SIEBERT FINANCIAL CORP — Interim / Quarterly Report 2008

May 15, 2008

10-Q 1 n10440.htm FORM 10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM 10-Q

(Mark One)

x
For the
quarterly period ended March 31, 2008

| o |
| --- |
| For the
transition period from ____ to
_______ |
| Commission
file number 0-5703 |

Siebert Financial Corp.
(Exact Name of Issuer as Specified in its Charter)

New York	11-1796714
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

885 Third Avenue, New York, NY 10022
(Address of Principal Executive Offices)
(212) 644-2400
(Issuer’s Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 x No o

Indicate by check mark whether the registrant is a large accelerated, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one) Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer o Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of May 1, 2008, there were 22,214,632 shares of Common Stock, par value $.01 per share, outstanding.

Unless the context otherwise requires, the “Company” shall mean Siebert Financial Corp. and its wholly owned subsidiaries and “Siebert” shall mean Muriel Siebert & Co., Inc., a wholly owned subsidiary of the Company.

Certain statements contained in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below and elsewhere in this document, as well as oral statements that may be made by us or by our officers, directors or employees acting on our behalf, that are not statements of historical or current fact constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve risks and uncertainties and known and unknown factors that could cause our actual results to be materially different from our historical results or from any future results expressed or implied by such forward looking statements, including, without limitation: changes in general economic and market conditions; fluctuations in volume and prices of securities; demand for brokerage and investment banking services; competition within and without the discount brokerage business, including the offer of broader services; competition from electronic discount brokerage firms offering lower rates on commissions than we do prevalence of a flat fee environment; decline in participation in equity or municipal finance underwritings; limited trading opportunities; the method of placing trades by our customers; computer and telephone system failures; our level of spending on advertising and promotions; trading errors and the possibility of losses from customer non-payment of amounts due; other increases in expenses and changes in net capital or other regulatory requirements. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date when such statements were made or to reflect the occurrence of unanticipated events. An investment in us involves various risks, including those mentioned above and those which are detailed from time to time in our Securities and Exchange Commission filings.

1

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Siebert Financial Corp. & Subsidiaries Consolidated Statements of Financial Condition

	March 31, 2008
	(unaudited)
ASSETS
Cash and
cash equivalents	$ 8,559,000	$	34,589,000
Cash
equivalents – restricted	1,300,000		1,300,000
Securities
owned, at market value – Treasury bills	25,002,000
Securities
owned, at market value - other	393,000		739,000
Receivable
from clearing broker	2,263,000		1,683,000
Furniture,
equipment and leasehold improvements, net	1,156,000		1,037,000
Investment
in and advances to equity investees	5,692,000		5,902,000
Prepaid
expenses and other assets	1,277,000		936,000
Intangibles,
net	835,000		871,000
Deferred taxes	853,000		867,000
	$ 47,330,000	$	47,924,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts
payable and accrued liabilities	5,224,000		5,704,000
Contingencies
Stockholders’
equity:
Common
stock, $.01 par value; 49,000,000 shares authorized, 23,211,846 shares issued
and 22,212,346 shares outstanding at March 31, 2008 and December 31, 2007	232,000		232,000
Additional
paid-in capital	18,846,000		18,832,000
Retained
earnings	27,532,000		27,660,000
Less:
999,500 shares of treasury stock, at cost at March 31, 2008 and December 31,
2007	(4,504,000	)	(4,504,000	)
	42,106,000		42,220,000
	$ 47,330,000	$	47,924,000

See notes to consolidated financial statements.

2

Siebert Financial Corp. & Subsidiaries Consolidated Statements of Income (unaudited)

	Three Months Ended March 31, — 2008		2007
Revenues:
Commissions and fees	$ 6,201,000		$ 6,561,000
Investment banking	1,257,000		963,000
Trading profits	39,000		98,000
Interest and dividends	400,000		450,000
	7,897,000		8,072,000
Expenses:
Employee compensation and benefits	3,270,000		3,074,000
Clearing fees, including floor brokerage	1,578,000		1,409,000
Professional fees	1,186,000		1,033,000
Advertising and promotion	303,000		348,000
Communications	644,000		385,000
Occupancy	326,000		313,000
Other general and administrative	715,000		745,000
	8,022,000		7,307,000
(Loss) income from equity investees	(57,000	)	934,000
(Loss) income before income taxes	(182,000	)	1,699,000
(Benefit) provision for income taxes	(54,000	)	714,000
Net (loss) income	$ (128,000	)	$ 985,000
Net (loss) income per share of common stock - Basic and Diluted	$ (.01	)	$ .04
Weighted average shares outstanding - Basic	22,212,346		22,203,346
Weighted average shares outstanding - Diluted	22,212,346		22,313,728

See notes to consolidated financial statements.

