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|                                  
|----------------------------------
|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
|WASHINGTON,
 D.C. 20549           
|                                  
|FORM 10-Q                         

|                                                                 |                                                                                                             
|---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------
|(Mark One)                                                      
|                                                                 |                                                                                                             
|x                                                                | QUARTERLY REPORT PURSUANT
 TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                    
|                                                                 |                                                                                                             
|                                                                 | For the quarterly period
 ended June 30, 2012                                                               
|                                                                 |                                                                                                             
|OR                                                              
|                                                                 |                                                                                                             
|o                                                                | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 THE SECURITIES EXCHANGE ACT OF 1934                   
|                                                                 |                                                                                                             
|                                                                 | For the
 transition period
 from______________________________            to________________________________
|                                                                 |                                                                                                             
|                                                                 | Commission
 file number  0-5703                                                                             
|Siebert Financial Corp.                                         
|                                                                
|(Exact Name of Registrant as Specified in its Charter)(Zip Code)

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

|                                                                                   
|-----------------------------------------------------------------------------------
|885 Third Avenue, New York, NY 10022                                               
|                                                                                   
|(Address of Principal Executive Offices)                                           
|                                                                                   
|(212) 644-2400                                                                     
|                                                                                   
|(Registrant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 Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes x No o

Indicate by
check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).

Yes x No o

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

|                           |                             
|-------------------------- | ----------------------------
|Large
 Accelerated Filer o | Accelerated
 Filer o        
|                          
|Non-Accelerated
 Filer o   | Smaller
 Reporting Company x

1

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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

Indicate 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, 2012, there were 22,101,098
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 report, as
well as oral statements that may be made by us or by our officers, directors or
employees acting on our behalf, that are not statements of historical or
current fact constitute forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward looking
statements involve risks and uncertainties and known and unknown factors that
could cause our actual results to be materially different from our historical
results or from any future results expressed or implied by such forward looking
statements, including, without limitation: changes in general economic and
market conditions; changes and prospects for changes in interest rates;
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 greater discounts on commissions
than we do; the prevalence of a flat fee environment; decline in participation
in corporate or municipal finance underwritings; limited trading opportunities;
the method of placing trades by our customers; computer and telephone system
failures; our level of spending on advertising and promotion; trading errors
and the possibility of losses from customer non-payment of amounts due; other
increases in expenses and changes in net capital or other regulatory
requirements. We undertake no obligation to publicly release the results of any
revisions to these forward-looking statements which may be made to reflect
events or circumstances after the date when such statements were made or to
reflect the occurrence of unanticipated events. An investment in us involves
various risks, including those mentioned above and those which are detailed
from time to time in our Securities and Exchange Commission filings.

---

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2

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Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

Siebert Financial Corp. & Subsidiaries 
Consolidated Statements of Financial Condition

|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ---------- | ------------------ | - | ---------- | -
|                                                                                                                                                                                              |  | June 30, 2012
 (Unaudited) |            | December 31,
 2011 |  
|                                                                                                                                                                                              |  |                            |            |                    |  
|ASSETS                                                                                                                                                                                        |  |                            |            |                    |   |            |  
|Cash and cash equivalents                                                                                                                                                                     |  | $                          | 21,402,000 |                    | $ | 21,167,000 |  
|Cash equivalents  restricted                                                                                                                                                                 |  |                            | 1,532,000  |                    |   | 1,532,000  |  
|Receivable from brokers                                                                                                                                                                       |  |                            | 1,440,000  |                    |   | 1,033,000  |  
|Securities owned, at fair value                                                                                                                                                               |  |                            | 231,000    |                    |   | 250,000    |  
|Furniture, equipment and leasehold
 improvements, net                                                                                                                                         |  |                            | 297,000    |                    |   | 757,000    |  
|Investment in and advances to affiliates                                                                                                                                                      |  |                            | 9,246,000  |                    |   | 8,619,000  |  
|Prepaid expenses and other assets                                                                                                                                                             |  |                            | 778,000    |                    |   | 827,000    |  
|Intangibles, net                                                                                                                                                                              |  |                            | 633,000    |                    |   | 638,000    |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|                                                                                                                                                                                              |  | $                          | 35,559,000 |                    | $ | 34,823,000 |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                          |  |                            |            |                    |   |            |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|Liabilities:                                                                                                                                                                                  |  |                            |            |                    |   |            |  
|Accounts payable and accrued liabilities                                                                                                                                                      |  | $                          | 3,270,000  |                    | $ | 3,599,000  |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|Contingencies                                                                                                                                                                                 |  |                            |            |                    |   |            |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|Stockholders equity:                                                                                                                                                                         |  |                            |            |                    |   |            |  
|Common stock, $.01 par value; 49,000,000
 shares authorized, 23,211,846 shares issued, and 22,101,197 and 22,105,499
 shares outstanding at June 30, 2012 and December 31, 2011, respectively |  |                            | 232,000    |                    |   | 232,000    |  
|Additional paid-in capital                                                                                                                                                                    |  |                            | 19,490,000 |                    |   | 19,490,000 |  
|Retained earnings                                                                                                                                                                             |  |                            | 17,302,000 |                    |   | 16,230,000 |  
|Less: 1,110,649 and 1,106,347 shares of
 treasury stock, at cost at June 30, 2012 and December 31, 2011, respectively                                                                         |  |                            | (4,735,000 | )                  |   | (4,728,000 | )
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|                                                                                                                                                                                              |  |                            | 32,289,000 |                    |   | 31,224,000 |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  
|                                                                                                                                                                                              |  | $                          | 35,559,000 |                    | $ | 34,823,000 |  
|                                                                                                                                                                                              |  |                            |            |                    |   |            |  

See notes to condensed consolidated financial
statements.

