SIEBERT FINANCIAL CORP — Proxy Solicitation & Information Statement 2008

Apr 25, 2008

DEF 14A 1 siebert_nps.htm DEFINITIVE PROXY STATEMENT

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [x] Filed by a Party other than the Registrant [] Check the appropriate box: [] Preliminary Proxy Statement [] Soliciting Material Under Rule [] Confidential, For Use of the 14a-12 Commission Only (as permitted by Rule 14a-6(e)(2)) [x] Definitive Proxy Statement [_] Definitive Additional Materials

SIEBERT FINANCIAL CORP. ------------------------------------------------------------------------------------------------------------------------------------------------------

(Name of Registrant as Specified In Its Charter)

---

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box): [x] No fee required. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies: ____________ 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: ____________ 5) Total fee paid: [] Fee paid previously with preliminary materials: [] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. ____________ 1) Amount previously paid: ____________ 2) Form, Schedule or Registration Statement No.: ____________ 3) Filing Party: ____________ 4) Date Filed:

SIEBERT FINANCIAL CORP. 885 Third Avenue, Suite 1720 New York, New York 10022 (212) 644-2400

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 3, 2008

Dear Shareholders:

Notice is hereby given of the Annual Meeting of Shareholders of Siebert Financial Corp., a New York corporation, at The Harmonie Club, 4 East 60th Street, New York, New York, on Tuesday, June 3, 2008 at 10:00 a.m., local time. The meeting’s purpose is to:

1. Elect six directors; and

2. Consider any other matters that are properly presented at the Annual Meeting and any adjournment thereof.

You may vote at the Annual Meeting if you were one of our shareholders of record at the close of business on Monday, April 21, 2008.

Along with the attached Proxy Statement, we are also enclosing a copy of our Annual Report to Shareholders, which includes our financial statements.

To assure your representation at the meeting, please vote, sign and mail the enclosed proxy as soon as possible. We have enclosed a return envelope, which requires no postage if mailed in the United States. Your proxy is being solicited by the Board of Directors. Shareholders who attend the meeting may revoke their proxy and vote their shares in person.

PLEASE VOTE—YOUR VOTE IS IMPORTANT

Secretary
New York, New
York
April 25,
2008

SIEBERT FINANCIAL CORP. 885 Third Avenue, Suite 1720 New York, New York 10022 (212) 644-2400

PROXY STATEMENT FOR THE 2008 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 3, 2008

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

| Annual
Meeting: | The Harmonie
Club |
| --- | --- |
| 10:00 a.m.,
local time | 4 East 60th
Street |
| | New York,
New York |

| Record Date: | Close of business on Monday, April 21,
2008. If you were a shareholder at that time, you may vote at the meeting.
Each share is entitled to one vote. On the record date, we had 23,214,132
shares of our common stock outstanding and entitled to vote. Of those
shares, 19,878,700 shares were beneficially owned or controlled by Muriel
Siebert, our Chairwoman, President and Chief Executive Officer, and one of
our directors. |
| --- | --- |
| Quorum: | The holders of a majority of the
outstanding shares of our common stock, present in person or by proxy and
entitled to vote, will constitute a quorum at the meeting. Abstentions and
broker non-votes will be counted for purposes of determining the presence
or absence of a quorum. |

Agenda:	Elect six directors.
2.	Any other proper business. However, we
currently are not aware of any other matters that will come before the
meeting.

| Vote Required: | The six nominees for director who
receive the most votes will be elected. If you withhold authority to vote
for any nominee on your proxy card, your vote will not count either for or
against the nominee. |
| --- | --- |
| Broker Non-votes: | If you hold your common stock through a
nominee, generally the nominee may vote the common stock that it holds for
you only in accordance with your instructions. Brokers who are members of
the Financial Industry Regulatory Authority may not vote shares held by
them in nominee name unless they are permitted to do so under the rules of
any national securities exchange to which they belong. Under New York
Stock Exchange rules, a member broker that has transmitted proxy
soliciting materials to a beneficial owner may vote on matters that the
New York Stock Exchange has determined to be routine if the beneficial
owner has not provided the broker with voting instructions within ten days
of the meeting. If a nominee cannot vote on a particular matter because it
is not routine, there is a “broker non-vote” on that matter. Broker
non-votes count for quorum purposes, but we do not count broker non-votes
as votes for or against any proposal. |

| Proxies: | Please vote; your vote is important.
Prompt return of your proxy will help avoid the costs of re-solicitation.
Unless you tell us on the proxy card to vote differently, we will vote
signed returned proxies “FOR” each of the Board of Directors’ nominees for
director. If any nominee cannot or will not serve
as a director, your proxy will vote in accordance with his or her best
judgment. At the time we began printing this proxy statement, we did not
know of any matters that needed to be acted upon at the meeting other than
those discussed in this proxy statement. However, if any additional
matters are presented to the shareholders for action at the meeting, your
proxy will vote in accordance with his or her best
judgment. |
| --- | --- |
| Proxies Solicited By: | The Board of Directors. |
| Revoking Your Proxy: | You may revoke your proxy before it is voted at the
meeting. Proxies may be revoked if you: |

| 1. | deliver a signed, written revocation
letter, dated later than the proxy to be revoked, to Daniel Iesu,
Secretary, Siebert Financial Corp., 885 Third Avenue, Suite 1720, New
York, New York 10022; |
| --- | --- |
| 2. | deliver a signed proxy, dated later than
the first proxy, to Mr. Iesu at the address above; or |
| 3. | attend the Annual Meeting and vote in person or by proxy.
Attending the meeting without doing more will not revoke your proxy. |

| Cost of Solicitation: | We will pay all costs of soliciting
these proxies, estimated at $3,500 in the aggregate. Although we are
mailing these proxy materials, our directors, officers and employees may
also solicit proxies by telephone, facsimile, mail or personal contact.
These persons will receive no compensation for their services, but we may
reimburse them for reasonable out-of-pocket expenses. We will also furnish
copies of solicitation materials to fiduciaries, custodians, nominees and
brokerage houses for forwarding to beneficial owners of our shares of
common stock held in their names, and we will reimburse them for
reasonable out-of-pocket expenses. Broadridge Financial Solutions, Inc. is
assisting us in the solicitation of proxies for the meeting for no
fee. |
| --- | --- |
| Your Comments: | Your comments about any aspects of our
business are welcome. Although we may not respond on an individual basis,
your comments help us to measure your satisfaction, and we may benefit
from your suggestions. |

