---

---

U.S. SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,
DC  20549

FORM 10-Q

|                                                   |                                                                                                      
|-------------------------------------------------- | -----------------------------------------------------------------------------------------------------
|(Mark One)                                        
|                                                   |                                                                                                      
|x                                                  | Quarterly report under Section 13 or 15(d) of the
  Securities Exchange Act of 1934                  
|                                                   |                                                                                                      
|                                                   | For the
  quarterly period ended June 30,
  2006                                                     
|                                                   |                                                                                                      
|o                                                  | Transition report under Section 13 or 15(d) of the
  Exchange Act                                    
|                                                   |                                                                                                      
|                                                   | 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.

YesxNo
o

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

(Check one)
Large Accelerated Filer o   Accelerated Filer o   Non-Accelerated
Filer 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 August 3, 2006, there were
22,122,751 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 the Company or by its officers, directors or
employees acting on the Companys 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 the actual results of the
Company to be materially different from the 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 the Company; the prevalence of a flat fee environment; decline
in participation in equity or municipal finance underwritings; limited trading
opportunities; the method of placing trades by the Companys customers;
computer and telephone system failures; the level of spending by the Company 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.
The Company undertakes 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 the Company involves various risks, including
those mentioned above and those which are detailed from time to time in the
Companys Securities and Exchange Commission filings.

1

---

---



Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

Siebert Financial Corp. & Subsidiaries
Consolidated Statements of Financial Condition

|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ---------- | ------------ | - | ---------- | -
|                                                                                                                                                                                                                                     |  | June 30, 2006 |            | December 31, |  
|                                                                                                                                                                                                                                     |  | (Unaudited)   |            | 2005         |  
|                                                                                                                                                                                                                                     |  |               |            |              |  
|                                                                                                                                                                                                                                    
|ASSETS                                                                                                                                                                                                                               |  |               |            |              |   |            |  
|Cash and cash equivalents                                                                                                                                                                                                            |  | $             | 32,978,000 |              | $ | 30,980,000 |  
|Cash equivalents  restricted                                                                                                                                                                                                        |  |               | 1,300,000  |              |   | 1,300,000  |  
|Receivable from clearing brokers                                                                                                                                                                                                     |  |               | 1,621,000  |              |   | 2,404,000  |  
|Furniture, equipment and leasehold
  improvements, net                                                                                                                                                                               |  |               | 690,000    |              |   | 828,000    |  
|Investment in and advances to equity
  investees                                                                                                                                                                                     |  |               | 5,155,000  |              |   | 4,428,000  |  
|Prepaid expenses and other assets                                                                                                                                                                                                    |  |               | 1,054,000  |              |   | 992,000    |  
|Intangibles, net                                                                                                                                                                                                                     |  |               | 1,338,000  |              |   | 1,494,000  |  
|Deferred taxes                                                                                                                                                                                                                       |  |               | 589,000    |              |   | 601,000    |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|                                                                                                                                                                                                                                     |  | $             | 44,725,000 |              | $ | 43,027,000 |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                 |  |               |            |              |   |            |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|Liabilities:                                                                                                                                                                                                                         |  |               |            |              |   |            |  
|Accounts payable and accrued liabilities                                                                                                                                                                                             |  | $             | 5,683,000  |              | $ | 5,975,000  |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|Contingencies                                                                                                                                                                                                                        |  |               |            |              |   |            |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|Stockholders equity:                                                                                                                                                                                                                |  |               |            |              |   |            |  
|Common stock, $.01 par value; 49,000,000
  shares authorized, 23,039,402 shares issued at June 30, 2006 and December 31,
  2005, 22,120,465 and 22,122,968 shares outstanding at June 30, 2006 and
  December 31, 2005, respectively |  |               | 230,000    |              |   | 230,000    |  
|Additional paid-in capital                                                                                                                                                                                                           |  |               | 18,166,000 |              |   | 18,063,000 |  
|Retained earnings                                                                                                                                                                                                                    |  |               | 24,789,000 |              |   | 22,896,000 |  
|Less: 918,937 and 916,434 shares of
  treasury stock, at cost at June 30, 2006 and December 31, 2005, respectively                                                                                                                   |  |               | (4,143,000 | )            |   | (4,137,000 | )
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|                                                                                                                                                                                                                                     |  |               | 39,042,000 |              |   | 37,052,000 |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  
|                                                                                                                                                                                                                                     |  | $             | 44,725,000 |              | $ | 43,027,000 |  
|                                                                                                                                                                                                                                     |  |               |            |              |   |            |  

See notes to consolidated financial
statements.