3

Siebert Financial Corp. & Subsidiaries Consolidated Statements of Cash Flows (unaudited)

	Three Months Ended March 31, — 2008		2007
Cash
flows from operating activities:
Net (loss)
income	$ (128,000	)	$ 985,000
Adjustments to
reconcile net (loss) income to net cash provided by operating activities:
Depreciation and
amortization	113,000		163,000
(Loss) income
from equity investees	57,000		(934,000	)
Distribution from
equity investees	21,000		1,153,000
Deferred taxes	14,000		(20,000	)
Employee stock
based compensation	14,000		23,000
Unrealized loss
of securities owned, at market value - other	110,000		—
Proceeds from
sale of securities owned, at market value - other	236,000		—
Changes in:
Receivable from
clearing broker	(580,000	)	(19,000	)
Accrued interest
on securities owned, at market value - Treasury bills	(204,000	)	—
Prepaid expenses
and other assets	(341,000	)	(156,000	)
Accounts payable
and accrued liabilities	(480,000	)	(451,000	)
Net cash (used
in) provided by operating activities	(1,168,000	)	744,000
Cash
flows from investing activities:
Purchase of
securities owned, at market value - Treasury bills	(24,798,000	)	—
Purchase of
furniture, equipment and leasehold improvements	(196,000	)	(459,000	)
Collection
(payment) of advances made to equity investees	132,000		(534,000	)
Net cash used in
investing activities	(24,862,000	)	(993,000	)
Cash
flows from financing activities:
Proceeds from
exercise of options	—		11,000
Net cash
provided by financing activities	—		11,000
Net decrease in
cash and cash equivalents	(26,030,000	)	(238,000	)
Cash and cash
equivalents - beginning of period	34,589,000		32,606,000
Cash and cash
equivalents - end of period	$ 8,559,000		$ 32,368,000
Supplemental
cash flow disclosures:
Cash paid for:
Income taxes	$ 36,000		$ 556,000

See notes to consolidated financial statements.

4

Siebert Financial Corp. & Subsidiaries Notes to Condensed Consolidated Financial Statements Three Months Ended March 31, 2008 and 2007 (Unaudited)

1.	Organization and Basis of Presentation:
	The
consolidated financial statements include the accounts of Siebert Financial
Corp. (the “Company”) and its wholly owned subsidiaries Muriel Siebert &
Co., Inc. (“Siebert”) and Siebert Women’s Financial Network, Inc. (“WFN”).
All material intercompany balances and transactions have been eliminated.
Investment in two entities in which the Company has ownership interests of
49% and 33.33%, respectively, are accounted for by the equity method. The
statements are unaudited; however, in the opinion of management, all
adjustments considered necessary to reflect fairly the Company’s financial
position and results of operations, consisting of normal recurring
adjustments, have been included.
	The
accompanying consolidated financial statements do not include all of the
information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America. Accordingly, the statements should
be read in conjunction with the audited financial statements included in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2007.
Because of the nature of the Company’s business, the results of any interim
period are not necessarily indicative of results for a full year.
2.	Securities owned, at market value:
	The Company
adopted SFAS No. 157, “Fair Value Measurements,” in the first quarter of
2008. SFAS No. 157 defines fair value, establishes a framework for measuring
fair value and requires enhanced disclosures about fair value measurements.
As defined in SFAS No. 157, fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction
between participants at the measurement date. In determining fair value, the
Company often utilizes certain assumptions that market participants would use
in pricing the asset or liability, including assumptions about risk and or
the risks inherent in the inputs to the valuation technique. These inputs can
be readily observable, market corroborated, or generally unobservable firm
inputs. The fair value hierarchy ranks the quality and reliability of the
information used to determine fair values. Financial assets and liabilities
carried at fair value will be classified and disclosed in one of the
following three categories:
	Level 1 –
valued based on quoted prices at the measurement date for identical assets or
liabilities trading in active markets.
	Level 2 – Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the
asset or liability.
	Level 3 –
valuations derived from valuation techniques in which one or more significant
inputs is not readily observable.