2

PROPOSAL 1

ELECTION OF DIRECTORS

Generally: Our Board of Directors nominated six directors for election at the annual meeting. All the nominees for election as director are currently serving as our directors. All the nominees have consented to be named and have indicated their intent to serve if elected. If elected, each director will hold office until the next annual meeting or until the director’s successor has been duly elected. All our directors, other than Ms. Siebert, are “independent” within the meaning of Rule 4200(a)(15) of The Nasdaq Stock Market.

| Nominees: | Muriel Siebert has been Chairwoman,
Chief Executive Officer, President and a director of Muriel Siebert &
Co., Inc. since 1967 and of Siebert Financial Corp. since November 8, 1996. On December 28, 1967, Ms. Siebert became
the first woman member of the New York Stock Exchange. Ms. Siebert served
as Superintendent of Banks of the State of New York from 1977 to 1982. She
is a director of the New York State Business Council, and the Greater New
York Council of the Boy Scouts of America. Ms. Siebert until recently was
on the executive committee of the Economic Club of New York and formerly
served on the New York State Commission on Judicial Nomination, which is
involved in the selection of Associate Judges for the Court of Appeals. |
| --- | --- |
| PATRICIA L.
FRANCY Age 62 | Patricia Francy retired as Special
Advisor for Alumni Relations at Columbia University on December 31, 2005.
She had served in such position since January 1, 2004 and was Treasurer
and Controller of Columbia University from 1989 until 2003. Ms. Francy had
been affiliated with Columbia University since 1968, and has served as a
Director of Finance and Director of Budget Operations. Ms. Francy is also
a director of Old Westbury Funds, Inc. Ms. Francy became a director on
March 11, 1997. |

3

| LEONARD M. LEIMAN Age 76 | Leonard Leiman is of counsel to the law
firm of Fulbright & Jaworski L.L.P., New York, New York. Fulbright
& Jaworski L.L.P. provides legal services to us. Prior to becoming of
counsel in 2002, Mr. Leiman was a partner in Fulbright & Jaworski
L.L.P. for more than the preceding five years. Mr. Leiman became a
director on May 2, 2002. |
| --- | --- |
| JANE H. MACON Age 61 | Jane Macon is a partner with the law
firm of Fulbright & Jaworski L.L.P., San Antonio, Texas. Fulbright
& Jaworski L.L.P. provides legal services to us. Ms. Macon became a
director on November 8, 1996. |
| ROBERT P.
MAZZARELLA Age 61 | Robert Mazzarella retired from Fidelity
Investments Brokerage Services LLC in January 2002, at which time he
served as its president. Mr. Mazzarella presently serves as a director of
Placemark Investments, a registered investor adviser in Wellesley,
Massachusetts, M&O, a financial services recordkeeping firm, as a
director to Pyxis Mobile in Waltham, Massachusetts, as a member of the
Board of Governors of the Boston Stock Exchange and as the Regulatory
Board Chairman of the Boston Options Exchange. Mr. Mazzarella also acts as
a consultant to a number of major financial services firms and venture
capital firms. Mr. Mazzarella became a director on March 1,
2004. |
| NANCY S. PETERSON Age 74 | Nancy Peterson is the President,
Chairwoman and Chief Executive Officer of Peterson Tool Company, Inc. Ms.
Peterson became a director on June 4, 2001. |

4

Vote Required: The six nominees for director who receive the most votes will be elected. The enclosed proxy allows you to vote for the election of all the nominees listed, to withhold authority to vote for one or more of the nominees or to withhold authority to vote for all the nominees. If you withhold authority to vote for any nominee on your proxy card, your vote will not count either for or against the nominee. The persons named in the enclosed proxy intend to vote “FOR” the election of all the nominees. Each of the nominees currently serves as a director and has consented to be nominated. We do not foresee that any of the nominees will be unable or unwilling to serve, but if such a situation should arise, your proxy will vote in accordance with his or her best judgment.

THE BOARD DEEMS THIS PROPOSAL TO BE IN THE BEST INTEREST OF SIEBERT FINANCIAL CORP. AND ITS SHAREHOLDERS AND RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.

