---

---

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

|           |                                                                                    
|---------- | -----------------------------------------------------------------------------------
|(Mark One)
|          
|x          | Quarterly report under
  Section 13 or 15(d) of the Securities Exchange Act of 1934
|           |                                                                                    
|           | For the quarterly period ended September 30, 2006                                  
|           |                                                                                    
|o          | Transition report under
  Section 13 or 15(d) of the Exchange Act                  
|           |                                                                                    
|           | For the transition period from
  ______________________ to ______________________  
|           |                                                                                    
|           | Commission file number 0-5703                                                      

|                                                                                     |  |                                       
|------------------------------------------------------------------------------------ |  | --------------------------------------
|Siebert
  Financial Corp.                                                           
|                                                                                    
|(Exact Name of Issuer
  as Specified in its Charter)                                
|                                                                                    
|New
  York                                                                           |  | 11-1796714                            
|                                                                                     |  |                                       
|(State or Other
  Jurisdiction of Incorporation)                                     |  | (I.R.S. Employer
  Identification No.)
|                                                                                     |  |                                       
|885
  Third Avenue, New York, NY 10022                                              
|                                                                                    
|(Address of Principal
  Executive Offices)                                          
|                                                                                    
|(212)
  644-2400                                                                    
|                                                                                    
|(Issuers Telephone
  Number, Including Area Code)                                  
|                                                                                    
|                                                                                    
|(Former Name, Former
  Address and Former Fiscal Year, if Changed Since Last Report)

Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.

Yes x     No o

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

(Check one) Large Accelerated Filer  o Accelerated Filer  o
Non-Accelerated Filer  x

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

Yes o     No x

State the number of shares outstanding of each of the
issuers classes of common equity, as of the latest practicable date: As of
November 8, 2006, there were 22,108,287 shares of Common Stock, par value $.01
per share, outstanding.

---

---



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

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

1

---



Part
I - FINANCIAL INFORMATION

Item 1.
Financial Statements.

Siebert Financial Corp. & Subsidiaries
Consolidated Statements of Financial Condition

|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ---------- | -------------------- | - | ---------- | -
|                                                                                                                                                                                                                                                   |  | September 30, 
  2006 |            | December 31, 
  2005 |  
|                                                                                                                                                                                                                                                   |  | (Unaudited)           |            |                      |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|ASSETS                                                                                                                                                                                                                                             |  |                       |            |                      |   |            |  
|Cash and cash equivalents                                                                                                                                                                                                                          |  | $                     | 32,124,000 |                      | $ | 30,980,000 |  
|Cash equivalents  restricted                                                                                                                                                                                                                      |  |                       | 1,300,000  |                      |   | 1,300,000  |  
|Receivable from clearing brokers                                                                                                                                                                                                                   |  |                       | 1,301,000  |                      |   | 2,404,000  |  
|Furniture, equipment and leasehold improvements, net                                                                                                                                                                                               |  |                       | 590,000    |                      |   | 828,000    |  
|Investment in and advances to equity investees                                                                                                                                                                                                     |  |                       | 6,680,000  |                      |   | 4,428,000  |  
|Prepaid expenses and other assets                                                                                                                                                                                                                  |  |                       | 942,000    |                      |   | 992,000    |  
|Intangibles, net                                                                                                                                                                                                                                   |  |                       | 1,260,000  |                      |   | 1,494,000  |  
|Deferred tax asset                                                                                                                                                                                                                                 |  |                       | 513,000    |                      |   | 601,000    |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|                                                                                                                                                                                                                                                   |  | $                     | 44,710,000 |                      | $ | 43,027,000 |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                               |  |                       |            |                      |   |            |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|Accounts payable and accrued liabilities                                                                                                                                                                                                           |  |                       | 5,155,000  |                      |   | 5,975,000  |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|Contingencies                                                                                                                                                                                                                                      |  |                       |            |                      |   |            |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|Stockholders equity:                                                                                                                                                                                                                              |  |                       |            |                      |   |            |  
|Common stock, $.01 par value; 49,000,000 shares authorized,
23,039,402
  shares issued at September 30, 2006 and December 31, 2005, and 22,106,001 and
  22,122,968 shares outstanding at September 30, 2006 and December 31, 2005,
  respectively |  |                       | 230,000    |                      |   | 230,000    |  
|Additional paid-in capital                                                                                                                                                                                                                         |  |                       | 18,181,000 |                      |   | 18,063,000 |  
|Retained earnings                                                                                                                                                                                                                                  |  |                       | 25,327,000 |                      |   | 22,896,000 |  
|Less: 933,401 and 916,434 shares of treasury stock, at cost at
  September 30, 2006 and December 31, 2005, respectively                                                                                                                            |  |                       | (4,183,000 | )                    |   | (4,137,000 | )
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|                                                                                                                                                                                                                                                   |  |                       | 39,555,000 |                      |   | 37,052,000 |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  
|                                                                                                                                                                                                                                                   |  | $                     | 44,710,000 |                      | $ | 43,027,000 |  
|                                                                                                                                                                                                                                                   |  |                       |            |                      |   |            |  