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As of March 31, 2008:

| Securities
owned, at market value | Level 1 | Level 2 | Level 3 | Total |
| --- | --- | --- | --- | --- |
| Treasury
bills | $25,002,000 | — | — | $25,002,000 |
| NASDAQ
common stock | $ 393,000 | — | — | $ 393,000 |

3.	Earnings (Loss) Per Share:
	Basic
earnings (loss) per share is calculated by dividing net income (loss) by the
weighted average outstanding shares during the period. Diluted earnings per
share is calculated by dividing net income by the number of shares
outstanding under the basic calculation and adding all dilutive securities,
which consist of options. The treasury stock method is used to reflect the
dilutive effect of outstanding options, which, for the three months ended
March 31, 2007 amounted to 110,382 additional shares, added to the basic
weighted average outstanding shares of 22,203,346. The Company recognized a
net loss for the three months ended March 31, 2008. Accordingly, basic and
diluted common shares are the same as the effect of potentially dilutive
securities would be anti-dilutive to loss per share. Potentially dilutive
securities consisting of outstanding options not included in the computation
of diluted (loss) income per share as the effect would have been
anti-dilutive for the three months ended March 31, 2008 and 2007 amounted to
1,467,200 and 1,288,466, respectively.
4.	Net Capital:
	Siebert is
subject to the Securities and Exchange Commission’s Uniform Net Capital Rule
(Rule 15c3-1), which requires the maintenance of minimum net capital. Siebert
has elected to use the alternative method, permitted by the rule, which
requires that Siebert maintain minimum net capital, as defined, equal to the
greater of $250,000 or two percent of aggregate debit balances arising from
customer transactions, as defined. The Net Capital Rule of the New York Stock
Exchange also provides that equity capital may not be withdrawn or cash dividends
paid if resulting net capital would be less than five percent of aggregate
debits. As of March 31, 2008, Siebert had net capital of approximately
$29,127,000 as compared with net capital requirements of $250,000.
5.	Capital Transactions:
	On January
22, 2008, the Board of Directors of the Company authorized a buy back of up
to 300,000 shares of common stock. Shares will be purchased from time to time
in the open market and in private transactions.
6.	Siebert Brandford Shank & Co., LLC:
	Summarized
financial data (presented in thousands) of Siebert Brandford Shank & Co.,
LLC, (“SBS”) as of and for the three months ended March 31, 2008 and 2007 is
set forth below. Siebert holds a 49% ownership interest in SBS which serves
as an underwriter for Municipal bond offerings. Income from SBS is considered
to be integral to Siebert’s operations and material to the results of
operations.

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| Total assets including
secured demand note of $1,200,000 in each period due from Siebert | 2008 — $ 16,122,000 | $ | 30,527,000 |
| --- | --- | --- | --- |
| Total liabilities
including subordinated liabilities of $1,200,000 in each period due to Siebert | 6,358,000 | | 18,951,000 |
| Total members’ capital | 9,765,000 | | 11,576,000 |
| Total revenues | 4,601,000 | | 7,657,000 |
| Net (loss) income | (97,000 | ) | 1,902,000 |