5

CORPORATE GOVERNANCE

| Board Meetings: | In 2007, the Board of Directors held
five meetings. Each incumbent director attended at least 75% of his or her
Board of Directors meetings and all of his or her committee
meetings. |
| --- | --- |
| Controlled Company: | We are a “Controlled Company” as defined
in Rule 4350(c)(5) of the Nasdaq Stock Market because Muriel Siebert holds
more than 50% of our voting power. As a “Controlled Company” we are not
required to have a majority of our Board of Directors comprised of
independent directors, a compensation committee comprised solely of
independent directors or a nominating committee comprised solely of
independent directors. |
| Audit Committee of
the Board of
Directors: | The Audit Committee held four meetings
during 2007. The Audit Committee of our Board of Directors currently
consists of Ms. Francy, Chairwoman, Mr. Mazzarella, and Ms. Peterson. The
Board of Directors has determined that Ms. Francy, Mr. Mazzarella, and Ms.
Peterson are “independent” within the meaning of Rule 4200(a)(15) of The
Nasdaq Stock Market and within the meaning of the applicable rules and
regulations of the Securities and Exchange Commission. The Board of Directors has adopted a
written charter for the Audit Committee, a copy of which is attached as
Annex A to this proxy statement. A copy of the charter is also available
on our website at www.siebertnet.com. The Board of Directors has
determined that Mr. Mazzarella qualifies as an “audit committee financial
expert” under the applicable rules of the Securities and Exchange
Commission. The Audit Committee was established to
(i) assist the Board of Directors in its oversight responsibilities
regarding the integrity of our financial statements, our compliance with
legal and regulatory requirements and our auditor’s qualifications and
independence, (ii) prepare the report of the Audit Committee contained
herein, (iii) retain, consider the continued retention and terminate our
independent auditors, (iv) approve audit and non-audit services performed
by our independent auditors and (v) perform any other functions from time
to time delegated by the Board of Directors. |
| Compensation Committee of the Board of Directors: | The Compensation Committee of our Board
of Directors currently consists of Ms. Macon, Chairwoman, Ms. Francy, Mr.
Mazzarella and Ms. Peterson. The Compensation Committee reviews and
determines all forms of compensation provided to our executive officers
and directors. The Compensation Committee also administers our stock
option and other employee benefit plans. The Compensation Committee does
not function pursuant to a formal written charter and as a “Controlled
Company” is not required to comply with The Nasdaq Stock Market’s
independence requirements. The Compensation Committee held four meetings
during 2007. |

6

| | The Compensation Committee generally
determines compensation of our executive officers (other than the Chief
Executive Officer) after carefully reviewing self-evaluations completed by
the executive officers, each executive officer’s business
responsibilities, current compensation, the recommendation of our Chief
Executive Officer and our financial performance. The Compensation
Committee evaluates the performance of the Chief Executive Officer in
terms of our operating results and financial performance and determines
her compensation in connection therewith. For the 2007 fiscal year, our
Chief Executive Officer requested that her cash compensation be limited to
$150,000. The Compensation Committee determined that the cash compensation
for the Chief Executive Officer be $150,000 for the 2007 fiscal year.
Except for the Chief Executive Officer, our executive officers do not play
a role in their own compensation decision. |
| --- | --- |
| Nominating Committee of the Board
of Directors: | The Nominating Committee of the Board of
Directors currently consists of Ms. Peterson, Chairwoman, Ms. Siebert, Ms.
Francy and Ms. Macon. The Nominating Committee does not function pursuant
to a formal written charter and as a “Controlled Company” is not required
to comply with The Nasdaq Stock Market’s independence requirements. The
Nominating Committee was formed in January 2004 and did not meet in 2007.
The Nominating Committee acted once in 2008 with respect to the
recommendation to the Board of Directors of the nomination of each of the
directors for re-election at the 2008 Annual Meeting of
Shareholders. The purpose of the Nominating Committee
is to identify individuals qualified to become members of our Board of
Directors and to recommend to the Board of Directors or the shareholders
that such individual be selected for directorship. In identifying and
evaluating nominees for director, the Nominating Committee considers each
candidate’s experience, integrity, background and skills as well as other
qualities that the candidate may possess and factors that the candidate
may be able to bring to the Board of
Directors. |

7

| | The Nominating Committee will consider
shareholder nominees for election to our Board of Directors. In evaluating
such nominations, the Nominating Committee will use the same selection
criteria the Nominating Committee uses to evaluate other potential
nominees. Any shareholder wishing to recommend a director candidate for
consideration by the Nominating Committee must do so by sending written
notice to our Secretary at 885 Third Avenue, Suite 1720, New York, New
York 10022, no later than January 2, 2009, such notice must include the
recommended candidate’s name, experience, qualifications and biographical
data, as well as, information as to whether such candidate would qualify
as “independent” within the meaning of Rule 4200(a)(15) of The Nasdaq
Stock Market and the applicable rules and regulations of the Securities
and Exchange Commission or as an “audit committee financial expert” under
applicable rules and regulations of the Securities and Exchange
Commission. The submission must be accompanied by a written consent by the
nominee to stand for election if nominated by the Board of Directors and
to serve if elected by the shareholders and a representation that the
information with respect to such nominee is truthful and
accurate. |
| --- | --- |
| Indemnification of Officers and
Directors: | We indemnify our executive officers and
directors to the extent permitted by applicable law against liabilities
incurred as a result of their service to us and against liabilities
incurred as a result of their service as directors of other corporations
when serving at our request. We have a director’s and officer’s liability
insurance policy, underwritten by National Union Fire Insurance Company of
Pittsburgh, PA, in the annual aggregate amount of $10 million. As to
reimbursements by the insurer of our indemnification expenses, the policy
has a $350,000 deductible; there is no deductible for covered liabilities
of individual directors and officers. |
| Annual Shareholders Meeting
Attendance Policy: | It is the policy of our Board of
Directors that all of our directors are strongly encouraged to attend each
annual shareholders meeting. All of our directors attended the 2007 annual
meeting of shareholders. |
| Code of Ethics: | We have adopted a Code of Ethics for
Senior Financial Officers applicable to our chief executive officer, chief
financial officer, treasurer, controller, principal accounting officer,
and any of our other employees performing similar functions. A copy of the
Code of Ethics for Senior Financial Officers is available on our website
at www.siebertnet.com. |

8

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

Management Ownership: The following table lists share ownership of our common stock as of April 15, 2008. The information includes beneficial ownership by each of our directors, the persons named in the Summary Compensation Table, all directors and executive officers as a group and beneficial owners known by our management to hold at least 5% of our common stock. To our knowledge, each person named in the table has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by such person. Any information in the table on beneficial owners known by management to hold at least 5% of our common stock is based on information furnished to us by such persons or groups and statements filed with the Securities and Exchange Commission.

