EMPLOYMENT AGREEMENT

     AGREEMENT  effective  as of January 25, 1999 by and between  FIRST  MONTAUK
SECURITIES CORP., a New Jersey corporation with executive offices at Parkway 109
Office Center,  328 Newman Springs Road 07701-5698  (hereinafter  referred to as
the  "Employer")  and SETH  ROSEN with an  address  at 209  Williamsburg  Drive,
Shrewsbury, NJ 07702 (hereinafter referred to as the "Employee").

                              W I T N E S S E T H :

     WHEREAS,  the  Employer  desires to secure  for  itself the  benefit of the
Employee's background,  experience, ability and expertise as President of FMSC's
Century Discount Securities  Division,  Paramus NJ ("CDS") and Managing Director
of FMSC's Internet Trading Initiative, and is desirous of employing the Employee
to  perform  the  services  as set forth in this  Agreement  and under the terms
herein provided; and

     WHEREAS,  the  Employee is willing to provide his  background,  experience,
ability,  expertise as President of FMSC's Century Discount Securities Division,
Paramus NJ and Managing  Director of FMSC's  Internet  Trading  Initiative,  and
perform such services and accept such employment on the terms and conditions set
forth in this Agreement;

     NOW, THEREFORE,  in consideration of the premises and the mutual convenants
herein set forth, the parties hereto agree as follows:

1.       EMPLOYMENT AND SCOPE OF DUTIES

     A. Employer shall employ Employee and the Employee agrees to be employed by
the Employer on a full-time basis during the Employment  Period, as President of
FMSC's Century Discount Securities Division, Paramus NJ and Managing Director of
FMSC's  Internet  Trading  Initiative,  having  and  maintaining  the  requisite
licenses  and  registrations  in  order  to  effectively   supervise  Employer's
Registered Representatives located in the CDS Paramus office. The Employee shall
report and be responsible to: Herb Kurinsky,  the President and C.E.O.;  William
Kurinsky, Executive Vice President and Chief Financial Officer (CFO); and Robert
I.  Rabinowitz,  Chief  Administrative  Officer.  Employee  shall be expected to
coordinate  with and obtain  necessary  approvals  from General  Counsel and the
Legal & Compliance  Department on matters involving  compliance,  regulatory and
legal issues affecting CDS discount  brokerage business and Internet Trading for
clients of the Firm.  Employee shall, except during vacation periods or absences
due to  temporary  illness,  devote  substantially  all of  his  business  time,
attention  and energies to his duties and  responsibilities  as President of CDS
hereunder.

     B. Subject to the terms and  conditions  contained  herein,  Employee shall
also (i) provide  administrative  expertise,  product  knowledge,  technical and
systems  support  with  respect  to  the  development  and   implementation   of
third-party  vendor  provided  electronic-based  order entry and  clearing  firm
interfaces,  including risk management technology for FMSC's trading desk, CDS's
separate   trading  desk  and,  (ii)  supervise   structure,   manage,   control
expenditures  and operations of CDS through daily oversight of operations of CDS
staff including marketing,  registration and assurance of regulatory  compliance
by CDS;  and (iii)  from time to time,  perform  such other  services  and tasks
related to the foregoing as may be reasonably  necessary to the  performance  of
the above  duties  and  responsibilities,  including  reporting  to FMSC  Senior
Management with findings/recommendations to improve efficiencies of CDS and FMSC
Trading Capabilities and Employer hereby engages Employee to provide and perform
the same.


<PAGE>

     C. The Principal  locations of the  Employee's  employment  shall be at 328
Newman  Springs  Road,  Red Bank,  New Jersey  07701 and One Mack  Cnetre  Road,
Paramus, NJ 07652,  although the Employee  understands and agrees that he may be
required to travel for business  reasons to other  offices of FMSC and from time
to time to other Firm locations.

     D. Employer  hereby  agrees at its  discretion to provide the personnel and
administrative  support  services to Employee  necessary  for him to perform the
Services hereunder.