| | Siebert charged SBS
$46,000 and $60,000 for the three months ended March 31, 2008 and 2007,
respectively, for general and administrative services, which Siebert believes
approximates the cost of furnishing such services. |
| --- | --- |
| | Siebert’s share of
undistributed earnings from SBS amounted to $4,393,000 and $5,280,000 at
March 31, 2008 and 2007, respectively. Such amounts may not be immediately
available for distribution to Siebert for various reasons including the
amount of SBS’s available cash, the provisions of the agreement between
Siebert and the principals and SBS’s continued compliance with its regulatory
net capital requirements. |
| 7. | SBS
Financial Products Company, LLC: |
| | The Company entered into
an Operating Agreement, effective as of April 19, 2005 (the “Operating
Agreement”), with the two individual principals of SBS (the “Principals”) for
the formation of SBS Financial Products Company, LLC, a Delaware limited
liability company (“SBSFPC”). Pursuant to the terms of the Operating
Agreement, the Company and each of the Principals made an initial capital
contribution of $400,000 in exchange for a 33.33% initial interest in SBSFPC.
SBSFPC engages in derivatives transactions related to the municipal
underwriting business. The Operating Agreement provides that profit will be
shared 66.66% by the Principals and 33.33% by the Company. |
| | The Company’s share of
undistributed earnings of SBSFPC amounts to $438,000 and $837,000 at March
31, 2008 and 2007, respectively. |
| | Summarized financial data
of SBSFPC as of and for the three months March 31, 2008 and 2007 is set forth
below. (Loss) income from SBSFPC is considered to be integral to the
Company’s operations and material to the results of operations. |

Total assets	2008 — $ 118,229,000	$	42,341,000
Total liabilities	115,716,000		38,629,000
Total members’ capital	2,513,000		3,712,000
Total revenues	88,000		184,000
Net (loss) income	(28,000	)	7,000

| 8. |
| --- |
| Siebert terminated the
fully disclosed clearing agreement (the “Clearing Agreement”) with Pershing
LLC (formerly the Pershing division of Donaldson, Lufkin & Jenrette
Securities Corporation) (“Pershing”) in 2003. Based on consultation with
counsel, Siebert believes that the $1,500,000 that it advanced to Pershing in
January 2003 should have been returned and that Pershing may be liable for
damages. Pershing expressed its belief that it was entitled to retain the
advance and receive a |

7

| minimum of $3 million for its unreimbursed
costs, a termination fee of $500,000 and $5 million for lost revenues.
Siebert received a release for the $3 million related to disputed claims for
unreimbursed fees and costs via a Limited Release in 2005. In 2004, Siebert
decided not to commence proceedings against Pershing and charged off the
$1,500,000 advance to Pershing. Siebert believes the Pershing claims are
without merit and that the ultimate outcome of this matter will not have a
material adverse effect on the Company’s results of operations or financial
position. |
| --- |
| The Company is involved in
various routine lawsuits of a nature deemed by the Company customary and
incidental to its business. In the opinion of management, the ultimate
disposition of such actions will not have a material adverse effect on its
financial position or results of operations. |

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

This discussion should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2007, and our unaudited Consolidated Financial Statements and the Notes thereto contained elsewhere in this Quarterly Report.

Business Environment

The stock markets posted new lows in the first quarter 2008 as a result of the anxiety surrounding the housing crisis and the health of the financial services companies. Competition in the brokerage industry remains intense.

Like other securities firms, we are directly affected by general economic and market conditions including fluctuations in volume and prices of securities, changes and prospects for changes in interest rates and demand for brokerage and investment banking services, all of which can affect our relative profitability. In periods of reduced market activity, profitability is likely to be adversely affected because certain expenses, including salaries and related costs, portions of communications costs and occupancy expenses remain relatively fixed. Earnings or loss, for any period should not be considered representative of any other period.

Recent Developments

On January 22, 2008, our Board of Directors authorized a buy back of up to 300,000 shares of common stock. Shares will be purchased from time to time in the open market and in private transactions.

Critical Accounting Policies

We generally follow accounting policies standard in the brokerage industry and believe that our policies appropriately reflect our financial position and results of operations. Our management makes significant “estimates” that effect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contigent assets and liabilities included in the financial statements. The estimates relate primarily to revenue and expense items in the normal course of business as to which we receive no confirmations, invoices, or other documentation at the time the books are closed for a period. We use our best judgment, based on our knowledge of these revenue transactions and expenses incurred, to estimate the amounts of such revenue and expense. We are not aware of any material differences between the estimates used in closing our books for the last five years and the actual amounts of revenue and expenses incurred when we subsequently receive the actual confirmations, invoices or other documentation. Estimates are also used in determining the useful lives of intangible assets, and the fair market value of intangible assets. Our management believes that its estimates are reasonable.