| Name of Beneficial
Owner(1) | | Percent of Class |
| --- | --- | --- |
| Muriel F. Siebert | 20,628,700 (2) | 86.1% |
| Ameen
Esmail | 20,000 (3) | * |
| Joseph M. Ramos, Jr. | 5,000 (3) | * |
| Jeanne M.
Rosendale | 20,000 (4) | * |
| Daniel Iesu | 40,000 (3) | * |
| Patricia L.
Francy | 41,000 (5) | * |
| Leonard M. Leiman | 42,000 (5) | * |
| Jane H.
Macon | 41,500 (5) | * |
| Robert P. Mazzarella | 80,000 (3) | * |
| Nancy S.
Peterson | 40,000 (3) | * |
| Directors and current executive officers as a group (10
persons) | 20,958,200 (6) | 86.3% |

---

*	Less than 1%
(1)	The address for each person named
in the table is c/o Siebert Financial Corp., 885 Third Avenue, Suite 1720,
New York, New York 10022.
(2)	Includes an option to purchase
750,000 shares of our common stock which are currently
exercisable.
(3)	Represents options to purchase
shares of our common stock which are currently exercisable.
(4)	Represents an option to purchase
15,000 shares of our common stock which is currently exercisable and an
option to purchase 5,000 shares of our common stock exercisable within 60
days of April 15, 2008.
(5)	Includes options to purchase
40,000 shares of our common stock which are currently
exercisable.
(6)	Includes options to purchase an
aggregate of 1,075,000 shares of our common stock described above which
are currently exercisable or which are exercisable within 60 days of April
15, 2008.

9

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows, for the years ended December 31, 2007 and 2006, the annual compensation paid to or earned by (1) our CEO, and (2) each of the four most highly compensated individuals who were serving as our executive officers at December 31, 2007, collectively, the “Named Executive Officers”.

								Non-qualified
							Non-Equity	Deferred
				Stock	Option		Incentive
Plan	Compensation	All
Other
Name and
principal		Salary	Bonus	Awards	Awards		Compensation	Earnings	Compensation	Total
position	Year	($)	($)	($)	($) (1)		($)	($)	($)	($)
Muriel F. Siebert	2007	150,000	—	—	—		—	—	—	150,000
Chairwoman and President	2006	150,000	—	—	—		—	—	—	150,000
Joseph M. Ramos, Jr.	2007	195,000	100,000	—	—		—	—	—	295,000
Executive Vice President	2006	195,000	95,000	—	46,250	(2)	—	—	—	336,250
and Chief Financial Officer
Ameen Esmail	2007	185,000	90,000	—	—		—	—	—	275,000
Executive Vice President	2006	185,000	85,000	—	—		—	—	—	270,000
and Director of Business
Development
Jeanne M. Rosendale	2007	300,000	150,000	—	—		—	—	—	450,000
Executive Vice President	2006	300,000	145,000	—	—		—	—	—	445,000
and General Counsel
Daniel Iesu	2007	120,000	85,000	—	—		—	—	—	205,000
Secretary	2006	120,000	80,000	—	—		—	—	—	200,000

---

| (1) | Represents the dollar amount
recognized for financial statement reporting in accordance with FAS
123(R). |
| --- | --- |
| (2) | On August 17, 2006, Mr. Ramos was
granted an option to purchase 25,000 shares of our common stock at an
exercise price of $2.75 per share, the fair market value on the grant
date. This option vests as to 5,000 shares on each anniversary of the
grant date. |

10

Grants of Plan-Based Awards

Our Compensation Committee did not approve grants of options to purchase our common stock or other equity awards under our 2007 Long-Term Incentive Plan to any of our Named Executive Officers.

We are not party to an employment agreement with any of our Named Executive Officers. All of our Named Executive Officers are employed at-will. The salary and incentive amounts of our Named Executive Officers are disclosed in the Summary Compensation Table.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth the outstanding equity award holdings of our Named Executive Officers at December 31, 2007.

	OPTION AWARDS						STOCK AWARDS
										Equity
									Equity	Incentive
									Incentive	Plan
									Plan	Awards:
				Equity					Awards:	Market
or
				Incentive					Number
of	Payout
Value
				Plan
Awards:				Market	Unearned	of
Unearned
	Number
of	Number of		Number
of			Number	Value
of	Shares,	Shares,
	Securities	Securities		Securities			of
Shares	Shares
or	Units
or	Units
or
	Underlying	Underlying		Underlying			or Units
of	Units
of	Other	Other
	Unexercised	Unexercised		Unexercised	Option	Option	Stock
That	Stock
That	Rights
That	Rights
That
	Options
(#)	Options (#)		Unearned	Exercise	Expiration	Have
Not	Have
Not	Have
Not	Have
Not
Name	Exercisable	Unexercisable		Options (#)	Price ($)	Date	Vested (#)	Vested ($)	Vested (#)	Vested (#)
Muriel F. Siebert	750,000	—		—	4.30	4/19/2012	—	—	—	—
Joseph M. Ramos,
Jr.	5,000	20,000	(1)	—	2.75	8/17/2016	—	—
Ameen Esmail	20,000	5,000	(2)	—	5.06	7/3/2013	—	—	—	—
Jeanne M.
Rosendale	15,000	10,000	(3)	—	4.75	5/4/2014	—	—	—	—
Daniel Iesu	40,000	—		—	5.33	2/27/2011	—	—	—	—

---

| (1) | These options vested as to 5,000
shares on August 17, 2007 and vest as to an additional 5,000 shares on
each of August 17, 2008, August 17, 2009, August 17, 2010 and August 17,
2011. This vesting schedule is accelerated upon a change of
control. |
| --- | --- |
| (2) | These options vested as to 5,000
shares on each of July 3, 2004, July 3, 2005, July 3, 2006 and July 3,
2007 and vest as to an additional 5,000 shares on July 3, 2008. This
vesting schedule is accelerated upon a change of control. |
| (3) | These options vested as to 5,000
shares on each of May 4, 2005, May 4, 2006, May 4, 2007 and vest as to an
additional 5,000 shares on each of May 4, 2008 and May 4, 2009. This
vesting schedule is accelerated upon a change of
control. |

11

Termination of Employment and Change-in-Control Arrangements

Employment Agreements . We are not a party to an employment agreement with any Named Executive Officer. All of our Named Executive Officers are employees at-will.