See notes to consolidated financial statements.

2

---



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

|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|---------------------------------------------- |  | ------------------------------------ | ---------- | ----------------------------------- | - | ---------- |  | ---- | ---------- |  | - | ---------- | 
|                                               |  | Three
  Months Ended
  September 30, |            | Nine
  Months Ended
  September 30, |  
|                                               |  |                                      |            |                                     |  
|                                               |  | 2006                                 |            | 2005                                |   | 2006       |  | 2005 |           
|                                               |  |                                      |            |                                     |   |            |  |      |           
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|Revenues:                                      |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|Commissions and
  fees                         |  | $                                    | 5,326,000  |                                     | $ | 6,471,000  |  | $    | 18,226,000 |  | $ | 18,876,000 | 
|Investment
  banking                           |  |                                      | 231,000    |                                     |   | 744,000    |  |      | 791,000    |  |   | 1,726,000  | 
|Trading profits                                |  |                                      | 259,000    |                                     |   | 169,000    |  |      | 612,000    |  |   | 607,000    | 
|Income from
  equity investees                 |  |                                      | 1,472,000  |                                     |   | 475,000    |  |      | 3,556,000  |  |   | 1,509,000  | 
|Interest and
  dividends                       |  |                                      | 444,000    |                                     |   | 243,000    |  |      | 1,233,000  |  |   | 606,000    | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|                                               |  |                                      | 7,732,000  |                                     |   | 8,102,000  |  |      | 24,418,000 |  |   | 23,324,000 | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|                                              
|Expenses:                                      |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|Employee
  compensation and benefits           |  |                                      | 2,577,000  |                                     |   | 2,523,000  |  |      | 7,825,000  |  |   | 7,733,000  | 
|Clearing fees,
  including floor brokerage     |  |                                      | 1,128,000  |                                     |   | 1,375,000  |  |      | 3,958,000  |  |   | 4,042,000  | 
|Professional
  fees                            |  |                                      | 799,000    |                                     |   | 1,423,000  |  |      | 2,570,000  |  |   | 3,552,000  | 
|Advertising and
  promotion                    |  |                                      | 206,000    |                                     |   | 214,000    |  |      | 880,000    |  |   | 754,000    | 
|Communications                                 |  |                                      | 466,000    |                                     |   | 502,000    |  |      | 1,329,000  |  |   | 1,686,000  | 
|Occupancy                                      |  |                                      | 296,000    |                                     |   | 268,000    |  |      | 862,000    |  |   | 790,000    | 
|Other general
  and administrative             |  |                                      | 713,000    |                                     |   | 862,000    |  |      | 2,183,000  |  |   | 2,497,000  | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|                                               |  |                                      | 6,185,000  |                                     |   | 7,167,000  |  |      | 19,607,000 |  |   | 21,054,000 | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|Income before
  income taxes                   |  |                                      | 1,547,000  |                                     |   | 935,000    |  |      | 4,811,000  |  |   | 2,270,000  | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|Provision for
  income taxes                   |  |                                      | 650,000    |                                     |   | 393,000    |  |      | 2,021,000  |  |   | 953,000    | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|Net income                                     |  | $                                    | 897,000    |                                     | $ | 542,000    |  |      | 2,790,000  |  | $ | 1,317,000  | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|Net income per
  share of common stock Basic  |  | $                                    | .04        |                                     | $ | .03        |  | $    | .13        |  | $ | .06        | 
|Net income per
  share of common stock-Diluted |  | $                                    | .04        |                                     | $ | .02        |  | $    | .13        |  | $ | .06        | 
|                                               |  |                                      |            |                                     |   |            |  |      |            |  |   |            | 
|Weighted average shares outstanding - Basic    |  |                                      | 22,116,680 |                                     |   | 22,084,281 |  |      | 22,120,669 |  |   | 22,083,153 | 
|Weighted average shares outstanding - Diluted  |  |                                      | 22,133,267 |                                     |   | 22,177,898 |  |      | 22,139,055 |  |   | 22,189,152 | 