3

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

|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|----------------------------------------------------------------- |  | ---------------------------- | ---------- | -------------------------- | - | ---------- | - | ---- | ---------- |  | - | ---------- | -
|                                                                  |  | Three Months Ended
 June 30, |            | Six Months Ended
 June 30, |  
|                                                                  |  |                              |           
|                                                                  |  | 2012                         |            | 2011                       |   | 2012       |   | 2011 |           
|                                                                  |  |                              |           
|                                                                  |  |                              |           
|Revenues:                                                         |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|Commissions and fees                                              |  | $                            | 3,879,000  |                            | $ | 3,539,000  |   | $    | 9,037,000  |  | $ | 7,484,000  |  
|Investment banking                                                |  |                              | 1,198,000  |                            |   | 406,000    |   |      | 1,707,000  |  |   | 1,578,000  |  
|Trading profits                                                   |  |                              | 531,000    |                            |   | 526,000    |   |      | 1,394,000  |  |   | 903,000    |  
|Interest and dividends                                            |  |                              | 17,000     |                            |   | 27,000     |   |      | 40,000     |  |   | 36,000     |  
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|                                                                  |  |                              | 5,625,000  |                            |   | 4,498,000  |   |      | 12,178,000 |  |   | 10,001,000 |  
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|Expenses:                                                         |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|Employee compensation and benefits                                |  |                              | 2,631,000  |                            |   | 2,380,000  |   |      | 5,120,000  |  |   | 4,842,000  |  
|Clearing fees, including floor brokerage                          |  |                              | 667,000    |                            |   | 690,000    |   |      | 1,634,000  |  |   | 1,614,000  |  
|Professional fees                                                 |  |                              | 820,000    |                            |   | 1,400,000  |   |      | 1,610,000  |  |   | 2,813,000  |  
|Advertising and promotion                                         |  |                              | 89,000     |                            |   | 93,000     |   |      | 227,000    |  |   | 193,000    |  
|Communications                                                    |  |                              | 498,000    |                            |   | 527,000    |   |      | 986,000    |  |   | 1,084,000  |  
|Occupancy                                                         |  |                              | 226,000    |                            |   | 272,000    |   |      | 477,000    |  |   | 543,000    |  
|Write off of software development costs                           |  |                              | 433,000    |                            |   |            |   |      | 433,000    |  |   |            |  
|Other general and administrative                                  |  |                              | 610,000    |                            |   | 633,000    |   |      | 1,249,000  |  |   | 1,318,000  |  
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|                                                                  |  |                              | 5,974,000  |                            |   | 5,995,000  |   |      | 11,736,000 |  |   | 12,407,000 |  
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|Income (loss) from equity investees                               |  |                              | 839,000    |                            |   | (292,000   | ) |      | 685,000    |  |   | (1,376,000 | )
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|Income (loss) before income taxes                                 |  |                              | 490,000    |                            |   | (1,789,000 | ) |      | 1,127,000  |  |   | (3,782,000 | )
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|Income tax provision                                              |  |                              | 43,000     |                            |   | 1,000      |   |      | 55,000     |  |   | 12,000     |  
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|Net income (loss)                                                 |  | $                            | 447,000    |                            | $ | (1,790,000 | ) | $    | 1,072,000  |  | $ | (3,794,000 | )
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|                                                                  |  |                              |            |                            |   |            |   |      |            |  |   |            |  
|Net income (loss) per share of common stock
 -
 Basic and Diluted |  | $                            | .02        |                            | $ | (.08       | ) | $    | .05        |  | $ | (.17       | )
|Weighted average shares outstanding -
 Basic and Diluted          |  |                              | 22,101,308 |                            |   | 22,118,162 |   |      | 22,102,402 |  |   | 22,119,667 |  

See notes to condensed consolidated financial
statements.

4

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

|                                                                                          |  |                          |            |      |   |            |  
|----------------------------------------------------------------------------------------- |  | ------------------------ | ---------- | ---- | - | ---------- | -
|                                                                                          |  | Six Months EndedJune 30, |           
|                                                                                          |  |                          |           
|                                                                                          |  | 2012                     |            | 2011 |  
|                                                                                          |  |                          |           
|Cash flows from operating activities:                                                     |  |                          |            |      |   |            |  
|Net income (loss)                                                                         |  | $                        | 1,072,000  |      | $ | (3,794,000 | )
|Adjustments to reconcile net income (loss)
 to net cash provided by operating activities: |  |                          |            |      |   |            |  
|Depreciation and amortization                                                             |  |                          | 219,000    |      |   | 264,000    |  
|Write off of software development costs                                                   |  |                          | 433,000    |      |   |            |  
|(Income) loss from equity investees                                                       |  |                          | (685,000   | )    |   | 1,376,000  |  
|Distribution from equity investees                                                        |  |                          | 83,000     |      |   | 1,185,000  |  
|Stock based compensation                                                                  |  |                          |           |      |   | 4,000      |  
|Changes in:                                                                               |  |                          |            |      |   |            |  
|Securities owned, at fair value                                                           |  |                          | 19,000     |      |   | (3,000     | )
|Receivable from brokers                                                                   |  |                          | (407,000   | )    |   | 469,000    |  
|Prepaid expenses and other assets                                                         |  |                          | 49,000     |      |   | 55,000     |  
|Income tax refund receivable                                                              |  |                          |           |      |   | 507,000    |  
|Accounts payable and accrued liabilities                                                  |  |                          | (329,000   | )    |   | 86,000     |  
|                                                                                          |  |                          |            |      |   |            |  
|Net cash provided by operating activities                                                 |  |                          | 454,000    |      |   | 149,000    |  
|                                                                                          |  |                          |            |      |   |            |  
|                                                                                          |  |                          |            |      |   |            |  
|Cash flows from investing activities:                                                     |  |                          |            |      |   |            |  
|Purchase of furniture, equipment and
 leasehold improvements                              |  |                          | (187,000   | )    |   | (11,000    | )
|(Payment) collection of advances made to
 equity investees                                |  |                          | (25,000    | )    |   | 3,000      |  
|                                                                                          |  |                          |            |      |   |            |  
|Net cash used in investing activities                                                     |  |                          | (212,000   | )    |   | (8,000     | )
|                                                                                          |  |                          |            |      |   |            |  
|                                                                                          |  |                          |            |      |   |            |  
|Cash flows from financing activities:                                                     |  |                          |            |      |   |            |  
|Purchase of treasury shares                                                               |  |                          | (7,000     | )    |   | (13,000    | )
|                                                                                          |  |                          |            |      |   |            |  
|Net cash used in financing activities                                                     |  |                          | (7,000     | )    |   | (13,000    | )
|                                                                                          |  |                          |            |      |   |            |  
|                                                                                          |  |                          |            |      |   |            |  
|Net increase in cash and cash equivalents                                                 |  |                          | 235,000    |      |   | 128,000    |  
|                                                                                          |  |                          |            |      |   |            |  
|Cash and
 cash equivalents - beginning of period                                          |  |                          | 21,167,000 |      |   | 22,646,000 |  
|                                                                                          |  |                          |            |      |   |            |  
|                                                                                          |  |                          |            |      |   |            |  
|Cash and
 cash equivalents - end of period                                                |  | $                        | 21,402,000 |      | $ | 22,774,000 |  
|                                                                                          |  |                          |            |      |   |            |  
|                                                                                          |  |                          |            |      |   |            |  
|Supplemental cash flow disclosures:                                                       |  |                          |            |      |   |            |  
|Cash (received) paid for:                                                                 |  |                          |            |      |   |            |  
|Income taxes, net                                                                         |  | $                        | 15,000     |      | $ | (138,000   | )