         2.       TERM

     The parties agree that this Agreement shall be terminable at will by either
party, and Employee shall commence  employment on or about January 25, 1999 (the
"Commencement  Date").  This Agreement shall terminate on the earlier of (i) the
mutual  agreement of Employer and Employee upon providing 90 days written notice
to the other party prior to the  termination  date, or (ii) the demand of either
party to terminate upon 90 days prior written notice.

         3.       COMPENSATION.

     (a).  For the  first  year of the  Employment  Period,  Employer  agrees to
compensate the Employee at an annual rate equal to $120,000.  Such sums shall be
paid to Employee by Employer in its regular payroll cycle.

     (b).  Employer also agrees to pay Employee a non guaranteed  Incentive Cash
Bonus  calculated  at ten (10%)  percent of Firm  retention  of the  increase in
profits,  (i.e., gross commissions,  interest and other related revenue,  net of
expenses),  generated by CDS over the '98 base year level of profit.  (Base year
increase).

     (c).  Employee  shall be entitled to receive  pursuant to Employer's  Stock
Option Plan,  an initial  grant of Incentive  Stock Options of 50,000 FMFK Stock
Options at an exercise price of $2.00. Said options shall be granted pursuant to
all terms and  conditions  of the  Company's  Incentive  Stock Option  Plan,  as
amended, and shall vest at the rate of 20% per year of continued employment with
the Employer.

     (e).  Employer  shall  pay the  cost  of  Employee's  licenses,  continuing
education requirements, and costs for E & O insurance coverage.

     (f).  Employer  shall  provide  Employee  with legal  counsel  selected  by
Employer in  connection  with the  defense of any  customer  initiated  claim or
regulatory action.

4.       REIMBURSEMENT OF EXPENSES.

     During the period of said  employment,  the Employer  shall  reimburse  the
Employee or pay directly on his behalf,  all reasonable and necessary  business,
travel and  entertainment  expenses  incurred  directly in  connection  with the
performance  of  Employee's  duties and in  furtherance  of the  business of the
Employer.  Employee shall not be reimbursed for any personal expenses or for any
business  expense in excess of $1,500.00  which has not been approved in writing
in advance by a Senior  Officer of  Employer.  Employee  shall  submit  periodic
(weekly or monthly) itemized expense reports for out-of-pocket business expenses
paid by the Employee and for which reimbursement is sought from Employer.

         5.       INSURANCE AND OTHER BENEFITS.

     (a).  Employee shall be eligible to  participate in Employer's  medical and
health  insurance  benefit  plans  which  are  currently   furnished  to  Senior
Executives;

     (b). Employee shall be eligible to participate in Employer's 401(k) Plan.

          6.       TERMINATION OF EMPLOYMENT.

     This  Agreement  creates  an  employment  at  will.  FMSC  may  voluntarily
terminate its employment  with Employee at any time and for any reason after the
date of this Agreement.  Employee may voluntarily terminate his association with
FMSC at any time and for any  reason  after the date of this  Agreement.  In the
event of a voluntary  termination of this Agreement by either party,  FMSC shall
have no  obligation  to pay  employee,  or his  estate,  or any other  person or
entity,  any  salary,  incentive  bonus  unreimbursed  reasonable  and  ordinary
business  expenses,  or  Incentive  Stock  Option  Grant  provided  for in  this
Agreement prior to the date of termination,  except as shall have been earned by
Employee to the effective date of termination.
<PAGE>

     In  addition  to  Paragraph  2, during the  Initial  Term,  the  Employee's
employment  may also be terminated  on the  occurrence of any one or more of the
following events:

                  (a)      The death of the Employee;

     (b) The  failure by the  Employee to  substantially  perform his duties and
responsibilities  as set forth  above,  owing to physical  or mental  incapacity
(hereinafter referred to as "disability"), which disability shall be as defined
under the  Company's  disability  insurance  policy and shall continue for more
than three (3) consecutive months.

     (c) For  "Cause",  which  shall mean:  (i) the  failure by the  Employee to
substantially  perform  his  duties  herein,  for  reasons  other  than death or
disability after written notice by Employer and a thirty (30) day period to cure
said  failure;  (ii) the  engaging by the  Employee  in a material,  intentional
breach of the Firm's Policies and Procedures or misconduct  materially injurious
to the Employer;  or (iii) the commission by the Employee of an act constituting
common law fraud or a felony or any other criminal offense.