Option Agreements . The Option Agreements we entered into with each of Messrs. Esmail and Ramos and Ms. Rosendale provide that in the event of a Change of Control of our company (as defined below) the options shall immediately become fully exercisable. A Change of Control means the occurrence of (i) any consolidation or merger in which we are not the surviving entity or pursuant to which shares of our common stock are converted into cash, securities or other property, other than a consolidation or merger in which the holders of our common stock immediately prior to such consolidation or merger own not less than fifty percent of the total voting power of the surviving entity following the merger, (ii) any sale of all or substantially all of our assets, (iii) the approval by our shareholders of any plan of complete liquidation or dissolution or (iv) any person or entity becoming the owner of 50% or more of our common stock. All options to purchase our common stock issued to Ms. Siebert and Mr. Iesu have vested and are fully exercisable.

Compensation of Directors

During 2007, our non-employee directors received compensation for service on our Board of Directors. We do not compensate our employees or employees of our subsidiaries for service as directors. The chairs of the Board’s Audit and Compensation Committees each receive an additional annual fee of $10,000. On June 5, 2007, the Board of Directors authorized the payment of an additional annual fee of $10,000 to the Audit Committee Financial Expert. Directors’ fees are paid quarterly.

| | | | | | Change
in | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Fees | | | Non-Equity | Pension | | |
| | Earned | Stock | Option | Incentive
Plan | Compensation | All
Other | |
| | or Paid
in | Awards | Awards | Compensation | Earnings | Compensation | Total |
| Name | Cash ($) | ($) | ($) | ($) | ($) | ($) | ($) |
| Muriel F. Siebert (1) | — | — | — | — | — | — | — |
| Patricia L.
Francy (2) | 40,000 | — | — | — | — | — | 40,000 |
| Leonard M. Leiman | 30,000 | — | — | — | — | — | 30,000 |
| Jane H.
Macon (3) | 40,000 | — | — | — | — | — | 40,000 |
| Robert P. Mazzarella (4) | 35,000 | — | — | — | — | — | 35,000 |
| Nancy S.
Peterson | 30,000 | — | — | — | — | — | 30,000 |

---

| (1) | Ms. Siebert is the Chairwoman,
President and Chief Executive Officer and accordingly does not receive any
compensation for her services as a director. |
| --- | --- |
| (2) | Ms. Francy is the Chairwoman of
the Audit Committee. |
| (3) | Ms. Macon is the Chairwoman of
the Compensation Committee. |
| (4) | Mr. Mazzarella is the Audit
Committee Financial Expert. |

12

| Audit Committee Report
to Shareholders: | The Audit Committee has reviewed and
discussed with management the audited financial statements for the fiscal
year ended December 31, 2007. The Audit Committee has also discussed with
Siebert Financial’s independent registered public accounting firm the
matters required to be discussed by Statement on Auditing Standards No.
61, “Communications with Audit Committees,” including Siebert Financial’s
critical accounting policies and its interests, if any, in “off balance
sheet” entities. Additionally, the Audit Committee has received the
written disclosures and representations from the independent registered
public accounting firm required by Independence Standards Board Standard
No. 1, “Independence Discussions with Audit Committees,” and has discussed
with the independent registered public accounting firm the independent
registered public accounting firm’s independence. Based on the review and discussions
referred to within this report, the Audit Committee recommended to the
Board of Directors that the audited financial statements for fiscal year
ended December 31, 2007 be included in Siebert Financial Corp.’s Annual
Report on Form 10-K for filing with the Securities and Exchange
Commission. Audit Committee, Patricia L. Francy, Chairwoman Robert P.
Mazzarella Nancy S. Peterson |
| --- | --- |
| Section 16(a) Beneficial
Ownership Reporting Compliance: | Section 16(a) of the Exchange Act
requires our executive officers and directors and persons who beneficially
own more than 10% of our common stock to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange
Commission. These executive officers, directors and
shareholders are required by the Securities and Exchange Commission to
furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of the copies
of the forms furnished to us, we believe that during fiscal 2007 all
Section 16(a) filing requirements applicable to our executive officers,
directors and greater than 10% beneficial owners were complied with on a
timely basis. |

13

RELATIONSHIP WITH INDEPENDENT AUDITORS

Eisner LLP currently serves as our independent registered public accounting firm. A representative of Eisner LLP will be present at the Annual Meeting and will have an opportunity to make a statement if he or she desires to do so, and will respond to appropriate questions from shareholders.

Audit Fees

Audit Fees . The aggregate fees billed by Eisner LLP for professional services rendered for the audit of our annual financial statements and reviews of our quarterly financial statements were $151,000 and $134,000 for the years ended December 31, 2007 and December 31, 2006, respectively.

Tax Fees . The aggregate fees billed by Eisner LLP during the years ended December 31, 2007 and December 31, 2006 for tax planning services totaled $48,800 and $35,000, respectively.

All Other Fees. The aggregate fees billed by Eisner LLP during the year ended December 31, 2007 with respect to the audit of our 401(k) Plan and the review of our compliance with the terms and conditions of an agreement with a third party was $36,000. Eisner LLP did not perform any other services during the year ended December 31, 2006.

Eisner LLP did not perform any audit-related services during the years ended December 31, 2007 or December 31, 2006.

Our Audit Committee has determined that the services described above that were rendered by Eisner LLP are compatible with the maintenance of Eisner LLP independence from our management.