See notes to condensed consolidated financial
statements.

5

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Siebert Financial Corp. & Subsidiaries 
Notes to Condensed Consolidated Financial Statements 
Six Months Ended June 30, 2012 and 2011 
(Unaudited)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Organization and Basis of Presentation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The consolidated financial statements include the accounts of Siebert
 Financial Corp. (the Company) and its wholly owned subsidiaries Muriel
 Siebert & Co., Inc. (Siebert) and Siebert Womens Financial Network,
 Inc. (WFN). All material intercompany balances and transactions have been
 eliminated. Investment in two entities in which the Company has ownership
 interests of 49% and 33.33%, respectively, are accounted for by the equity
 method and included in investment in and advances to affiliates in the
 consolidated statement of financial condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The condensed consolidated financial statements presented herein are
 unaudited and include all adjustments (consisting of normal recurring
 adjustments) which are, in the opinion of management, necessary for a fair
 presentation of the financial position and results of operations of the
 interim periods pursuant to the rules and regulations of the Securities and
 Exchange Commission (the SEC). Certain information and footnote disclosures
 normally included in annual financial statements prepared in accordance with generally
 accepted accounting principles (GAAP) in the United States of America
 (U.S.) have been condensed or omitted pursuant to the SEC rules and
 regulations, although the Company believes that the disclosures made are
 adequate to make the information not misleading. The balance sheet at
 December 31, 2011 has been derived from the audited consolidated statement of
 financial condition at that date, but does not include all information and
 footnotes required by U.S. GAAP for complete financial statements. These
 condensed consolidated financial statements should be read in conjunction
 with the consolidated financial statements included in the Companys Form
 10-K for the year ended December 31, 2011. Because of the nature of the
 Companys business, the results of operations for the three and six months
 ended June 30, 2012 are not necessarily indicative of operating results for
 the full year.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | Securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Securities owned are carried at fair value with realized and
 unrealized gains and losses reflected in trading profits. Siebert clears all
 its security transactions through unaffiliated clearing firms on a fully
 disclosed basis. Accordingly, Siebert does not hold funds or securities for,
 or owe funds or securities to, its customers. Those functions are performed
 by the clearing firms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | Fair Value of Financial Instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Authoritative accounting guidance defines fair value, establishes a
 framework for measuring fair value and establishes a fair value hierarchy.
 Fair value is the price that would be received to sell an asset or paid to
 transfer a liability in an orderly transaction between participants at the
 measurement date. Fair value measurements are not adjusted for transaction
 costs. The fair value hierarchy prioritizes inputs to valuation techniques
 used to measure fair value into three levels:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Level 1  Unadjusted quoted prices in active markets for identical
 assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Level 2  Inputs other than quoted prices that are observable, either
 directly or indirectly, and reasonably available.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

6

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| |                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Level 3  Unobservable inputs which reflect the assumptions that
 management develops based on available information about the assumptions
 market participants would use in valuing the asset or liability.
| |                                                                                                                                                                                                             
| | The classification of financial instruments valued at fair value at
 June 30, 2012 is as follows:                                                                                                           