2

---



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

|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|---------------------------------------------------------- |  | -------------------- | ---------- | ------------------ | - | ---------- |  | ---- | ---------- |  | - | ---------- | 
|                                                           |  | Three
  Months Ended |            | Six Months
  Ended |  
|                                                           |  | June 30,             |            | June 30,           |  
|                                                           |  |                      |            |                    |  
|                                                           |  | 2006                 |            | 2005               |   | 2006       |  | 2005 |           
|                                                           |  |                      |            |                    |   |            |  |      |           
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|Revenues:                                                  |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|Commissions and fees                                       |  | $                    | 6,298,000  |                    | $ | 6,232,000  |  | $    | 12,900,000 |  | $ | 12,405,000 | 
|Investment banking                                         |  |                      | 283,000    |                    |   | 619,000    |  |      | 560,000    |  |   | 982,000    | 
|Trading profits                                            |  |                      | 183,000    |                    |   | 221,000    |  |      | 353,000    |  |   | 438,000    | 
|Income from equity investees                               |  |                      | 1,679,000  |                    |   | 718,000    |  |      | 2,084,000  |  |   | 1,034,000  | 
|Interest and dividends                                     |  |                      | 413,000    |                    |   | 206,000    |  |      | 789,000    |  |   | 363,000    | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|                                                           |  |                      | 8,856,000  |                    |   | 7,996,000  |  |      | 16,686,000 |  |   | 15,222,000 | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|Expenses:                                                  |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|Employee compensation and benefits                         |  |                      | 2,592,000  |                    |   | 2,538,000  |  |      | 5,248,000  |  |   | 5,210,000  | 
|Clearing fees, including floor brokerage                   |  |                      | 1,339,000  |                    |   | 1,346,000  |  |      | 2,830,000  |  |   | 2,667,000  | 
|Professional fees                                          |  |                      | 887,000    |                    |   | 1,214,000  |  |      | 1,771,000  |  |   | 2,129,000  | 
|Advertising and promotion                                  |  |                      | 239,000    |                    |   | 202,000    |  |      | 674,000    |  |   | 540,000    | 
|Communications                                             |  |                      | 412,000    |                    |   | 577,000    |  |      | 863,000    |  |   | 1,184,000  | 
|Occupancy                                                  |  |                      | 298,000    |                    |   | 263,000    |  |      | 566,000    |  |   | 522,000    | 
|Other general and administrative                           |  |                      | 776,000    |                    |   | 837,000    |  |      | 1,470,000  |  |   | 1,635,000  | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|                                                           |  |                      | 6,543,000  |                    |   | 6,977,000  |  |      | 13,422,000 |  |   | 13,887,000 | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|Income before income taxes                                 |  |                      | 2,313,000  |                    |   | 1,019,000  |  |      | 3,264,000  |  |   | 1,335,000  | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|Provision for income taxes                                 |  |                      | 972,000    |                    |   | 425,000    |  |      | 1,371,000  |  |   | 560,000    | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|Net Income                                                 |  | $                    | 1,341,000  |                    | $ | 594,000    |  | $    | 1,893,000  |  | $ | 775,000    | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|                                                           |  |                      |            |                    |   |            |  |      |            |  |   |            | 
|Net income per share of common stock -
  Basic and Diluted |  | $                    | .06        |                    | $ | .03        |  | $    | .09        |  | $ | .04        | 
|Weighted average shares outstanding - Basic                |  |                      | 22,122,421 |                    |   | 22,077,863 |  |      | 22,122,696 |  |   | 22,076,340 | 
|Weighted average shares outstanding - Diluted              |  |                      | 22,144,707 |                    |   | 22,176,754 |  |      | 22,142,808 |  |   | 22,181,343 | 

See notes to consolidated financial
statements.