Pre-Approval Policy

The Audit Committee pre-approves all audit and non-audit services provided by our independent auditors prior to the engagement of the independent auditors with respect to such services. With respect to audit services and permissible non-audit services not previously approved, the Audit Committee has authorized the Chairwoman of the Audit Committee to approve such audit services and permissible non-audit services, provided the Chairwoman informs the Audit Committee of such approval at the next regularly scheduled meeting. All “Audit Fees” and “Tax Fees” set forth above were pre-approved by the Audit Committee in accordance with its pre-approval policy.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Review and Approval of Related Party Transactions

As set forth in our Amended and Restated Audit Committee Charter, the Audit Committee is responsible for reviewing and approving all related party transactions.

Our Code of Ethics for Senior Financial Officers, applicable to our chief executive officer, chief financial officer, controller, treasurer, principal accounting officer and other employees performing similar functions, provides that our Senior Financial Officers should endeavor to avoid any actual or potential conflict of interest between their personal and professional relationships and requires them to promptly report and disclose all material facts relating to their relationships or financial interests which give rise, directly or indirectly, to an actual or potential conflict of interest to the Audit Committee. The Code of Ethics also provides that no Senior Financial Officer should knowingly become involved in any actual or potential conflict of interest without the relationship or financial interest having been approved by the Audit Committee.

14

SHAREHOLDER PROPOSALS FOR THE 2009 ANNUAL MEETING AND COMMUNICATIONS

If you wish to submit proposals to be presented at the 2009 Annual Meeting of Shareholders, the proposals must be received by us no later than January 2, 2009 to be included in our proxy materials for that meeting.

The Board of Directors maintains a process for shareholders to communicate with the Board of Directors or individual directors as follows. Shareholders who wish to communicate with the Board of Directors or an individual director should direct written correspondence to our Secretary at our principal office at 885 Third Avenue, Suite 1720, New York, New York 10022. Any such communication must contain (i) a representation that the shareholder is a holder of record of our common stock, (ii) the name and address, as they appear on our books, of the shareholder sending such communication and (iii) the number of shares of our common stock that are beneficially owned by such shareholder. The Secretary will forward such communications to the Board of Directors or specified individual director to whom the communication is directed unless such communication is unduly hostile, threatening, illegal or similarly inappropriate, in which case the Secretary has the authority to discard the communication or take appropriate legal action regarding such communication.

OTHER MATTERS

The Board does not know of any other matters to be presented at the meeting. If any additional matters are properly presented to the shareholders for action at the meeting, the persons named in the enclosed proxies and acting thereunder will have discretion to vote on these matters in accordance with their own judgment.

YOU MAY OBTAIN A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WITHOUT CHARGE BY WRITING TO: DANIEL IESU, SECRETARY, SIEBERT FINANCIAL CORP., 885 THIRD AVENUE, SUITE 1720, NEW YORK, NEW YORK 10022 OR CALLING 800-872-0711.

Daniel
Iesu
Secretary
Dated: April 25,
2008

PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.

PLEASE VOTE—YOUR VOTE IS IMPORTANT

15

ANNEX A

SIEBERT FINANCIAL CORP. AUDIT COMMITTEE OF THE BOARD OF DIRECTORS AMENDED AND RESTATED CHARTER

This Charter identifies the purpose, composition, meeting requirements, committee responsibilities, annual evaluation procedures and investigations and studies of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Siebert Financial Corp. (the “Company”).

I. PURPOSE

The Committee has been established to: (a) assist the Board in its oversight responsibilities regarding (1) the integrity of the Company’s financial statements, (2) the Company’s compliance with legal and regulatory requirements and (3) the independent auditors’ qualifications and independence; (b) prepare the report required by the United States Securities and Exchange Commission (the “SEC”) for inclusion in the Company’s annual proxy statement; (c) retain, consider the continued retention and terminate the Company’s independent auditors; (d) approve audit and non-audit services to be performed by the independent auditors; and (e) perform such other functions as the Board may from time to time assign to the Committee. In performing its duties, the Committee shall seek to maintain an effective working relationship with the Board, the independent auditors and management of the Company.

II. COMPOSITION

The Committee shall have a minimum of three members appointed by the Board who serve until replaced by the Board. The Chairman of the Board shall designate the Chairman of the Committee. The Committee shall be comprised of members who meet the independence, experience and financial literacy requirements of The Nasdaq Stock Market, Inc., Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the SEC. All members of the Committee shall be able to read and understand fundamental financial statements and have a working familiarity with basic finance and accounting practices. The Board shall review these requirements on an annual basis to insure continued compliance by the members of the Committee.

Except for Board and Committee fees, after the Company’s 2004 Annual Stockholders’ Meeting a member of the Committee shall not be permitted to accept any fees paid directly or indirectly for services as a consultant, legal adviser or financial adviser or any other fees which would affect such Committee members’ independence under the rules of the SEC, the Sarbanes-Oxley Act of 2002 and The Nasdaq Stock Market. In addition, no member of the Committee may be an affiliated person of the Company or any of its subsidiaries. Members of the Committee may receive their Board and Committee fees in cash, Company stock or options or other in-kind consideration as determined by the Board or the Compensation Committee or other authorized committee of the Board, as applicable, in addition to all other benefits that other directors of the Company receive. No director may serve on the Committee, without the approval of the Board, if such director simultaneously serves on the audit committee of more than three public companies.