|                       |  |         |            |       |   |            | 
|---------------------- |  | ------- | ---------- | ----- | - | ---------- | 
|Financial
 Instruments |  | Level 1 |            | Total |  
|                       |  |         |            |       |  
|Cash equivalents       |  | $       | 20,743,000 |       | $ | 20,743,000 | 
|Securities             |  |         | 231,000    |       |   | 231,000    | 
|                       |  |         |            |       |   |            | 
|                       |  | $       | 20,974,000 |       | $ | 20,974,000 | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Securities consist of common stock valued on the last
 business day of the period at the last available reported sales price on the
 primary securities exchange (Level 1).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In May 2011, the Financial Accounting Standards Board issued guidance
 to expand disclosures for Level 3 measurements based on unobservable inputs.
 The Company adopted this standard in January 2012. The adoption of this
 standard did not have any impact on the Companys disclosures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. | Per Share Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Basic earnings (loss) per share is calculated by dividing net income
 (loss) by the weighted average outstanding common shares during the period.
 Diluted earnings per share is calculated by dividing net income by the number
 of shares outstanding under the basic calculation and adding all dilutive
 securities, which consist of options. There were no dilutive options for the
 three and six months ended June 30, 2012. Accordingly, basic and diluted
 income per share are the same for each period. The Company incurred a net loss
 for the three and six months ended June 30, 2011. Accordingly, basic and
 diluted net loss per common share are the same for each period as the effect
 of stock options is anti-dilutive. Shares underlying stock options not
 included in the diluted computation amounted to 478,200 at June 30, 2012 and
 1,228,200 at June 30, 2011.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. | 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, pursuant to the
 Rule. As of June 30, 2012, Siebert had net capital of approximately
 $18,440,000 as compared with net capital requirements of $250,000.                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|6. | Revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Commissions and fees earned on customer trades together with related
 clearing expenses are recorded on a trade-date basis. Fees, consisting
 principally of revenue participation with the Companys clearing broker in
 distribution fees and interest, are recorded as earned.Trading profits are
 also recorded on a trade-date basis.Investment banking revenue includes
 gains and fees, net of syndicate expenses, arising from underwriting
 syndicates in which the Company participates. Investment banking management
 fees are recorded on the offering date, sales concessions on the settlement
 date and underwriting fees at the time the underwriting is completed and                                                                                                                                                                                                       

7

---



|   |                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | the income is reasonably determinable.                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                   
|   | Interest
 is recorded on an accrual basis and dividends are recorded on the ex-dividend
 date.                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                   
|7. | Capital Transactions:                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                   
|   | On
 January 22, 2008, the Board of Directors of the Company authorized a buy back
 of up to 300,000 shares of common stock. Shares will be purchased from time
 to time, at managements discretion, in the open market and in private
 transactions. During the six months ended June 30, 2012, the Company
 purchased 4,302 shares at an average price of $1.67.
|   |                                                                                                                                                                                                                                                                                                                                                                   
|   | A
 summary of the Companys stock option transactions for the six months ended
 June 30, 2012 is presented below:                                                                                                                                                                                                                                                 

|                              |  |        |           |                                    |   |      | 
|----------------------------- |  | ------ | --------- | ---------------------------------- | - | ---- | 
|                              |  |        |           |                                    |   |      | 
|                              |  | Shares |           | Weighted
 Average
 Exercise
 Price |  
|                              |  |        |           |                                    |  
|                              |  |        |           |                                    |   |      | 
|Outstanding  January 1, 2012 |  |        | 1,228,200 |                                    | $ | 3.88 | 
|                              |  |        |           |                                    |   |      | 
|Expired                       |  |        | (750,000  | )                                  | $ | 4.30 | 
|                              |  |        |           |                                    |   |      | 
|                              |  |        |           |                                    |   |      | 
|Outstanding  June 30, 2012   |  |        | 478,200   | (a)                                | $ | 3.21 | 
|                              |  |        |           |                                    |   |      | 

|   |                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | (a) Shares are fully vested and exercisable.                                                                                                                                                                              
|   |                                                                                                                                                                                                                           
|   | As of June 30, 2012, there
 was no unrecognized compensation cost.                                                                                                                                                        
|   |                                                                                                                                                                                                                           
|8. | Investment
 In and Advances to Affiliates:                                                                                                                                                                                
|   |                                                                                                                                                                                                                           
|   | Siebert,
 Brandford, Shank & Co., L.L.C. (SBS)                                                                                                                                                                          
|   |                                                                                                                                                                                                                           
|   | Siebert holds a 49%
 ownership interest in SBS which is engaged in municipal bond underwritings.
 Income or loss from SBS is considered to be integral to Sieberts operations
 and material to its results of operations.
|   |                                                                                                                                                                                                                           
|   | Summarized financial data
 of SBS is set forth below.                                                                                                                                                                     

8

---



|                                                                                    |  |              |            |              |   |            |  
|----------------------------------------------------------------------------------- |  | ------------ | ---------- | ------------ | - | ---------- | -
|                                                                                    |  | June 30,2012 |            | June 30,2011 |  
|                                                                                    |  |              |            |              |  
|                                                                                    |  |              |            |              |  
|Total assets, including
 secured demand note of $1,200,000 due from Siebert         |  | $            | 30,370,000 |              |   |            |  
|Total liabilities,
 including subordinated liabilities of $1,200,000 due to Siebert |  |              | 12,291,000 |              |   |            |  
|Total members capital                                                              |  |              | 18,079,000 |              |   |            |  
|Regulatory minimum net
 capital requirement                                         |  |              | 250,000    |              |   |            |  
|Six months ended:                                                                   |  |              |            |              |   |            |  
|Total revenues                                                                      |  | $            | 14,054,000 |              | $ | 8,749,000  |  
|Net income (loss)                                                                   |  |              | 1,432,000  |              |   | (2,784,000 | )
|Three months ended:                                                                 |  |              |            |              |   |            |  
|Total revenues                                                                      |  |              | 8,428,000  |              |   | 4,804,000  |  
|Net income (loss)                                                                   |  |              | 1,730,000  |              |   | (614,000   | )