3

---



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

|                                                                                    |  |                    |            |      |   |            |  
|----------------------------------------------------------------------------------- |  | ------------------ | ---------- | ---- | - | ---------- | -
|                                                                                    |  | Six Months
  Ended |           
|                                                                                    |  | June 30,           |           
|                                                                                    |  |                    |           
|                                                                                    |  | 2006               |            | 2005 |  
|                                                                                    |  |                    |            |      |  
|                                                                                    |  |                    |            |      |   |            |  
|Cash flows from operating activities:                                               |  |                    |            |      |   |            |  
|Net income                                                                          |  | $                  | 1,893,000  |      | $ | 775,000    |  
|Adjustments to reconcile net income to net
  cash provided by operating activities: |  |                    |            |      |   |            |  
|Depreciation and amortization                                                       |  |                    | 387,000    |      |   | 630,000    |  
|Income from equity investees                                                        |  |                    | (2,084,000 | )    |   | (1,034,000 | )
|Deferred taxes                                                                      |  |                    | 12,000     |      |   | (100,000   | )
|Distribution from
  equity investees                                                |  |                    | 1,408,000  |      |   | 1,543,000  |  
|Employee stock option expense                                                       |  |                    | 103,000    |      |   |            |  
|Changes in:                                                                         |  |                    |            |      |   |            |  
|Receivable from clearing brokers                                                    |  |                    | 783,000    |      |   | 466,000    |  
|Prepaid expenses and other assets                                                   |  |                    | (62,000    | )    |   | 542,000    |  
|Accounts payable and accrued liabilities                                            |  |                    | (292,000   | )    |   | (218,000   | )
|                                                                                    |  |                    |            |      |   |            |  
|Net cash provided by operating activities                                           |  |                    | 2,148,000  |      |   | 2,604,000  |  
|                                                                                    |  |                    |            |      |   |            |  
|                                                                                    |  |                    |            |      |   |            |  
|Cash flows from investing
activities:                                               |  |                    |            |      |   |            |  
|                                                                                    |  |                    |            |      |   |            |  
|Purchase of furniture, equipment and
  leasehold improvements                       |  |                    | (93,000    | )    |   | (52,000    | )
|Payment of advances to equity investees                                             |  |                    | (51,000    | )    |   | (411,000   | )
|                                                                                    |  |                    |            |      |   |            |  
|Net cash used in investing activities                                               |  |                    | (144,000   | )    |   | (463,000   | )
|                                                                                    |  |                    |            |      |   |            |  
|                                                                                    |  |                    |            |      |   |            |  
|Cash flows from financing activities:                                               |  |                    |            |      |   |            |  
|Proceeds from
  exercise of options                                                 |  |                    |            |      |   | 27,000     |  
|Repurchase of common stock                                                          |  |                    | (6,000     | )    |   | (22,000    | )
|                                                                                    |  |                    |            |      |   |            |  
|Net cash (used in) provided by financing
  activities                               |  |                    | (6,000     | )    |   | 5,000      |  
|                                                                                    |  |                    |            |      |   |            |  
|                                                                                    |  |                    |            |      |   |            |  
|Net increase in cash and cash
equivalents                                           |  |                    | 1,998,000  |      |   | 2,146,000  |  
|                                                                                   
|Cash and
  cash equivalents - beginning of period                                   |  |                    | 30,980,000 |      |   | 28,748,000 |  
|                                                                                    |  |                    |            |      |   |            |  
|                                                                                    |  |                    |            |      |   |            |  
|Cash and
  cash equivalents - end of period                                         |  | $                  | 32,978,000 |      | $ | 30,894,000 |  
|                                                                                    |  |                    |            |      |   |            |  
|                                                                                    |  |                    |            |      |   |            |  
|Supplemental cash flow disclosures:                                                 |  |                    |            |      |   |            |  
|Cash paid for:                                                                      |  |                    |            |      |   |            |  
|Income taxes                                                                        |  | $                  | 1,408,000  |      | $ | 149,000    |  

See notes to consolidated financial statements.

4

---



Siebert Financial Corp. & Subsidiaries
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2006 and 2005
(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 have been eliminated. Investments in two
  entities in which the Company has ownership interest of 49% and 33% 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 generally accepted accounting
  principles 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,
  2005. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Certain
  prior period amounts have been reclassified to conform with current period
  presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In December
  2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123R
  Share-Based Payment (SFAS 123R), which requires all share-based payments
  to employees, including grants of employee stock options, to be recognized in
  the statement of operations as an operating expense, based on their fair
  values on grant date. Prior to the adoption of SFAS 123R the Company
  accounted for stock based compensation using the intrinsic value. The Company
  adopted the provision of SFAS No. 123R effective January 1, 2006, using the
  modified prospective transition method. Under the modified prospective
  method, non-cash compensation expense is recognized for the portion of
  outstanding stock option awards granted prior to the adoption of SFAS 123R
  for which service has not been rendered, and for any future stock option
  grants. Accordingly, periods prior to adoption have not been restated. The
  Company recognizes share-based compensation costs on a straight-line basis over
  the requisite service periods of awards. That cost is recognized as
  compensation expense over the service period, which would normally be the
  vesting period of the options.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The
  following table illustrates the effect on net income and earnings per share
  if the fair value based method had been applied to the prior periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|                                                                                                                                          |  |                                     |         |                                   |   |          |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------- | ------- | --------------------------------- | - | -------- | -
|                                                                                                                                          |  | Three months ended,
  June 30, 2005 |         | Six months ended,
  June 30, 2005 |  
|                                                                                                                                          |  |                                     |         |                                   |  
|                                                                                                                                          |  |                                     |         |                                   |   |          |  
|Net income, as reported                                                                                                                   |  | $                                   | 594,000 |                                   | $ | 775,000  |  
|Stock-based employee compensation
  determined under the fair value-based method, prior to the adoption of SFAS
  123R, net of tax effect |  |                                     | (68,000 | )                                 |   | (136,000 | )
|                                                                                                                                          |  |                                     |         |                                   |   |          |  
|Pro forma net income                                                                                                                      |  | $                                   | 526,000 |                                   | $ | 639,000  |  
|                                                                                                                                          |  |                                     |         |                                   |   |          |  
|                                                                                                                                          |  |                                     |         |                                   |   |          |  
|Net income per share  basic:                                                                                                             |  |                                     |         |                                   |   |          |  
|                                                                                                                                          |  |                                     |         |                                   |   |          |  
|As reported                                                                                                                               |  | $                                   | .03     |                                   | $ | .04      |  
|Pro forma                                                                                                                                 |  | $                                   | .02     |                                   | $ | .03      |  
|                                                                                                                                          |  |                                     |         |                                   |   |          |  
|Net income per share  diluted:                                                                                                           |  |                                     |         |                                   |   |          |  
|                                                                                                                                          |  |                                     |         |                                   |   |          |  
|As reported                                                                                                                               |  | $                                   | .03     |                                   | $ | .04      |  
|Pro forma                                                                                                                                 |  | $                                   | .02     |                                   | $ | .03      |  

5

---



| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Stock based
compensation expense recognized in the Consolidated Statement of Income was
$29,000 and $103,000, respectively, for the three and six months ended June 30,
2006.