8

Results of Operations

We believe that our business is performing relatively well, given the current business environment for discount, online and institutional brokers. We had a net loss of $128,000 for the three months ended March 31, 2008 compared to net income of $985,000 for the three months ended March 31, 2007.

Total revenues for the three months ended March 31, 2008 were $7.9 million, a decrease of $175,000 or 2.2% from the same period in 2007.

Commission and fee income for the three months ended March 31, 2008 was $6.2 million, a decrease of $360,000 or 5.5% from the same period in 2007 due to a decrease in commissions generated from institutional trading, fees from margin debits due to lower margin debit balances and lower rates and retail customer commissions. Retail customer volumes increased however the average commission charged per trade decreased due to more retail customer executing trades online via the internet which has a lower commission charge per ticket.

Investment banking revenues for the three months ended March 31, 2008 were $1.3 million, an increase of $294,000 or 30.5% from the same period in 2007 due to our participation in more new issues in the debt and equity markets.

Trading profits were $39,000 for the three months ended March 31, 2008, a decrease of $59,000 or 60.2% from the same period in 2007 due to a mark to market of our securities owned position.

Interest and dividends for the three months ended March 31, 2008 were $400,000, a decrease of $50,000 or 11.1% from the same period in 2007 primarily due to lower interest rates.

Total expenses for the three months ended March 31, 2007 were $8.0 million, an increase of $715,000 or 9.8% from the same period in 2007.

Employee compensation and benefit costs for the three months ended March 31, 2008 was $3.3 million, an increase of $196,000 or 6.4% for the same period in 2007. This increase was due to an increase in commissions paid based on production, hiring of new sales traders and employee health benefits offset by a decrease in bonus accruals.

Clearing and floor brokerage costs for the three months ended March 31, 2008 were $1.6 million, an increase of $169,000 or 12.0% from the same period in 2007 due to an increase in volume of trade executions for retail customers and commission recapture operations offset by a decrease in listed floor executions for institutional customers.

Professional fees were $1.2 million for the three months ended March 31, 2008, an increase of $153,000, or 14.8% for the same period in 2007 due to an increase in consulting fees relating to the commission recapture business, compliance with Sarbanes-Oxley and consultants assisting with the development of the front end system.

Advertising and promotion expenses for the three months ended March 31, 2008 were $303,000, a decrease of $45,000 or 12.9% from the same period in 2007 primarily due to the reduction of print advertising in 2008.

9

Communications expense for the three months ended March 31, 2008, was $644,000, an increase of $259,000 or 67.3% from the same period in 2007 primarily due to an increase in costs associated with our new website.

Occupancy costs for the three months ended March 31, 2008 were $326,000, an increase of $13,000 or 4.2% from the same period in 2007 due to an increase in rents in the Florida branches.

Other general and administrative expenses were $715,000, a decrease of $30,000 or 4.0% from the same period in 2007 primarily due to a decrease in placement fees, travel and entertainment, depreciation and amortization and printing costs offset by increases in repairs made to our new West Palm Beach office.

Loss from Siebert’s equity investment in Siebert Brandford Shank & Co., LLC, an entity in which Siebert holds a 49% equity interest (“SBS”), for the three months ended March 31, 2008 was $47,000 compared to income of $932,000, from the same period in 2007. This decrease was due to SBS participating in fewer managed and co-managed transactions. SBS serves as an underwriter for municipal bond offerings. Loss from our equity investment in SBS Financial Products Company, LLC, an entity in which we hold a 33% equity interest (“SBSFPC”) for the three months ended March 31, 2008, was $9,000 as compared to income of $2,000 from the same period in 2007. This decrease is due to a decrease in the number of transactions during the period. SBSFPC engages in derivatives transactions related to the municipal underwriting business. Income and loss from equity investees is considered to be integral to our operations and material to the results of operations.

For the three months ended March 31, 2008 we recorded a benefit for taxes of $54,000 due to our loss before taxes of $182,000 and for the three months ended March 31, 2007 we recorded a provision of $714,000 due to our income before tax of $1,699,000.