See notes to consolidated financial statements.

3

---



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

|                                                                                    |  |                                     |            |      |   |            |  
|----------------------------------------------------------------------------------- |  | ----------------------------------- | ---------- | ---- | - | ---------- | -
|                                                                                    |  | Nine
  Months Ended
  September 30, |           
|                                                                                    |  |                                     |           
|                                                                                    |  | 2006                                |            | 2005 |  
|                                                                                    |  |                                     |            |      |  
|                                                                                    |  |                                     |            |      |  
|Cash
  flows from operating activities:                                             |  |                                     |            |      |   |            |  
|Net income                                                                          |  | $                                   | 2,790,000  |      | $ | 1,317,000  |  
|Adjustments to
  reconcile net income to net cash provided by operating activities: |  |                                     |            |      |   |            |  
|Depreciation and
  amortization                                                     |  |                                     | 582,000    |      |   | 898,000    |  
|Income from
  equity investees                                                      |  |                                     | (3,556,000 | )    |   | (1,509,000 | )
|Distribution from equity investees                                                  |  |                                     | 1,418,000  |      |   | 1,555,000  |  
|Deferred taxes                                                                      |  |                                     | 88,000     |      |   | (129,000   | )
|Employee stock
  based compensation                                                 |  |                                     | 118,000    |      |   |            |  
|Changes in:                                                                         |  |                                     |            |      |   |            |  
|Receivable from
  clearing brokers                                                  |  |                                     | 1,103,000  |      |   | (449,000   | )
|Prepaid expenses
  and other assets                                                 |  |                                     | 50,000     |      |   | 670,000    |  
|Accounts payable
  and accrued liabilities                                          |  |                                     | (820,000   | )    |   | 291,000    |  
|                                                                                    |  |                                     |            |      |   |            |  
|Net cash
  provided by operating activities                                         |  |                                     | 1,773,000  |      |   | 2,644,000  |  
|                                                                                    |  |                                     |            |      |   |            |  
|                                                                                    |  |                                     |            |      |   |            |  
|Cash
  flows from investing activities:                                             |  |                                     |            |      |   |            |  
|Purchase of
  furniture, equipment and leasehold improvements                       |  |                                     | (110,000   | )    |   | (67,000    | )
|Advances to
  equity investees                                                      |  |                                     | (114,000   | )    |   | (410,000   | )
|                                                                                    |  |                                     |            |      |   |            |  
|Net cash used in
  investing activities                                             |  |                                     | (224,000   | )    |   | (477,000   | )
|                                                                                    |  |                                     |            |      |   |            |  
|                                                                                    |  |                                     |            |      |   |            |  
|Cash
  flows from financing activities:                                             |  |                                     |            |      |   |            |  
|Proceeds from
  exercise of options                                                 |  |                                     |           |      |   | 27,000     |  
|Dividend on
  common stock                                                          |  |                                     | (359,000   | )    |   |           |  
|Repurchase of
  common stock                                                        |  |                                     | (46,000    | )    |   | (30,000    | )
|                                                                                    |  |                                     |            |      |   |            |  
|Net cash used in
  financing activities                                             |  |                                     | (405,000   | )    |   | (3,000     | )
|                                                                                    |  |                                     |            |      |   |            |  
|                                                                                    |  |                                     |            |      |   |            |  
|Net increase in
  cash and cash equivalents                                         |  |                                     | 1,144,000  |      |   | 2,164,000  |  
|                                                                                    |  |                                     |            |      |   |            |  
|Cash and cash
  equivalents - beginning of period                                   |  |                                     | 30,980,000 |      |   | 28,748,000 |  
|                                                                                    |  |                                     |            |      |   |            |  
|                                                                                    |  |                                     |            |      |   |            |  
|Cash and cash
  equivalents - end of period                                         |  | $                                   | 32,124,000 |      | $ | 30,912,000 |  
|                                                                                    |  |                                     |            |      |   |            |  
|                                                                                    |  |                                     |            |      |   |            |  
|Supplemental
  cash flow disclosures:                                               |  |                                     |            |      |   |            |  
|Cash paid for:                                                                      |  |                                     |            |      |   |            |  
|Income taxes                                                                        |  | $                                   | 2,312,000  |      | $ | 410,000    |  