The following
table summarizes the activity of the Companys stock options for the six months
ended June 30, 2006:

|                                                     |  |        |           |                                                    |   |                                                      |  |                               |      |  |   |        | 
|---------------------------------------------------- |  | ------ | --------- | -------------------------------------------------- | - | ---------------------------------------------------- |  | ----------------------------- | ---- |  | - | ------ | 
|                                                     |  | Shares |           | Weighted-
  Average
  Exercise
  Price per
  Share |   | Weighted-
  Average
  Remaining
  Contractual
  Term |  | Aggregate
  Intrinsic
  Value |     
|                                                     |  |        |           |                                                    |   |                                                      |  |                               |     
|                                                     |  |        |           |                                                    |   |                                                      |  |                               |      |  |   |        | 
|Outstanding at January 1,
  2006                     |  |        | 1,767,610 |                                                    | $ | 4.16                                                 |  |                               |      |  |   |        | 
|                                                     |  |        |           |                                                    |   |                                                      |  |                               |      |  |   |        | 
|Granted                                              |  |        | 0         |                                                    | $ |                                                     |  |                               |      |  |   |        | 
|                                                     |  |        |           |                                                    |   |                                                      |  |                               |      |  |   |        | 
|Exercised                                            |  |        | 0         |                                                    | $ |                                                     |  |                               |      |  |   |        | 
|                                                     |  |        |           |                                                    |   |                                                      |  |                               |      |  |   |        | 
|Cancelled                                            |  |        | 14,000    |                                                    | $ | 3.48                                                 |  |                               |      |  |   |        | 
|                                                     |  |        |           |                                                    |   |                                                      |  |                               |      |  |   |        | 
|Outstanding at June 30,
  2006                       |  |        | 1,753,610 |                                                    | $ | 4.16                                                 |  |                               | 4.64 |  | $ | 18,000 | 
|                                                     |  |        |           |                                                    |   |                                                      |  |                               |      |  |   |        | 
|Fully vested and expected
  to vest at June 30, 2006 |  |        | 1,671,610 |                                                    | $ | 4.18                                                 |  |                               | 4.52 |  | $ | 16,000 | 
|                                                     |  |        |           |                                                    |   |                                                      |  |                               |      |  |   |        | 
|Exercisable at June 30,
  2006                       |  |        | 1,671,610 |                                                    | $ | 4.18                                                 |  |                               | 4.52 |  | $ | 16,000 | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | As of June 30, 2006, there was $105,000 of total unrecognized compensation cost related to unvested
options which is expected to be recognized over a weighted-average period of 4.5 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | 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 June 30, 2006, Siebert had net capital of
  approximately $28,139,000 as compared with net capital requirements of
  $250,000.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4. | Capital Transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On May 15,
  2000, the board of directors of the Company authorized a stock buy back
  program of up to one million common shares. Shares will be purchased from
  time to time in the open market and in private transactions. Through June 30,
  2006, 918,937 shares have been purchased at an average price of $4.51 per
  share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|5. | Intuit Lawsuit Update:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Siebert
  filed a lawsuit against Intuit Inc. (Intuit) in New York State Supreme
  Court on September 17, 2003 seeking not less than $11.1 million in
  compensatory damages and $33.3 million in punitive damages for claims                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