     (d) In the event that Employee's  employment  hereunder  terminates for any
reason other than for reasons  indicated  in Paragraph  (c) i - iii, the Company
shall pay to Employee all amounts accrued but unpaid hereunder  through the date
of termination  in respect of Base Salary and  unreimbursed  business  expenses.
Employee's  Incentive  Bonus and Incentive Stock Option Grant shall be forfeited
by Employee in the event that he has failed to substantially  perform his duties
as set forth herein,  or is terminated for Cause.  Upon any  termination of this
Agreement,  all of the rights,  privileges and duties of the Employee  hereunder
shall cease,  except for his rights under this Paragraph 6(d) and his continuing
obligations to Employer under Paragraph 7 and 9 hereunder.

         7.       NO DISCLOSURE OF INFORMATION.

     (a) All memoranda,  notes,  records or other  documents made or compiled by
the  Employee  or made  available  to him  during  the  term  of his  employment
concerning  the  business  of the  Employer  shall be and remain the  Employer's
property and shall be delivered  by the Employee to Employer at  termination  of
Employee's  employment.  Employee shall not use for himself or others or divulge
to others, any proprietary or confidential information of the Employer, obtained
by him as a result of his employment,  unless  authorized in advance by a Senior
Officer of Employer.

     (b) Employee  hereby sells,  transfers  and assigns to Employer,  or to any
person  or  entity  designated  by the  Employer,  all of the  right,  title and
interest of Employee in and to all  inventions,  sales  approaches or materials,
software,  ideas,  training  materials,  disclosures and  improvements,  whether
patented or unpatented,  and  copyrightable  material,  made or conceived by the
Employee, solely or jointly, in whole or in part, during the Employee Term which
are not generally  known to the public or the industry or recognized as standard
practice and which (i) relate to services, trade marks or names, methods, ideas,
apparatus,  designs,  products,  processes,  procedures  or devices which may be
sold,  leased,  used or under  construction  or  development  by  Employer,  its
subsidiaries  or affiliates or any franchise  affiliated  with Employer and (ii)
arise (wholly or partly) from the effort of Employee  during his employment with
Employer  (hereinafter  collectively  referred to as an  "Invention").  Employee
shall  communicate  promptly and disclose to Employer,  in such form as Employer
requests,  all  information,  details and data pertaining to any such Invention.
Employee  hereby  irrevocably   appoints  the  Chief  Executive  Officer  and/or
Executive Vice President lawful attorney to execute and deliver, with respect to
any Invention,  such form of transfers and assignments and such other papers and
documents  as  reasonably  may be required  to permit  Employer or any person or
entity designated by Employer to file and prosecute patent  applications and, as
to copyrightable material, to obtain copyrights thereon.  Employer shall pay all
costs incident to the execution and delivery of such transfers,  assignments and
other  documents.  Any  Invention  by the  Employee  within  twelve  (12) months
following the  termination of this Agreement  shall be deemed to fall within the
provisions  of this  Section 7(b) unless  Employee  bears the burden of proof of
showing  that  the  Invention  was  first  conceived  and  made  following  such
termination.
<PAGE>

     (c) For purposes of this Section 7, the term  "proprietary  or confidential
information"  shall mean all  information  which is known only to Employee or to
Employee  and  employees,   former   employees,   consultants  or  others  in  a
confidential  relationship with Employer and relates to specific matters such as
trade  secrets,  customers,  potential  customers and vendor lists,  pricing and
credit techniques,  research and development  activities,  books and records and
private processes,  as they may exist from time to time, which Employee may have
acquired or obtained by virtue of work  heretofore or hereinafter  performed for
or on behalf of Employer or which he may acquire or may have acquired  knowledge
of during  the  performance  of said work,  and which is not known to other,  or
readily  available to others from sources other than Employee,  or is not in the
public  domain.  In the event of a breach or a threatened  breach by Employee of
the  provisions of this Section 7,  Employer  shall be entitled to an injunction
restraining  Employee from disclosing,  in whole or in part, the  aforementioned
proprietary  or  confidential  information  of Employer,  or from  rendering any
services to any person, firm,  corporation,  association or other entity to whom
such  proprietary  or  confidential  information,  in whole or in part, has been
disclosed or is threatened to be disclosed.  Nothing herein  contained  shall be
construed as prohibiting  Employer from pursuing any other remedies available to
Employer for such breach or threatened breach, including the recovery of damages
from Employee.