See notes to consolidated financial statements.

4

---



Siebert
Financial Corp. & Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2006 and 2005
(Unaudited)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Organization and Basis of
  Presentation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The consolidated financial statements include the
  accounts of Siebert Financial Corp. (the Company) and its wholly owned
  subsidiaries Muriel Siebert & Co., Inc. (Siebert) and Siebert Womens
  Financial Network, Inc. (WFN). All material intercompany balances have been
  eliminated. Investment in two entities in which Siebert and the Company has
  ownership interest of 49% and 33%, respectively, are accounted for by the
  equity method. The statements are unaudited; however, in the opinion of
  management, all adjustments considered necessary to reflect fairly the
  Companys financial position and results of operations, consisting of normal
  recurring adjustments, have been included.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The accompanying consolidated financial statements
  do not include all of the information and footnote disclosures normally
  included in financial statements prepared in accordance with generally
  accepted accounting principles in the United States of America. Accordingly,
  the statements should be read in conjunction with the audited financial
  statements included in the Companys Annual Report on Form 10-K for the year
  ended December 31, 2005. Because of the nature of the Companys business, the
  results of any interim period are not necessarily indicative of results for a
  full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Certain prior period amounts have been reclassified
  to conform with current period presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2. | Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In December 2004, the Financial Accounting Standards
  Board (FASB) issued SFAS No. 123R Share-Based Payment (SFAS 123R),
  which requires all share-based payments to employees, including grants of
  employee stock options, to be recognized in the statement of operations as an
  operating expense, based on their fair values on grant date. Prior to the
  adoption of SFAS 123R the Company accounted for stock based compensation
  using the intrinsic value. The Company adopted the provisions of SFAS No.
  123R effective January 1, 2006, using the modified prospective transition
  method. Under the modified prospective method, non-cash compensation expense
  is recognized for the portion of outstanding stock option awards granted
  prior to the adoption of SFAS 123R for which service has not been rendered,
  and for any future stock option grants. Accordingly, periods prior to
  adoption have not been restated. The Company recognizes share-based
  compensation costs on a straight-line basis over the requisite service
  periods of awards. That cost is recognized as compensation expense over the
  service period, which would normally be the vesting period of the options.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The following table illustrates the effect on net
  income and earnings per share if the fair value based method had been applied
  to the prior periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                                                                                                       |  |                                            |         |                                           |   |           |  
|---------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------ | ------- | ----------------------------------------- | - | --------- | -
|                                                                                                                       |  | Three
  months ended,
  September 30, 2005 |         | Nine
  months ended,
  September 30, 2005 |  
|                                                                                                                       |  |                                            |         |                                           |  
|                                                                                                                       |  |                                            |         |                                           |   |           |  
|Net income, as
  reported                                                                                              |  | $                                          | 542,000 |                                           | $ | 1,317,000 |  
|Stock-based
  employee compensation determined under the fair value-based method, prior to
  the adoption of SFAS 123R |  |                                            | (67,000 | )                                         |   | (203,000  | )
|                                                                                                                       |  |                                            |         |                                           |   |           |  
|Pro forma net
  income                                                                                                 |  | $                                          | 475,000 |                                           | $ | 1,114,000 |  
|                                                                                                                       |  |                                            |         |                                           |   |           |  
|                                                                                                                       |  |                                            |         |                                           |   |           |  
|Net income per
  share  basic:                                                                                        |  |                                            |         |                                           |   |           |  
|                                                                                                                       |  |                                            |         |                                           |   |           |  
|As reported                                                                                                            |  | $                                          | .03     |                                           | $ | .06       |  
|Pro forma                                                                                                              |  | $                                          | .02     |                                           | $ | .05       |  
|                                                                                                                       |  |                                            |         |                                           |   |           |  
|Net income per
  share  diluted:                                                                                      |  |                                            |         |                                           |   |           |  
|                                                                                                                       |  |                                            |         |                                           |   |           |  
|As reported                                                                                                            |  | $                                          | .02     |                                           | $ | .06       |  
|Pro forma                                                                                                              |  | $                                          | .02     |                                           | $ | .05       |  