6

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | relating to
  the Joint Brokerage Service (the JBS) conducted during the years ended
  December 31, 2003 and 2002 under the Strategic Alliance Agreement between
  Siebert and Intuit. The Court denied Intuits motion to dismiss Sieberts
  causes of action for breach of fiduciary duty, breach of contractual
  obligations to pay shared expenses, promissory estoppel, and breach of the
  implied covenant of good faith and fair dealing. The Court granted Intuits
  motion to dismiss Sieberts causes of action for breach of the express
  covenant of good faith and fair dealing, misrepresentation and/or fraud, and
  its request for punitive damages. Intuit has counterclaimed against Siebert,
  seeking not less than $6.6 million. Siebert and Intuit have appealed from
  certain portions of the Courts decision and Siebert has also moved for
  reargument of that decision regarding punitive damages. In November 2005,
  Intuits counsel was disqualified by the Court from representing Intuit in
  this action. Any further activity in the action is stayed pending a decision
  on Intuits appeal from the Order of Disqualification, which was heard by the
  Appellate Court on April 21, 2006. The outcome of this matter cannot now be
  predicted.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6. | Siebert Brandford Shank & Co., LLC:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Summarized
  financial data (presented in thousands) of Siebert Brandford Shank & Co.,
  LLC, (SBS) as of and for the six months ended June 30, 2006 and 2005 is set
  forth below. Siebert holds a 49% ownership interest in SBS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| |                                                                                                    |  |      |            |      |   |            | 
| | -------------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- | 
| |                                                                                                    |  | 2006 |            | 2005 |  
| |                                                                                                    |  |      |            |      |  
| |                                                                                                    |  |      |            |      |   |            | 
| | Total assets including secured demand note
  of $1,200,000 in each period due from Siebert         |  | $    | 17,470,000 |      | $ | 16,976,000 | 
| | Total liabilities including subordinated
  liabilities of $1,200,000 in each period due to Siebert |  |      | 10,358,000 |      |   | 10,860,000 | 
| | Total members capital                                                                             |  |      | 7,112,000  |      |   | 6,117,000  | 
| | Total revenues                                                                                     |  |      | 11,770,000 |      |   | 10,086,000 | 
| | Net income                                                                                         |  |      | 2,279,000  |      |   | 1,821,000  | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Siebert
  charged SBS $120,000 for the six months ended June 30, 2006 for general and administrative
  services, which Siebert believes approximates the cost of furnishing such
  services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Income of SBS for the three and six months ended June 30, 2006 amounted to $686,000 and
$1,117,000, respectively. Income for
the three and six months ended June 30, 2005 amounted to $577,000 and $893,000, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Sieberts
  share of undistributed earnings from SBS amounted to $3,093,000 and
  $2,605,000 at June 30, 2006 and 2005, 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 and 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Summarized
  financial data of SBSFPC as of and for the six months June 30, 2006 is set
  forth below. Siebert holds a 33.33% ownership interest in SBSFPC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

7

---



| |                          |  |   |           | 
| | ------------------------ |  | - | --------- | 
| | Total assets             |  | $ | 7,514,000 | 
| | Total
  liabilities      |  |   | 2,974,000 | 
| | Total
  members capital |  |   | 4,540,000 | 
| | Total
  revenues         |  |   | 4,771,000 | 
| | Net income               |  |   | 2,905,000 | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Income of SBSFPC for the three and six months ended June 30, 2006 amounted to $993,000 and
$967,000, respectively. Income for the three and six months ended June 30, 2005 amounted to $141,000, respectively. SBSFPC began operations in April 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Sieberts
  share of undistributed earnings from SBSFPC amounted to $1,113,000 at June 30,
  2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|8. | Commitments and Contingent Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 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 has expressed its belief that it is entitled to
  retain the advance and receive a minimum of $3 million for its unreimbursed
  costs, a termination fee of $500,000 and $5 million for lost revenues.
  Siebert believes the Pershing claims are without merit and that the ultimate
  resolution of this matter will not have a material adverse effect on its results
  of operations or financial position. Siebert in 2004 decided not to commence
  proceedings against Pershing and charged off the $1,500,000 advance to
  Pershing. Siebert and Pershing in 2005 entered into a Limited Release
  Agreement under which Siebert received a release from the $3 million disputed
  claims for unreimbursed fees and costs, and Pershing was released from any
  liability to Siebert based upon the disputed fees and costs, and Siebert paid
  a consideration to Pershing that had been previously accrued by Siebert. The
  outcome of this matter cannot now be predicted.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|9. | Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | On August 9, 2006, The Board of Directors declared a dividend of eight cents per share
on common stock of the Company, payable August 30, 2006 to shareholders of record at the close of business
on August 21, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | As a majority shareholder of the Company, the Chief Executive Officer has waived her right to
receive the dividends in excess of the aggregate amount to be paid to other shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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

This
discussion should be read in conjunction with the Companys audited
consolidated financial statements as of and for the year ended December 31,
2005, and the unaudited consolidated financial statements and the notes thereto
contained elsewhere in this Quarterly Report.

Business Environment

The
uncertainty over the state of the economy weighed on the markets in the second
quarter of 2006 due to the high price of oil and rising interest rates and
continues to affect interest in buying stocks. Competition in the brokerage
industry remains intense although many of Sieberts competitors have been
consolidated or have gone out of business.

The
Company, like other securities firms, is 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 the
Companys 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
 August 9, 2006, The Board of Directors declared a dividend of eight cents per share on common stock of the
Company, payable August 30, 2006 to shareholders of record at the close of business on August 21, 2006.

As
a majority shareholder of the Company, the Chief Executive Officer has waived her right to receive the
dividends in excess of the aggregate amount to be paid to other shareholders.

On
May 15, 2000, the board of directors of the Company authorized the repurchase
of up to 1,000,000 shares of the Companys common stock. Shares will be
purchased from time to time, in the discretion of the Company, in the open
market and in private transactions. Through June 30, 2006, 918,937 shares have
been purchased at an average

8

---



price of $4.51
per share. The Company intends to continue acquiring shares pursuant to its
stock repurchase program based upon the price of the stock and in accordance
with applicable rules and regulations.