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III. MEETING REQUIREMENTS

The Committee shall meet as necessary, but at least quarterly, to enable it to fulfill its responsibilities. The Committee shall meet at the call of its Chairperson, preferably in conjunction with regular Board meetings. The Committee may meet by telephone conference call or by any other means permitted by law or the Company’s Bylaws. A majority of the members of the Committee shall constitute a quorum. The Committee shall act on the affirmative vote of a majority of members present at a meeting at which a quorum is present. Without a meeting, the Committee may act by unanimous written consent of all members. The Committee shall determine its own rules and procedures, including designation of a chairperson pro tempore, in the absence of the Chairperson, and designation of a permanent or pro tempore secretary. The secretary need not be a member of the Committee and shall attend Committee meetings and prepare minutes. The Committee shall keep written minutes of its meetings, which shall be recorded or filed with the books and records of the Company. Any member of the Board shall be provided with copies of such Committee minutes if requested.

The Committee may ask members of management, employees, outside counsel, the independent auditors or others whose advice and counsel are relevant to the issues then being considered by the Committee, to attend any meetings and to provide such pertinent information as the Committee may request.

The Chairperson of the Committee shall be responsible for leadership of the Committee, including preparing the agenda, presiding over Committee meetings, making Committee assignments and reporting the Committee’s actions to the Board from time to time (but at least once each year) as requested by the Board.

IV. COMMITTEE AUTHORITY, DUTIES AND RESPONSIBILITIES

The Company’s independent auditors shall report directly to the Committee. The Committee shall be directly responsible for, and have sole authority as to, the appointment, retention and termination, compensation and oversight of the work of the independent auditors, including resolution of disagreements between management and the auditors regarding accounting matters and financial reporting matters.

In addition to such other duties as the Board may from time to time assign, the Committee shall have the following responsibilities:

A. Oversight of the Financial Reporting Processes

1. In consultation with the independent auditors review the integrity of the organization’s financial reporting processes, both internal and external.

2. Review and approve all related-party transactions.

3. Consider the independent auditors’ judgments about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting. Consider any alternative accounting principles and estimates presented to it.

4. Annually review major issues regarding the Company’s auditing and accounting principles and practices and its presentation of financial statements, including the adequacy of internal controls and special audit steps adopted in light of material internal control deficiencies.

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1. Discuss with management and legal counsel the status of pending litigation, taxation matters, compliance policies and other areas of oversight applicable to the legal and compliance area as may be appropriate.

2. Meet at least annually with the chief financial officer and the independent auditors in separate executive sessions.

3. Review all analyses prepared by management and the independent auditors of significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including the effect of alternative treatments of financial information within generally accepted accounting principles (“GAAP”) on the Company’s financial statements.

4. Review with management and the independent auditors the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the Company’s financial statements.

5. Obtain from the independent auditors assurance that Section 10A of the Private Securities Litigation Reform Act of 1995 has not been implicated.

6. Discuss with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as modified or amended, relating to the conduct of the audit.

B. Review of Documents and Reports

1. Review and discuss with management and the independent auditors the Company’s annual audited financial statements and quarterly financial statements (including disclosures under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) prior to the release of these statements. These discussions shall include consideration of the quality of the Company’s accounting principles as applied in its financial reporting, including review of audit adjustments (whether or not recorded) and any such other inquiries as may be appropriate. Based on this review and prior to filing the Company’s annual report on Form 10-K, the Committee shall make its recommendation to the Board as to the inclusion of the Company’s audited consolidated financial statements in the Company’s annual report on Form 10-K.

2. Review and discuss with management and the independent auditors any financial reports or other financial information submitted to investors, including any certification, financial report, opinion or review rendered by the independent auditors. Consider, as appropriate, whether the information contained in these documents is consistent with the information contained in the financial statements and whether the independent auditors and legal counsel are satisfied with the disclosure and content of such documents.

3. Review and discuss with management and as appropriate, with the independent auditors, earnings press releases, if any, as well as financial information and earnings guidance provided to investors and rating agencies, prior to their release.

4. Review in meetings with management any correspondence that raises material issues regarding the Company’s financial statements or accounting policies received from, or sent to, regulators or government agencies and any employee complaints or published reports.

5. Prepare the report of the Committee required by the rules of the SEC to be included in the Company’s annual proxy statement.

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C. Independent Auditors Matters

1. Interview and retain the Company’s independent auditors, considering the accounting firm’s independence and effectiveness and determine the engagement fees and other compensation to be paid to the independent auditors.

2. Meet separately with each of the independent auditors and the Company’s financial management to review the scope of the proposed external audit for the current year.

3. Approve, in advance of the work being performed, the scope of all audit and permissible non-audit services of the independent auditors.

4. On an annual basis, the Committee shall evaluate the independent auditors’ qualifications, performance and independence. To assist in this undertaking, the Committee may request information and consider (a) the independent auditors’ internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the accounting firm or by any inquiry or investigations by governmental or professional authorities (within the preceding five years) respecting one or more independent audits carried out by the independent auditors, and any steps taken to deal with any such issues and (c) all relationships the independent auditors have with the Company and relevant third parties in order to determine the effect, if any, of such relationships on the independent auditors’ independence. In making its determination, the Committee shall consider not only auditing and other traditional accounting functions performed by the independent auditors, but also non-audit services performed or proposed to be performed.

5. The Committee shall also consider whether the provision of any of these non-audit services is compatible with the independence standards under the guidelines of the SEC and other applicable authorities (including, if pertinent, the Public Company Accounting Oversight Board).

6. Review on an annual basis the experience and qualifications of the senior members of the external audit team. Discuss the knowledge and experience of the independent auditors and the senior members of the external audit team with respect to the Company’s industry. The Committee shall ensure the regular rotation of the lead audit partner and audit review partner as required by law.

7. Review the performance of the independent auditors and their continued retention as the Company’s independent auditors.

8. Establish and periodically review the Company’s hiring policies relating to current or former employees of the independent auditors.

9. Review with the independent auditors any problems or difficulties the auditors may have encountered and any “management” or “internal control” letter provided by the independent auditors and the Company’s response to that letter. Such review should include:

(a) any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information and any disagreements with management; and

(b) any accounting adjustments that were proposed by the independent auditors that were not agreed to by the Company.