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Siebert charged SBS
 $38,000 for each of the six months ended June 30, 2012 and 2011, and $19,000
 for each of the three months ended June 30, 2012 and 2011, respectively, for
 general and administrative services, which Siebert believes approximates the
 cost of furnishing such services.                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Sieberts share of net
 income (loss) for the three months ended June 30, 2012 and 2011 amounted to
 $847,000 and $(301,000), respectively, and for the six months ended June 30,
 2012 and 2011 amounted to $701,000 and $(1.4) million, respectively.                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Siebert received a
 distribution from SBS of $81,000 during the six months ended June 30, 2012,
 and Sieberts share of undistributed earnings from SBS amounted to $8.5
 million at June 30, 2012. Such amount 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 among Siebert and the
 principals of SBS and SBSs continued compliance with its regulatory and net
 capital requirements.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | SBS
 Financial Products Company, LLC (SBSFPC)                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The Company has a 33.33%
 ownership interest in, and the two individual principals of SBS have an
 aggregate 66.66% ownership interest in, SBSFPC which engages in derivatives
 transactions related to the municipal underwriting business. Income and loss
 from SBSFPC is considered to be integral to the Companys operations and
 material to its results of operations.                                                                                                                             
|
| | Summarized financial data
 of SBSFPC is set forth below.                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|                       |  |                |             |                |  |         |  
|---------------------- |  | -------------- | ----------- | -------------- |  | ------- | -
|                       |  | June 30,
 2012 |             | June 30,
 2011 | 
|                       |  |                |             |                | 
|Total assets           |  | $              | 174,675,000 |                |  |         |  
|Total liabilities      |  |                | 173,756,000 |                |  |         |  
|Total members capital |  |                | 919,000     |                |  |         |  
|Six months ended:      |  |                |             |                |  |         |  
|Total revenues         |  |                | 51,000      |                |  | 62,000  |  
|Net loss               |  |                | (48,000     | )              |  | (34,000 | )
|Three months ended:    |  |                |             |                |  |         |  
|Total revenues         |  |                | 30,000      |                |  | 74,000  |  
|Net (loss) income      |  |                | (23,000     | )              |  | 29,000  |  

9

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | The
 Companys share of net (loss) income of SBSFPC for the three months ended
 June 30, 2012 and 2011 amounted to $(8,000) and $10,000, respectively. The
 Companys share of net (loss) for the six months ended June 30, 2012 and 2011
 amounted to $(16,000) and $(11,000), respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | At
 June 30, 2012, SBSFPC had cumulative distributions in excess of cumulative
 earnings in the amount of $281,000, of which the Companys share was $94,000.
 The Company received a distribution from SBSFPC of $2,000 during the six
 months ended June 30, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|9.  | Contingent Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | 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 customer 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
 are unable to fulfill their contractual obligations. There were no material
 losses for unsettled customer transactions for the six months ended June 30,
 2012 and 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | In 2009, Siebert was named as one of the defendants in a
 class action pending in the United States District Court, Southern District
 of New York. The complaint was brought on behalf of a class of purchasers in
 a public offering by Lehman Brothers Holdings, Inc. (LBHI) of
 $1,500,000,000 of 6.75% Subordinated Notes due 2017 (the Notes) and certain
 smaller issuances of other securities. The complaint asserted that Siebert
 and other underwriters of the Notes violated Section 11 of the Securities Act
 of 1933 in that relevant offering materials were false and misleading.
 Siebert had agreed to purchase $15 million of the Notes and $462,953 of the
 other securities as an underwriter in the offerings. Siebert and the plaintiffs
 class agreed to resolve all claims against Siebert in consideration of a $1
 million payment by Siebert. The settlement was accrued as of December 31,
 2011, paid into an escrow account during the first quarter of 2012 and
 approved by the court on May 2, 2012. As certain plaintiffs opted out of the
 class action or have brought claims involving other securities, additional
 liability to the Company is possible. At present, the Company is uncertain as
 to the potential liability, if any, in connection with the other potential
 plantiffs.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Siebert
 is party to certain claims, suits and complaints arising in the ordinary
 course of business including actions related to various offering of notes by
 LBHI referred to above. In the opinion of management, all such claims, suits and complaints are
 without merit, or involve amounts which would not have a significant effect
 on the financial position or results of operations of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Siebert
 is party to a Secured Demand Note Collateral Agreement, as amended on July
 27, 2012, with SBS which obligates Siebert to lend SBS, on a subordinated
 basis, up to $1,200,000. The secured demand note payable held by SBS and a
 related $1,200,000 receivable due from SBS are included in investments in and
 advances to equity investees in the accompanying consolidated statement of
 financial condition. Amounts that Siebert is obligated to lend under this
 arrangement are collateralized by cash equivalents of $1,532,000. Any amounts
 loaned will bear interest at 4% per annum and are repayable on August 31,
 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10. | Income Taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Income tax provision for the three months ended June 30, 2012 and 2011 represented various minimum state income taxes.
There is no provision for
other income taxes for the three months and the six months ended June 30, 2012,
because the Company utilized its net operating loss carry forward for which no
benefit was previously recognized. Due to                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

10

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | cumulative losses incurred by the Company and its subsidiaries during
 the prior three years, the Company has concluded that it is more likely than
 not that it will not realize its net deferred tax asset and, accordingly, has
 recorded a valuation allowance to fully offset its net deferred tax asset at
 June 30, 2012, which amounted to $3,791,000.                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|11. | Impairment of fixed assets:                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Effective June 30, 2012, the Company discontinued its relationship with a  software vendor,
 which had developed and maintained one of its two websites. As a result,  the Company wrote off its remaining unamortized
 carrying value of development  costs of $433,000 relating to the discontinued website. Effective July 1, 2012, such services
 for the remaining website will be provided by
 the Companys clearing broker .
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|12. | Significant customer:                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | During each of the three and six months ended June 30, 2012, commission
income earned from one customer accounted for approximately 19% of total revenue.                                                                                                                                                                                                                                                                           

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

This
discussion should be read in conjunction with our audited consolidated
financial statements as of and for the year ended December 31, 2011, and the
unaudited consolidated financial statements and the notes thereto contained
elsewhere in this Quarterly Report.