Critical Accounting Policies

The
Company follows accounting policies standard in the brokerage industry and
believes that its policies appropriately reflect its financial position and
results of operations. Management has identified the use of Estimates as a
critical accounting policy. These estimates relate primarily to revenue and
expense items in the normal course of business as to which the Company receives
no confirmations, invoices, or other documentation at the time the books are
closed for a period. The Company uses its best judgment, based on its knowledge
of these revenue transactions and expenses incurred, to estimate the amounts of
such revenue and expense. The Company is not aware of any material differences
between the estimates used in closing its books for the last five years and the
actual amounts of revenue received and expenses incurred when the Company
subsequently receives the actual confirmations, invoices or other
documentation. Estimates are also used in determining the useful lives of
tangible and intangible assets, and the fair market value of intangible assets.
Management believes that its estimates are reasonable.

Results of Operations

The
Company believes that its core business is performing relatively well, given
the current difficult business environment for discount and online brokers. The
Company had net income of $1,341,000 and $1,893,000 for the three months and
six months ended June 30, 2006, respectively.

Three Months Ended
June 30, 2006 Compared to Three Months Ended June 30, 2005

Total
revenues for the three months ended June 30, 2006 were $8.9 million, an increase
of $860,000 or 10.8% from the same period in 2005.

Commission
and fee income for the three months ended June 30, 2006 was $6.3 million, an
increase of $66,000 or 1.1% from the same period in 2005 due to an increase in retail trading volume offset by a decrease in commissions generated by the commission
recapture and institutional trading.

Investment
banking revenues for the three months ended June 30, 2006 were $283,000, a
decrease of $336,000 or 54.3% due to the Company participating in fewer new
issues in the equity capital markets.

Income
from the Companys equity investment in Siebert Brandford Shank & Co., LLC,
an entity in which the Company holds a 49% equity interest (SBS), for the
three months ended June 30, 2006, was $686,000 compared to income of $577,000,
an increase of $109,000 or 18.9% from the same period in 2005. SBS serves as an
underwriter for municipal bond offerings. This increase was due primarily to an
increase in group sales. Income from the Companys equity investment in SBS
Financial Products Company, LLC, an entity in which the Company holds a 33%
equity interest (SBSFPC) for the three months ended June 30, 2006, was
$993,000 compared to income of $141,000, an increase of $852,000 or 604.3% from
the same period in 2005. This increase was due to an increase in the number and
size of the transactions SBSFPC entered into in the second quarter of 2006. SBSFPC began operations in April 2005.

Trading
profits were $183,000 for the three months ended June 30, 2006, a decrease of
$38,000 or 17.2% over the same period in 2005 due to an overall decrease in
trading margins and volume.

Interest
and dividends for the three months ended June 30, 2006 were $413,000, an
increase of $207,000 or 100.5% from the same period in 2005 primarily due to
higher interest rates and higher cash balances.

Total
expenses for the three months ended June 30, 2006 were $6.5 million, a decrease
of $434,000 or 6.2% from the same period in 2005.

9

---



Employee
compensation and benefit costs for the three months ended June 30, 2006 were
$2.6 million, an increase of $54,000 or 2.1% from the same period in 2005. This
increase was due to an increase in employee benefits, bonus accrual and the
expensing of employee stock options offset by a decrease in compensation to
registered representatives and executives, and the decrease of the New York
Stock Exchange Floor Operation.

Clearing
and floor brokerage costs for the three months ended June 30, 2006 were $1.3
million, a decrease of $7,000 or 1.0% from the same period in 2005 primarily
due to a decrease in floor brokerage costs relating to the decreased volume of
institutional trades executed at the New York Stock Exchange.

Professional
fees for the three months ended June 30, 2006, was $887,000, a decrease of
$327,000 or 26.9% from the same period in 2005 due to a decrease in consulting
fees relating to the commission recapture business, Sarbanes-Oxley related costs and legal
fees.

Advertising
and promotion expenses for the three months ended June 30, 2006 were $239,000,
an increase of $37,000 or 18.3% from the same period in 2005 primarily due to
the production and airing of television commercials in the Florida region.

Communications
expense for the three months ended June 30, 2006, was $412,000, a decrease of
$165,000 or 28.6% from the same period in 2005 due primarily to actively
pursuing alternative vendors and utilizing new technologies and solutions.

Occupancy
costs for the three months ended June 30, 2006 were $298,000, an increase of
$35,000 or 13.3% from the same period in 2005. This was due to the increase in
escalation costs in the Jersey City, New Jersey office.

Other
general and administrative expenses for the three months ended June 30, 2006
were $776,000, a decrease of $61,000 or 7.3% from the same period in 2005 due
to the decrease in depreciation and amortization expenses and cost relating to
the institutional direct access operations offset by increases in travel and
entertainment and placement fees.