         8.       REPRESENTATIONS OF EMPLOYEE

     Employee  represents  and  warrants  to Employer  that he is not  currently
statutorily disqualified or restricted from becoming licensed or registered with
any state or NASD,  or of entering into this  Employment  Agreement by any other
enforceable agreement between Employee and any third party.


     9.       LIMITATION ON POWERS OF EMPLOYEE.

     Employee  understands  and  agrees  that he has no  power or  authority  to
conduct any Business for, with or through FMSC, or CDS, other than as granted by
this Agreement. Employee agrees that he will not hold himself out or purport, or
attempt to bind either FMSC or CDS in a manner inconsistent with this Agreement,
applicable  law,  rules or  regulations,  or FMSC Policies and Procedures or any
instruction or directive communicated to Employee.


<PAGE>

         10.      NOTICES.

     Any notices  required or permitted to be given under the provisions of this
Employment  Agreement  shall  be  in  writing  and  delivered  personally  or by
certified or registered mail, return receipt  requested,  postage prepaid to the
following  persons at the following  addresses,  or to such other person at such
other  address as any party may  request by notice in writing to the other party
to this Agreement:

         TO EMPLOYEE:

         SETH ROSEN
         209 Williamsburg Drive
         Shrewsbury, NJ  07702


         TO EMPLOYER:

         FIRST MONTAUK SECURITIES CORP.
         Parkway 109 Office Center
         328 Newman Springs Road
         Red Bank, New Jersey  07701
         Attn:  General Counsel

         11.      ARBITRATION

     Any and all  disputes or  controversies  arising out of or relating to this
Agreement or breach thereof,  shall be settled by arbitration under the auspices
of the NASD, Inc. in New York City, New York by a panel of three  arbitrators in
accordance  with  the  rules  then  pertaining  to the  NASD.  The  cost of such
arbitration proceeding shall be borne equally by the parties, each of whom shall
bear its or his own attorneys fees.

         12.      CONSTRUCTION.

     This  Employment  Agreement  shall be construed in accordance  with, and be
governed by, the laws of the State of New Jersey.

         13.      SUCCESSOR AND ASSIGNS.

     This Employment Agreement shall be binding on the successors and assigns of
the  Employer and shall inure to the benefit and be  enforceable  by and against
its successors and assigns.  This Employment Agreement is personal in nature and
may not be assigned or  transferred  by the Employee  without the prior  written
consent of the Corporation.

         14.      ENTIRE AGREEMENT.

     This instrument contains the entire understanding and agreement between the
parties  relating to the subject  matter  hereof,  and neither  this  Employment
Agreement nor any provision hereof may be waived,  modified,  amended,  changed,
discharged or terminated,  except by an agreement in writing signed by the party
against  whom  enforcement  of  any  waiver,  modification,  change,  amendment,
discharge or termination is sought.

         15.      COUNTERPARTS.

     This Employment  Agreement may be executed  simultaneously in counterparts,
each of which shall be deemed an original,  and all of which  counterparts shall
together constitute a single agreement.


<PAGE>

         16.      ILLEGALITY.

     In case  any one or more of the  provisions  of this  Employment  Agreement
shall be invalid,  illegal or  unenforceable in any respect,  the validity,  the
legality and enforceability of the remaining  provisions  contained herein shall
not in any way be affected or impaired thereby.

         17.      CAPTIONS.

     The captions of the sections hereof are for convenience  only and shall not
control or affect the terms or provisions of this Employment Agreement.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.



SETH ROSEN
                                  

(Dated)                                 FIRST MONTAUK SECURITIES CORP.

                                        By:                                  
                                       (Dated)