Business Environment

Our working capital is invested primarily
in money market funds, so that liquidity has not been materially affected. The
crisis did have the effect of reducing participation in the securities market
by our retail and institutional customers, which had an adverse effect on our
revenues. However, the stock market has improved in the six months ended June 30, 2012
and consequently so have our revenues. Our affiliate, Siebert, Brandford, Shank
& Co., L.L.C. (SBS) had income for the current six months period of
approximately $1.4 million as a result of industry volumes increasing in the
current period this year as compared to a loss of $2.8 million for the same period
last year due to municipalities struggling with the fiscal crisis, concerns
about defaults at the state and local level and the expiration of the Build
America Bonds program in 2011. This increase in SBSs income resulted in income
to the Company of $701,000 for the current six month period. Our expenses
include the costs of an arbitration proceeding commenced by a former employee
following the termination of his employment, which remains unresolved. The
Company believes that the action is without merit, but the costs of defense,
which are included as professional expenses, have adversely affected the
Companys results of operation and may continue to affect the results of
operations until the action is completed. Competition in the brokerage industry
remains intense.

The following table sets forth certain metrics as of June 30, 2012 and
2011 and for the three and six months ended June 30, 2012 and 2011,
respectively, which we use in evaluating our business.

|                                       |  |                                      |        |                                    |   |         |  |      |         |  |   |         | 
|-------------------------------------- |  | ------------------------------------ | ------ | ---------------------------------- | - | ------- |  | ---- | ------- |  | - | ------- | 
|                                       |  | For the Three Months
 ended June 30, |        | For the Six Months
 ended June 30, |  
|Retail
 Customer Activity:             |  | 2012                                 |        | 2011                               |   | 2012    |  | 2011 |        
|                                       | 
|                                       |  |                                      |        |                                    |   |         |  |      |        
|Total retail
 trades:                  |  |                                      | 86,096 |                                    |   | 102,202 |  |      | 189,219 |  |   | 216,231 | 
|Average
 commission per retail
 trade: |  | $                                    | 30.16  |                                    | $ | 20.72   |  | $    | 31.03   |  | $ | 21.25   | 

11

---



|                                                         |  |                |        |      |   |        | 
|-------------------------------------------------------- |  | -------------- | ------ | ---- | - | ------ | 
|                                                         |  | As of June 30, |       
|                                                         |  |                |       
|Retail
 customer balances:                               |  | 2012           |        | 2011 |  
|                                                         |  |                |       
|Retail
 customer net worth (in billions):                |  | $              | 6.5    |      | $ | 6.8    | 
|Retail
 customer money market fund value
 (in billions): |  | $              | 1.0    |      | $ | 1.0    | 
|Retail
 customer margin debit balances (in
 millions):   |  | $              | 221.6  |      | $ | 232.0  | 
|Retail
 customer accounts with positions:                |  |                | 42,934 |      |   | 45,994 | 
|                                                         |  |                |        |      |   |        | 

Description:

| |   |                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------
| |  | Total retail trades represent retail trades that generate
 commissions.                                                                     
| |   |                                                                                                                                             
| |  | Average commission per retail trade represents the average commission
 generated for all types of retail customer trades.                   
| |   |                                                                                                                                             
| |  | Retail customer net worth represents the total value of securities
 and cash in the retail customer accounts before deducting margin debits.
| |   |                                                                                                                                             
| |  | Retail customer money market fund value represents all retail
 customers accounts invested in money market funds.                           
| |   |                                                                                                                                             
| |  | Retail customer margin debits balances represent credit extended to
 our customers to finance their purchases against current positions.    
| |   |                                                                                                                                             
| |  | Retail customer accounts with positions represent retail customers
 with cash and/or securities in their accounts.                          

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

Recent Developments

On January 23, 2008, the Board of Directors of the Company authorized a
buy back of up to 300,000 shares of common stock. Shares will be purchased from
time to time, in our discretion, in the open market and in private
transactions. During the six months ended June 30, 2012, the Company purchased
4,302 shares at an average price of $1.67.

Critical Accounting Policies

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

12

---



used in determining the useful lives of intangible assets, and the fair
market value of intangible assets and securities. Our management believes that
its estimates are reasonable.

Results of Operations

We had net
income of $447,000 and $1,072,000 for the three months and six months ended
June 30, 2012, respectively.

Three Months Ended
June 30, 2012 Compared to Three Months Ended June 30, 2011

Total
revenues for the three months ended June 30, 2012 were $5.6 million, an
increase of $1.1 million or 25.0% from the same period in 2011.

Commission and fee income for the
three months ended June 30, 2012 was $3.9 million, an increase of $340,000 or 9.6% from the same period in 2011 primarily due
to an increase in average commissions charged per trade as a result of an increase in retail options trading by one customer,
which accounted for approximately 26% of total commissions and fees, as well as an increase in our commission
recapture operations offset by a decrease in institutional trading commissions.

Investment
banking revenues for the three months ended June 30, 2012 were $1.2 million, an
increase of $792,000 or 195.1% from the same period in 2011 due to our
participation in larger new issues in the equity capital markets.

Trading
profits were $531,000 for the three months ended June 30, 2012, an increase of
$5,000 or 1.0% from the same period in 2011 due to an overall increase in
trading volume primarily in the debt markets.

Interest
and dividends for the three months ended June 30, 2012 were $17,000, a decrease
of $10,000 or 37.0% from the same period in 2011 primarily due to lower yields.

Total
expenses for each of the three months ended June 30, 2012 and 2011 were $6.0
million.

Employee
compensation and benefit costs for the three months ended June 30, 2012 were
$2.6 million, an increase $251,000 or 10.6% from the same period in 2011 due to
an increase in commissions paid based on production in the capital markets and
retail operations offset by a decrease in compensation due to a reduction in
headcount for registered representatives.

Clearing
and floor brokerage costs for the three months ended June 30, 2012 were
$667,000, a decrease of $23,000 or 3.3% from the same period in 2011 due to an
overall decrease in retail trading offset by higher clearing costs for
increased retail options trading volume, which costs more to clear.
Additionally, the decrease in execution charges for institutional trading was
offset by an increase in clearing charges for our commission recapture
operations.

Professional
fees for the three months ended June 30, 2012, were $820,000, a decrease of
$580,000 or 41.4% from the same period in 2011 primarily due to a decrease in
legal fees relating to a dispute with a former employee offset by increases in
consulting fees relating to our Information Technology department.