For
the three months ended June 30, 2006 and 2005, there was a tax provision of
$972,000 and 425,000, respectively, due to the Companys income before income
tax of $2,313,000 and $1,019,000, respectively. The effective tax rate was 42% in both periods.

Six Months Ended June
30, 2006 Compared to Six Months Ended June 30, 2005

Total
revenues for the six months ended June 30, 2006 were $16.7 million, an increase
of $1.5 million or 9.6% from the same period in 2005.

Commission
and fee income for the six months ended June 30, 2006 was $12.9 million, an
increase of $495,000 or 4.0% from the same period in 2005 due to an increase in
retail customers trading volumes offset by a decrease in commissions generated
by the commission recapture, institutional trading and institutional direct
access operations.

Investment
banking revenues for the six months ended June 30, 2006 were $560,000, a
decrease of $422,000 or 43.0% from the same period in 2005 due to the Company
participating in fewer new issues in the equity capital markets.

Income
from the Companys equity investment in Siebert Brandford Shank & Co., LLC,
an entity in which the Company holds a 49% equity interest (SBS) for the six
months ended June 30, 2006, was $1,117,000 compared to income of $893,000, an
increase of $224,000 or 25.1% from the same period in 2005. This increase was
due to an increase in trading and sales at SBS. SBS serves as an underwriter
for municipal bond offerings. Income from the Companys equity investment in
SBS Financial Products Company, LLC an entity in which the Company holds a 33%
equity interest (SBSFPC) for the six months ended June 30, 2006, was $967,000
an increase of $826,000 or 585.8%

10

---



from the same
period in 2005. This increase was due to an increase in the number and size of
the transactions SBSFPC entered into in the second quarter of 2006. SBSFPC began operations in April 2005.

Trading
profits were $353,000 for the six months ended June 30, 2006, a decrease of
$85,000 or 19.4% over the same period in 2005 due to an overall decrease in
trading margins and volume.

Interest
and dividends for the six months ended June 30, 2006 were $789,000, an increase
of $426,000 or 117.4% from the same period in 2005 primarily due to higher
interest rates and higher cash balances.

Total
expenses for the six months ended June 30, 2006 were $13.4 million, a decrease
of $465,000 or 3.4% from the same period in 2005.

Employee
compensation and benefit costs for the six months ended June 30, 2006 were $5.3
million, an increase of $38,000 or .7% from the same period in 2005. This
increase was due to an increase in bonus accruals and health benefits offset by
a decrease in compensation to registered representatives and executives, and
the decrease of The Stock Exchange Floor Operation.

Clearing
and floor brokerage costs for the six months ended June 30, 2006 were $2.8
million, an increase of $163,000 or 6.1% from the same period in 2005 primarily
due to increase in retail customer trading volume and other related clearing
fees offset by a decrease in floor brokerage costs relating to the decreased
volume of institutional trades executed at the New York Stock Exchange.

Professional
fees for the six months ended June 30, 2006, was $1.8 million, a decrease of
$358,000 or 16.8% from the same period in 2005 due to a decrease in consulting
fees relating to the commission recapture business, Sarbanes-Oxley related costs and legal
fees.

Advertising
and promotion expenses for the six months ended June 30, 2006 were $674,000, an
increase of $134,000 or 24.8% from the same period in 2005 primarily due to the
production and airing of television commercials in the Florida region.

Communications
expense for the six months ended June 30, 2006, was $863,000, a decrease of
$321,000 or 27.1% from the same period in 2005 due to primarily actively
pursuing alternative vendors and utilizing new technologies and solutions.

Occupancy
costs for the six months ended June 30, 2006 were $566,000, an increase of
$44,000 or 8.4% from the same period in 2005. This was due to the increase in
escalation costs in the Jersey City, New Jersey office and rents in the Boca
Raton, Florida office.

Other
general and administrative expenses for the six months ended June 30, 2006 were
$1.5 million, a decrease of $165,000 or 10.1% from the same period in 2005 due
to the decrease in depreciation and amortization expenses and cost relating to
the institutional direct access operations offset by increases in travel and
entertainment and placement fees.

For
the six months ended June 30, 2006 and 2005, there was a tax provision of
$1,371,000 and $560,000, respectively, due to the Companys income before
income tax of $3,264,000 and $1,335,000, respectively. The effective tax rate was 42% in both periods

Liquidity and Capital Resources

The
Companys assets are highly liquid, consisting generally of cash, money market
funds and commercial paper. The Companys total assets at June 30, 2006 were
$45 million. As of that date, $34.6 million, or 77%, of total assets were
regarded by the Company as highly liquid.

11

---



Siebert
is subject to the net capital requirements of the SEC, the NYSE and other
regulatory authorities. At June 30, 2006, Sieberts regulatory net capital was
$28.1 million, $27.9 million in excess of its minimum capital requirement of
$250,000.

The
Company also intends to acquire additional shares of its common stock pursuant
to its 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 the Companys 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, 2007, 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 commercial paper. These investments are not subject to material
changes in value due to interest rate movements. The Company also invests in
certain short-term municipal bonds, the values of which may fluctuate during
the period they are held by the Company.