5

---



Stock based compensation expense recognized in the
Consolidated Statement of Income was $14,000 and $118,000, respectively, for
the three and nine months ended September 30, 2006.

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

|                                                          |  |           |  |                                                    |      |                                                      |  |                               |  |   |         | 
|--------------------------------------------------------- |  | --------- |  | -------------------------------------------------- | ---- | ---------------------------------------------------- |  | ----------------------------- |  | - | ------- | 
|                                                          |  | Shares    |  | Weighted-
  Average
  Exercise
  Price per
  Share |      | Weighted-
  Average
  Remaining
  Contractual
  Term |  | Aggregate
  Intrinsic
  Value | 
|                                                          |  |           |  |                                                    |      |                                                      |  |                               | 
|Outstanding at
  January 1, 2006                          |  | 1,767,610 |  | $                                                  | 4.16 |                                                      |  |                               |  |   |         | 
|                                                          |  |           |  |                                                    |      |                                                      |  |                               |  |   |         | 
|Granted                                                   |  | 25,000    |  | $                                                  | 2.75 |                                                      |  |                               |  |   |         | 
|                                                          |  |           |  |                                                    |      |                                                      |  |                               |  |   |         | 
|Exercised                                                 |  | 0         |  | $                                                  |     |                                                      |  |                               |  |   |         | 
|                                                          |  |           |  |                                                    |      |                                                      |  |                               |  |   |         | 
|Cancelled                                                 |  | 27,000    |  | $                                                  | 4.03 |                                                      |  |                               |  |   |         | 
|                                                          |  |           |  |                                                    |      |                                                      |  |                               |  |   |         | 
|Outstanding at
  September 30, 2006                       |  | 1,765,610 |  | $                                                  | 4.14 |                                                      |  | 4.50                          |  | $ | 137,000 | 
|                                                          |  |           |  |                                                    |      |                                                      |  |                               |  |   |         | 
|Fully vested and
  expected to vest at September 30, 2006 |  | 1,765,610 |  | $                                                  | 4.14 |                                                      |  | 4.50                          |  | $ | 137,000 | 
|                                                          |  |           |  |                                                    |      |                                                      |  |                               |  |   |         | 
|Exercisable at
  September 30, 2006                       |  | 1,663,610 |  | $                                                  | 4.19 |                                                      |  | 4.32                          |  | $ | 121,000 | 