Advertising
and promotion expenses for the three months ended June 30, 2012 were $89,000, a
decrease of $4,000 or 4.3% from the same period in 2011 due to a decrease in
public relations costs.

Communications
expense for the three months ended June 30, 2012, was $498,000, a decrease of
$29,000 or 5.5% from the same period in 2011 primarily due to a decrease in
Bloomberg devices due to fewer employees in the Institutional Trading
department and the result of the closing of our Surfside and Naples branches in
Florida during the fourth quarter of 2011.

13

---



Occupancy
costs for the three months ended June 30, 2012 were $226,000, a decrease of
$46,000 or 16.9% from the same period in 2011 due to the closing of our
Surfside and Naples branches in Florida during the fourth quarter of 2011.

Write
off of software development costs of $433,000 was due to the Companys
discontinuation of its relationship with a software vendor on June 30, 2012,
which had developed and maintained its website. As a result, the Company wrote
off its remaining unamortized carrying value of development costs of $433,000.
Effective July 1, 2012, such services will be provided by our clearing broker.

Other
general and administrative expenses for the three months ended June 30, 2012
were $610,000, a decrease of $23,000 or 3.6% from the same period in 2011 due
to a decrease in depreciation, training, subscriptions and data storage costs.

Income
from Sieberts equity investment in SBS, an entity in which Siebert holds a 49%
equity interest, for the three months ended June 30, 2012, was $847,000,
compared to a loss of $301,000 from the same period in 2011 due to SBS
participating in more senior managed or co-managed transactions. Loss from our
equity investment in SBS Financial Products Company, LLC, an entity in which we
hold a 33.33% equity interest (SBSFPC) for the three months ended June 30,
2012, was $8,000 as compared to income of $10,000 for the same period in 2011.
The losses in 2012 and 2011 were due to the mark to market loss in positions.
Income and loss from equity investees is considered to be integral to our
operations and material to the results of operations.

The
tax provision for the three months ended June 30, 2012 and 2011 was $43,000 and
$1,000, respectively, representing various minimum state income taxes. There is
no provision for other income taxes for the three months ended June 30, 2012
because the Company utilized its net operating loss carry forward for which no
benefit was previously recognized. No tax benefit related to the pre-tax loss
was recorded for the three months ended June 30, 2011 due to the recording of a
full valuation allowance to offset deferred tax assets based on recent losses
and the likelihood of realization of such assets.

Six Months Ended
June 30, 2012 Compared to Six Months Ended June 30, 2011

Total
revenues for the six months ended June 30, 2012 were $12.2 million, an increase
of $2.2 million or 21.8% from the same period in 2011.

Commission and fee income for
the six months ended June 30, 2012 was $9.0 million, an increase of $1.6 million or 20.8% from the same period in 2011
primarily due to an increase in average commissions charged per trade as a result of an increase in retail options trading by
one customer, which accounted for approximately 26% of total commission and fees, as well as an increase in our institutional
trading commissions and our commission recapture operations.

Investment
banking revenues for the six months ended June 30, 2012 were $1.7 million, an
increase of $129,000 or 8.2% from the same period in 2011 due to our
participation in more new issues in the equity and debt capital markets.

Trading
profits were $1.4 million for the six months ended June 30, 2012, an increase
of $491,000 or 54.4% from the same period in 2011 due to an overall increase in
customer trading volume in the debt markets.

Interest
and dividends for the six months ended June 30, 2012 were $40,000, an increase
of $4,000 or 1.1% from the same period in 2011 primarily due to higher cash
balances.

Total
expenses for the six months ended June 30, 2012 were $11.7 million, a decrease
of $671,000 or 5.4% from the same period in 2011.

Employee
compensation and benefit costs for the six months ended June 30, 2012 were $5.1
million, an increase of $278,000 or 5.7% from the same period in 2011 due to an
increase in commissions paid based on

14

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production in
the capital markets and retail operations as well as an increase in health
benefits offset by a reduction in headcount for registered representatives.

Clearing
and floor brokerage costs for the six months ended June 30, 2012 were $1.6
million, an increase of $20,000 or 1.2% from the same period in 2011 despite an
overall decrease in retail trading volume. The increase in costs reflects a
higher volume of retail options trading which costs more to clear as well as an
increase in clearing charges for our commission recapture operations.

Professional
fees for the six months ended June 30, 2012 were $1.6 million, a decrease of
$1.2 million or 42.8% from the same period in 2011 primarily due to a decrease
in legal fees relating to a dispute with a former employee offset by increases
in consulting fees relating to our Information Technology department and our
commission recapture operations.

Advertising
and promotion expenses for the six months ended June 30, 2012 were $227,000, an
increase of $34,000 or 17.6% from the same period in 2011 primarily due to an
increase in online advertising.

Communications
expense for the six months ended June 30, 2012 were $1.0 million, a decrease of
$98,000 or 9.0% from the same period in 2011 primarily due to a decrease in
Bloomberg devices due to fewer employees in the Institutional Trading
department and the result of the closing of our Surfside and Naples branches in
Florida during the fourth quarter of 2011.

Occupancy
costs for the six months ended June 30, 2012 were $477,000, a decrease of
$66,000 or 12.2% from the same period in 2011 due to the closing of our
Surfside and Naples branches in Florida during the fourth quarter of 2011.

Write
off of software development costs of $433,000 was due to the Companys
discontinuation of its relationship with a software vendor on June 30, 2012,
which had developed and maintained its website. As a result, the Company wrote
off its remaining unamortized carrying value of development costs of $433,000.
Effective July 1, 2012, such services will be provided by our clearing broker.

Other
general and administrative expenses for the six months ended June 30, 2012 were
$1.3 million, a decrease of $69,000 or 5.2% from the same period in 2011 due to
a decrease in depreciation, training, subscriptions, computer updates and data
storage costs.