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 the
Companys 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 counter parties are unable to
fulfill their contractual obligations.

Item 4. Controls and Procedures

The Company
carried out an evaluation, under the supervision and with the participation of
management, including the Companys Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Companys our
disclosure controls and procedures as of the end of the period covered by this
report pursuant to Exchange Act Rule 13a-15 under the Securities Exchange Act
of 1934, as amended. Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Companys disclosure controls
and procedures are effective in timely alerting them to material information
relating to the Company (including its consolidated subsidiaries) required to
be included in the Companys periodic filings with the Securities and Exchange
Commission filings.

There were
no changes in the Companys internal control over financial reporting that
occurred during the Companys most recent fiscal quarter that have materially
affected, or are reasonably likely to materially affect, the Companys internal
control over financial reporting.

12

---



Part II - OTHER INFORMATION

Item 1. Legal
Proceedings

See
Part 1-Item 1 Notes to Consolidated Financial Statements-Intuit Lawsuit
Update with respect to the Companys lawsuit against Intuit Inc. which was
filed in New York State Supreme Court, County of New York on September 17,
2003, alleging, among other things, Intuits breach of contractual obligations,
breach of fiduciary duties and misrepresentation and/or fraud, all relating to
the Joint Brokerage services conducted under the Strategic Alliance Agreement
between Siebert and Intuit.

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 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 the Companys
Annual Report on Form 10-K for the year ended December 31, 2005, 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 the Companys Annual Report on Form 10-K for the year
ended December 31, 2005.

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

On May 15,
2000, the Board of Directors of the Company authorized a buy back of up to one
million shares of the Companys common stock. Under this program, shares are
purchased from time to time, at the Companys discretion, in the open market
and in private transactions. A summary of the Companys repurchase activity for
the three months ended June 30, 2006 is as follows:

|           |  |                                      |       |                                |   |                                                                               |  |                                                                               |         |  |  |        | 
|---------- |  | ------------------------------------ | ----- | ------------------------------ | - | ----------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------- | ------- |  |  | ------ | 
|Period     |  | Total Number
  Of Shares
  Purchased |       | Average Price
  Paid Per Share |   | Total Number of 
  Shares Purchased 
  as Part of Publicly 
  Announced Plans |  | Maximum 
  Number of Shares 
  That May Yet Be 
  Purchased Under 
  The Plan |        
|           |  |                                      |       |                                |   |                                                                               |  |                                                                               |        
|          
|April 2006 |  |                                      | 0     |                                |   |                                                                               |  |                                                                               | 916,434 |  |  | 83,566 | 
|          
|May 2006   |  |                                      | 489   |                                | $ | 2.77                                                                          |  |                                                                               | 916,923 |  |  | 83,077 | 
|          
|June 2006  |  |                                      | 2,014 |                                | $ | 2.70                                                                          |  |                                                                               | 918,937 |  |  | 81,063 | 
|           |  |                                      |       |                                |   |                                                                               |  |                                                                               |         |  |  |        | 
|          
|Total      |  |                                      | 2,503 |                                | $ | 2.71                                                                          |  |                                                                               | 918,937 |  |  | 81,063 | 

Item 3. Defaults
Upon Senior Securities

None

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

The Company held its annual meeting on June 12, 2006. At that meeting,
the following matter was voted on and received

13

---



the votes indicated:

|                                     |  |            |  |          |         |  | 
|------------------------------------ |  | ---------- |  | -------- | ------- |  | 
|(1)          Election
  of Directors |  | For        |  | Withheld |        
|                                     |  |            |  |          |        
|                                    
|Muriel F. Siebert                    |  | 21,871,529 |  |          | 117,895 |  | 
|                                    
|Patricia L. Francy                   |  | 21,852,609 |  |          | 136,815 |  | 
|                                    
|Jane H. Macon                        |  | 21,809,814 |  |          | 179,610 |  | 
|                                    
|Leonard M. Leiman                    |  | 21,854,109 |  |          | 135,315 |  | 
|                                    
|Nancy S.
  Peterson                  |  | 21,957,484 |  |          | 31,940  |  | 
|                                    
|Robert P.
  Mazzarella               |  | 21,958,184 |  |          | 31,240  |  | 

Item 5. Other
Information

None

Item 6. Exhibits

(a)

| |      |                                                                                                                                                                 
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.
| | 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.                                     

14

---



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:
  August 14, 2006  |                                                                                                       
| |                           |                                                                                                       
| | By:                       | /s/ Joseph
  M. Ramos, Jr                                                                              | 
| |                           |                                                                                                        | 
| |                           | Joseph M.
  Ramos, Jr.                                                                                 | 
| |                           | Executive
  Vice President and Chief Financial Officer 
  (principal financial and accounting officer) | 
| |                           |                                                                                                        | 
| | Dated:
  August 14, 2006  |                                                                                                       

15

---