Liquidity and Capital Resources

Our assets are highly liquid, consisting generally of cash, money market funds and commercial paper. Our total assets at March 31, 2008 were $47 million. As of that date, $36 million, or 76%, of our total assets were regarded by us as highly liquid.

Siebert is subject to the net capital requirements of the SEC, the NYSE and other regulatory authorities. At March 31, 2008, Siebert’s regulatory net capital was $29.1 million, $28.9 million in excess of its minimum capital requirement of $250,000.

We also intend to acquire shares of our common stock pursuant to our share buy back program.

Siebert has entered into a Secured Demand Note Collateral Agreement with SBS under which it is obligated to lend to SBS up to $1.2 million pursuant to a secured promissory note on a subordinated basis. Amounts pledged by Siebert under the facility are reflected on our balance sheet as “cash equivalents – restricted”. SBS pays Siebert interest on this amount at the rate of 8% per annum. The facility expires on August 31, 2008, at which time SBS is obligated to repay to Siebert any amounts borrowed by SBS thereunder.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Working capital is generally temporarily invested in dollar denominated money market funds and United States Treasury Bills. These investments are not subject to material changes in value due to interest rate movements.

10

In the normal course of its business, Siebert enters into transactions in various financial instruments with off-balance sheet risk. This risk includes both market and credit risk, which may be in excess of the amounts recognized in our financial statements. Retail customer transactions are cleared through clearing brokers on a fully disclosed basis. If customers do not fulfill their contractual obligations, the clearing broker may charge Siebert for any loss incurred in connection with the purchase or sale of securities at prevailing market prices to satisfy the customers’ obligations. Siebert regularly monitors the activity in its customer accounts for compliance with its margin requirements. Siebert is exposed to the risk of loss on unsettled customer transactions if customers and other counterparties are unable to fulfill their contractual obligations.

Item 4T. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of Securities Exchange of 1934, as amended. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures are effective to ensure that the information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to ensure that information required to be disclosed is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding timely disclosure.

There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

11

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in various routine lawsuits of a nature we deemed to be customary and incidental to our business. In the opinion of management, the ultimate disposition of such actions will not have a material adverse effect on its financial position or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2007, which could materially affect our business, financial position and results of operations. There are no material changes from the risk factors set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2007.

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

On May 15, 2000, our Board of Directors authorized a buy back of up to one million shares of our common stock. Under this program, shares are purchased from time to time, at our discretion, in the open market and in private transactions. No purchases of common stock were made under this program during the first quarter of 2008. We have purchased 999,500 shares of our common stock under this program and an additional 500 shares of our common stock may be purchased under this program.

On January 22, 2008, our Board of Directors authorized the repurchase of up to 300,000 shares of our common stock. Shares will be purchased from time to time, in our discretion, in the open market and in private transactions. We intend to continue acquiring shares pursuant to our stock repurchase program based upon the price of the stock and in accordance with applicable rules and regulations. No purchases of our common stock were made under this program during the first quarter of 2008.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits

| 31.1 | Certification
of Muriel F. Siebert pursuant to Exchange Act Rules 13a-14 and 15d-14, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| --- | --- |
| 31.2 | Certification
of Joseph M. Ramos, Jr. pursuant to Exchange Act Rule 13a-14 and 15d-14, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |

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| 32.1 | Certification
of Muriel F. Siebert of Periodic Financial Report under Section 906 of the
Sarbanes-Oxley Act of 2002. |
| --- | --- |
| 32.2 | Certification
of Joseph M. Ramos, Jr. of Periodic Financial Report under Section 906 of the
Sarbanes-Oxley Act of 2002. |

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| SIEBERT
FINANCIAL CORP. | |
| --- | --- |
| By: | /s/ Muriel F. Siebert |
| | Muriel F.
Siebert |
| | Chairwoman
and President |
| | (principal
executive officer) |
| Dated: May
15, 2008 | |
| By: | /s/ Joseph M. Ramos, Jr. |
| | Joseph M.
Ramos, Jr. |
| | Executive
Vice President and Chief Financial Officer |
| | (principal
financial and accounting officer) |
| Dated: May
15, 2008 | |

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