YORK -- AB Watley Group Inc. (OTCBB: ABWG), a financial services holding company, today announced the results of its corporate cost cutting plan. For the Fiscal Year Ended September 30, 2004 (FY 2004), the Company reduced total annual expenses by 39%, to $13.1 million, from the Fiscal Year Ended September 30, 2003 (FY 2003). The following factors contributed to the reduction:

--Commissions, Floor Brokerage and Clearing Charges decreased $1.5 million, or 26%, from $5.7 million in FY 2003 to $4.3 million for FY 2004 due to the discontinuation of proprietary trading

--Employee Compensation and Related Costs decreased by $3.9 million, or 46%, from $8.6 million for FY 2003 to $4.7 million for FY 2004 primarily due to reductions of administrative staff and compensation paid to proprietary traders

--Communications expenses decreased by $554,594, or 47.5%, from $1,168,418 in FY 2003 to $613,824 for FY 2004 due to the cancellation of data lines and renegotiated vendor rates

--Occupancy and Equipment costs decreased by $898,020, or 43.5%, from FY 2003 to $1.2 million for FY 2004 due to the Company vacating its office space at 40 Wall Street, and subsequent relocation to 90 Park Avenue, New York, NY

--Business Development consisting primarily of costs associated with attending and exhibiting at trade shows to obtain new clients decreased by $105,656, or 36%, from FY 2003 to $186,212 in FY 2004 due to reduced advertising and promotional efforts

--Professional Fees consisting primarily of legal and accounting costs and additional external administrative consultants decreased by $54,699 or 6.6%, from FY 2003 to $774,440 for FY 2004 primarily due to improved efficiencies in financial reporting.

"To ensure the long-term viability of AB Watley Group, we are taking positive steps to reduce costs and increase cash flow," said Robert Malin, President of AB Watley Group. Our new lower cost structure allows us to pursue additional revenue producing sources including strategic relationships and business-to-business offerings. We are now capable of competing with anybody with regards to technology and pricing and may consider attractive acquisitions in the future."

About AB Watley Group Inc.

AB Watley Group Inc. (Ticker Symbol "ABWG.OB") is a publicly held financial services holding company. The Company conducts its core business through its subsidiary AB Watley Direct, Inc., a U.S. registered broker-dealer that provides online trading and direct access trading services for retail and institutional clients. AB Watley Group provides direct access software and facilities to each of its divisions (online, retail and institutional). The Company's main focus is supporting its brokerage units' initiatives.

Statements contained in this release, which are not historical facts, may be considered "forward-looking statements" and are based on current expectations and the current economic environment. We caution the reader that such forward-looking statements are not guarantees of future performance. Unknown risk, uncertainties, as well as other uncontrollable or unknown factors could cause actual results to materially differ from the result, performance, or expectations expressed or implied by such forward-looking statements.