As of September 30, 2006, there was $321,000 of
unrecognized compensation costs related to unvested options which is expected
to be recognized over a weighted-average period of 5 years.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | Net Capital:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Siebert is subject to the Securities and Exchange
  Commissions Uniform Net Capital Rule (Rule 15c3-1), which requires the
  maintenance of minimum net capital.
  Siebert has elected to use the alternative method, permitted by the
  rule, which requires that Siebert maintain minimum net capital, as defined,
  equal to the greater of $250,000 or two percent of aggregate debit balances
  arising from customer transactions, as defined.  (The net capital rule of the New York Stock Exchange also
  provides that equity capital may not be withdrawn or cash dividends paid if
  resulting net capital would be less than five percent of aggregate
  debits.)  As of September 30, 2006,
  Siebert had net capital of approximately $27,862,000 as compared with net
  capital requirements of $250,000.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4. | Capital Transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On May 15, 2000, the board of directors of the
  Company authorized a stock buy back program of up to one million common
  shares. Shares will be purchased from time to time in the open market and in
  private transactions. Through September 30, 2006, 933,401 shares have been
  purchased at an average price of $4.48 per share including 16,967 shares at
  an average price of $2.71 per share during the nine months ended September 30,
  2006.                                                                                                                                                                                                                                                                                                                                                              

6

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | Intuit Lawsuit Update:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Siebert filed a lawsuit against Intuit Inc.
  (Intuit) in New York State Supreme Court on September 17, 2003 seeking not
  less than $11.1 million in compensatory damages and $33.3 million in punitive
  damages for claims relating to the Joint Brokerage Service (the JBS)
  conducted during the years ended December 31, 2003 and 2002 under the
  Strategic Alliance Agreement between Siebert and Intuit.  The Court denied Intuits motion to
  dismiss Sieberts causes of action for breach of fiduciary duty, breach of
  contractual obligations to pay shared expenses, promissory estoppel, and
  breach of the implied covenant of good faith and fair dealing.  The Court granted Intuits motion to
  dismiss Sieberts causes of action for breach of the express covenant of good
  faith and fair dealing, misrepresentation and/or fraud, and its request for
  punitive damages.  Intuit has
  counterclaimed against Siebert, seeking not less than $6.6 million.  Siebert and Intuit have appealed from certain
  portions of the Courts decision and Siebert has also moved for reargument of
  that decision regarding punitive damages.
  In November 2005, Intuits counsel was disqualified by the Court from
  representing Intuit in this action.
  The Courts Appellate Division reversed the order of disqualification,
  but, thereafter, granted Sieberts motion for leave to appeal to the Court of
  Appeals, New Yorks highest court. All proceedings in the action are stayed
  pending Sieberts appeal, which the Court of Appeals is scheduled to hear in
  February 2007.  The outcome of this
  matter cannot now be predicted.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6. | Siebert Brandford Shank & Co.,
  LLC:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Summarized financial data (presented in thousands)
  of Siebert, Brandford & Shank Co., LLC, (SBS) as of and for the nine
  months ended September 30, 2006 and 2005 is set forth below. Siebert holds a
  49% ownership interest in SBS, which serves as an underwriter for municipal
  bond offerings:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                                                                                                       |  |      |            |      |   |            | 
| | ----------------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- | 
| |                                                                                                       |  | 2006 |            | 2005 |  
| |                                                                                                       |  |      |            |      |  
| |                                                                                                       |  |      |            |      |   |            | 
| | Total assets
  including secured demand note of $1,200,000 in each period due from Siebert            |  | $    | 30,598,000 |      | $ | 21,870,000 | 
| | Total
  liabilities, including subordinated liabilities of $1,200,000 in each period
  due to Siebert |  |      | 20,915,000 |      |   | 14,745,000 | 
| | Total members
  capital                                                                              |  |      | 9,683,000  |      |   | 7,125,000  | 
| | Total revenues                                                                                        |  |      | 19,635,000 |      |   | 15,976,000 | 
| | Net income                                                                                            |  |      | 4,864,000  |      |   | 2,842,000  | 

Siebert charged SBS $180,000 for the nine months ended
September 30, 2006 for general and administrative services, which Siebert
believes approximates the cost of furnishing such services.