Income
from Sieberts equity investment in SBS, an entity in which Siebert holds a 49%
equity interest for the six months ended June 30, 2012, was $701,000, compared
to a loss of $1.4 million from the same period in 2011 due to SBS participating
in more senior managed or co-managed transactions. Loss from our equity
investment in SBSFPC, an entity in which we hold a 33.33% equity interest, for
the six months ended June 30, 2012, was $16,000 as compared to a loss of
$11,000 from the same period in 2011. The losses in 2012 and 2011 were due to
the mark to market loss in positions. Income and loss from equity investees is
considered to be integral to our operations and material to the results of
operations.

The
tax provision for the six months ended June 30, 2012 and 2011 was $55,000 and
$12,000, respectively, representing various minimum state income taxes. There
is no provision for other income taxes for the six months ended June 30, 2012
because the Company utilized its net operating loss carry forward for which no
benefit was previously recognized. No tax benefit related to the pre-tax loss
was recorded for the six months ended June 30, 2011 due to the recording of a
full valuation allowance to offset deferred tax assets based on recent losses
and the likelihood of realization of such assets.

Liquidity and Capital Resources

Our
assets are highly liquid, consisting generally of cash in money market funds.
Our total assets at June 30, 2012 were $35.6 million. As of that date, we
regarded $22.8 million, or 64%, of total assets as highly liquid.

15

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Siebert
is subject to the net capital requirements of the SEC, the NYSE and other
regulatory authorities. At June 30, 2012, Sieberts regulatory net capital was
$18.4 million, $18.2 million in excess of its minimum capital requirement of
$250,000.

On January 22, 2008, the Board of Directors of
the Company authorized a buy back of up to 300,000 shares of common stock.
During the six months ended June 30, 2012, 4,302 shares were purchased at an
average price of $1.67 per share.

Siebert
has entered into a Secured Demand Note Collateral Agreement with SBS under
which Siebert is obligated to lend to SBS up to $1.2 million on a subordinated
basis collateralized by cash equivalents of approximately $1.5 million as of
June 30, 2012. Amounts pledged by Siebert under the facility are reflected on
our balance sheet as cash equivalents  restricted. SBS pays Siebert interest
on this amount at the rate of 4% per annum. The facility expires on August 31,
2014, 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 invested temporarily in dollar denominated money market
funds. These investments are not subject to material changes in value due to
interest rate movements.

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. There were no material
losses for unsettled customer transaction as of June 30, 2012.

Item 4. Controls and Procedures

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

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

16

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Part II - OTHER INFORMATION

Item 1. Legal
Proceedings

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

Item 1A. Risk
Factors

In addition to the other information set forth in this report, you
should carefully consider the factors discussed in Part I, Item 1A. Risk
Factors in our Annual Report on Form 10-K for the year ended December 31,
2011, which could materially affect our business, financial position and
results of operations. There are no material changes from the risk factors set
forth in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for
the year ended December 31, 2011.

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

On January 23, 2008, our Board of Directors authorized the repurchase
of up to 300,000 shares of our common stock. Shares will be purchased from time
to time, in our discretion, in the open market and in private transactions.
There is no expiration date for our stock repurchase plan. We purchased 452
shares at an average price of $1.82 in the second quarter of 2012.

A summary of our repurchase activity for the three months ended June
30, 2012 is as follows:

Issuer Purchases of Equity Securities

|           |                                  |                              |                                                                                  |                                                                                 |  |  |  |  |  |  |  | 
|---------- | -------------------------------- | ---------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|Period     | Total
Number
Of Shares
Purchased | Average
Price
Paid Per Share | Total
Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs | Maximum

Number of Shares
That May Yet Be
Purchased Under
The Plans or
Programs
|           |                                  |                              |                                                                                  |                                                                                
|April 2012 | 389                              | $1.82                        | 113,003                                                                          | 186,997                                                                        
|           |                                  |                              |                                                                                  |                                                                                
|May 2012   |                                  |                              | 113,003                                                                          | 186,997                                                                        
|           |                                  |                              |                                                                                  |                                                                                
|June 2012  | 63                               | 1.80                         | 113,066                                                                          | 186,934                                                                        
|           |                                  |                              |                                                                                  |                                                                                 |  |  |  |  |  |  |  | 
|           |                                  |                              |                                                                                  |                                                                                 |  |  |  |  |  |  |  | 
|Total      | 452                              | $1.82                        | 113,066                                                                          | 186,934                                                                        
|           |                                  |                              |                                                                                  |                                                                                

All of the
purchases were made in open market transactions.

17

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Item 6. Exhibits

| |          |                                                                                                                                                                      
| | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1     | Certification
 of Muriel F. Siebert pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a),
 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(a) and
 15d-14(a), 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.                                            
| |          |                                                                                                                                                                      
| | 101.INS* | XBRL Instance Document                                                                                                                                               
| |          |                                                                                                                                                                      
| | 101.SCH* | XBRL Taxonomy Extension Schema Document                                                                                                                              
| |          |                                                                                                                                                                      
| | 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document                                                                                                                
| |          |                                                                                                                                                                      
| | 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document                                                                                                                 
| |          |                                                                                                                                                                      
| | 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document                                                                                                                      
| |          |                                                                                                                                                                      
| | 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document                                                                                                               

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

18

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SIGNATURES

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

| |                          |                                                       | 
| | ------------------------ | ----------------------------------------------------- | 
| | SIEBERT
 FINANCIAL CORP.
| |                          |                                                       | 
| | By:                      | /s/ Muriel
 F. Siebert                                | 
| |                          |                                                       | 
| |                          | Muriel F.
 Siebert                                    | 
| |                          | Chairwoman
 and President                            
| |                          | (principal
 executive officer)                       
| |                          |                                                       | 
| | Dated: August 14, 2012   |                                                      
| |                          |                                                       | 
| | 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, 2012   |                                                      

19

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