A-4

1. Communicate with the independent auditors regarding (a) alternative treatments of financial information consistent with GAAP, (b) critical accounting policies and practices to be used in preparing the audit report and (c) such other matters as the SEC and the Nasdaq Stock Market may direct by rule or regulation.

2. Periodically consult with the independent auditors out of the presence of management about internal controls and the fullness and accuracy of the organization’s financial statements.

3. Oversee the relationship with the independent auditors by discussing with the independent auditors the nature and rigor of the audit process, receiving and reviewing audit reports and ensuring that the independent auditors have full access to the Committee (and the Board) to report on any and all appropriate matters.

4. Review with the independent auditors prior to the audit the general planning, scope and staffing of the audit.

D. Audit Control Matters

1. Discuss with management policies with respect to risk assessment and risk management. Although it is management’s duty to assess and manage the Company’s exposure to risk, the Committee should discuss guidelines and policies to govern the process by which risk assessment and management is handled and review the steps management has taken to monitor and control the Company’s risk exposure.

2. Following completion of the annual external audit, review separately with each of management and the independent auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information.

3. Review with the independent auditors and management the extent to which changes or improvements in financial or accounting practices have been implemented. This review should be conducted at an appropriate time subsequent to implementation of changes or improvements, as decided by the Committee.

4. Periodically review and monitor compliance with the Company’s code of conduct.

5. Maintain procedures for receiving accounting complaints and concerns and anonymous submissions from employees and others regarding questionable accounting, internal controls or auditing matters.

6. Periodically discuss with the chief executive officer and chief financial officer (a) significant deficiencies in the design or operation of the internal controls that could adversely affect the Company’s ability to record, process, summarize and report financial data and (b) any fraud that involves management or other employees who have a significant role in the Company’s internal controls.

V. ANNUAL EVALUATION PROCEDURES

The Committee shall annually assess its own performance to confirm that it is meeting its responsibilities under this Charter. In this review, the Committee shall consider, among other things, (a) the appropriateness of the scope and content of this Charter, (b) the appropriateness of matters presented for information and approval, (c) the sufficiency of time for consideration of

A-5

agenda items, (d) frequency and length of meetings and (e) the quality of written materials and presentations. The Committee may recommend to the Board such changes to this Charter as the Committee deems appropriate.

VI. INVESTIGATIONS AND STUDIES

The Committee shall have the authority and sufficient funding to retain special legal, accounting or other consultants (without seeking Board approval) to advise the Committee. The Committee may conduct or authorize investigations into or studies of matters within the Committee’s scope of responsibilities as described herein, and may retain, at the expense of the Company, independent counsel or other consultants necessary to assist the Committee in any such investigations or studies. The Committee shall have sole authority to negotiate and approve the fees and retention terms of such independent counsel or other consultants.

VII.MISCELLANEOUS

Nothing contained in this Charter is intended to expand applicable standards of liability under statutory or regulatory requirements for the directors of the Company or members of the Committee. The purposes and responsibilities outlined in this Charter are meant to serve as guidelines rather than as inflexible rules and the Committee is encouraged to adopt such additional procedures and standards as it deems necessary from time to time to fulfill its responsibilities. It is not the duty of the Audit Committee to plan or conduct audits or determine if the financial statements are complete in accordance with GAAP nor is it its duty to conduct investigations or to assure compliance with applicable laws and regulations and the Company’s code of conduct. The Committee shall not duplicate the work of the independent auditors in auditing the Company’s financial statements or the role of management in preparing these financial statements. This Charter, and any amendments thereto, shall be displayed on the Company’s website and a printed copy of such shall be made available to any shareholder of the Company who requests it.

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SIEBERT FINANCIAL CORP. c/o American Stock Transfer 6201 15 th Avenue Brooklyn, NY 11219

| VOTE BY MAIL |
| --- |
| Mark, sign and date your proxy card and return it in the
postage-paid envelope we have provided or return it to Seibert Financial
Corp., c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717 |

MAIN Proxy card HERE

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
DETACH AND RETURN THIS PORTION
ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED.

ELECTION OF DIRECTORS
Nominees:	01) Muriel F.
Siebert
	02) Patricia L.
Francy
	03) Leonard M. Leiman
	04) Jane H.
Macon
	05) Robert P.
Mazzarella
	06) Nancy S.
Peterson

For All o Withhold All o For All Except o To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the name(s) of the nominee(s) for whom your vote is withheld on the line below.

| 2. |
| --- |
| UNLESS OTHERWISE SPECIFIED IN THE SPACES
PROVIDED, THE UNDERSIGNED'S VOTE WILL BE CAST FOR ALL NOMINEES LISTED IN
ITEM (1). |

o	o
Yes	No

Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

Please date, sign and mail your proxy card in the envelope provided as soon as possible.

ANNUAL MEETING OF SHAREHOLDERS OF SIEBERT FINANCIAL CORP.

June 3, 2008

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting. The Proxy Statement and Annual Report are available at www.proxyvote.com.

SIEBERT FINANCIAL CORP. PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 3, 2008

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Daniel Iesu and Patricia L. Francy, and each of them, the proxies of the undersigned, with power of substitution to each of them to vote all shares of Siebert Financial Corp. which the undersigned is entitled to vote at the Annual Meeting of Shareholders of Siebert Financial Corp. to be held Tuesday, June 3, 2008, at 10:00 A.M., eastern daylight time, and at any adjournments thereof.

UNLESS OTHERWISE SPECIFIED IN THE SPACES PROVIDED, THE UNDERSIGNED'S VOTE WILL BE CAST FOR ALL NOMINEES LISTED IN ITEM (1).

Address Changes:

(If you noted any Address Changes above, please mark corresponding box on the reverse side.)

(Continued and to be signed and dated on the reverse side )