Income from SBS for the three and nine months ended
September 30, 2006 amounted to $1,266,000 and $2,383,000, respectively. Income
for the three and nine months ended September 30, 2005 amounted to $500,000 and
$1,392,000, respectively.

Sieberts share of undistributed earnings from SBS
amounted to $4,353,000 and $3,099,000 at September 30, 2006 and 2005,
respectively. Such amounts may not be immediately available for distribution to
Siebert for various reasons including the amount of SBSs available cash, the
provisions of the agreement between Siebert and the principals, and SBSs
continued compliance with its regulatory and net capital requirements.

|   |                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | SBS Financial Product Company, LLC:                                                                                                                                                                                           
|   |                                                                                                                                                                                                                               
|   | The Company entered into an Operating Agreement,
  effective as of April 19, 2005 (the Operating Agreement), with the two
  individual principals of SBS (the Principals) to form SBS Financial
  Products Company, LLC, a

7

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Delaware limited liability company (SBSFPC).
  Pursuant to the terms of the Operating Agreement, the Company and each of the
  Principals made an initial capital contribution of $400,000 in exchange for a
  33.33% initial interest in SBSFPC. SBSFPC engages in derivatives transactions
  related to the municipal underwriting business. The Operating Agreement
  provides that profit will be shared 66.66% by the Principals and 33.33% by
  the Company.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Summarized financial data of SBSFPC as of and for
  the nine months ended September 30, 2006, and as of and for the period April
  19, 2005 (inception) to September 30, 2005 is set forth below. The Company
  holds a 33.33% ownership interest in SBSFPC.                                                                                                                                                                                                        

| |                          |  |      |            |      |   |           | 
| | ------------------------ |  | ---- | ---------- | ---- | - | --------- | 
| |                          |  | 2006 |            | 2005 |  
| |                          |  |      |            |      |  
| |                          |  |      |            |      |   |           | 
| | Total assets             |  | $    | 44,793,000 |      | $ | 2,119,000 | 
| | Total
  liabilities      |  | $    | 39,646,000 |      | $ | 588,000   | 
| | Total members
  capital |  | $    | 5,147,000  |      | $ | 1,531,000 | 
| | Total revenues           |  | $    | 5,505,000  |      | $ | 844,000   | 
| | Net income               |  | $    | 3,521,000  |      | $ | 348,000   | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Income from SBSFPC for the three and nine months
  ended September 30, 2006 amounted to $206,000 and $1,173,000, respectively.
  Loss from SBSFPC for the three months ended September 30, 2005 amounted to
  $25,000 and income from SBSFPC for the nine months ended September 30, 2005
  amounted to $116,000. SBSFPC began operations in April 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Companys share of undistributed earnings from
  SBSFPC amounted to $1,316,000 and $111,000, at September 30, 2006 and 2005, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|8. | Commitments and Contingent
  Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Siebert terminated the
  fully disclosed clearing agreement (the Clearing Agreement) with Pershing
  LLC (formerly the Pershing division of Donaldson, Lufkin & Jenrette
  Securities Corporation) (Pershing) in 2003.  Based on consultation with counsel, Siebert believes that the
  $1,500,000 that it advanced to Pershing in January 2003 should have been
  returned and that Pershing may be liable for damages.  Pershing has expressed its belief that it
  is entitled to retain the advance and receive a minimum of $3 million for its
  unreimbursed costs, a termination fee of $500,000 and $5 million for lost
  revenues.  Siebert in 2004 decided not
  to commence proceedings against Pershing and charged off the $1,500,000
  advance to Pershing.  Siebert and
  Pershing in 2005 entered into a Limited Release Agreement under which Siebert
  received a release from the $3 million disputed claims for unreimbursed fees
  and costs. Pershing was released from any liability to Siebert based upon the
  disputed fees and costs, and Siebert paid a consideration to Pershing that
  had been previously accrued by Siebert. The outcome of the remaining
  unresolved claims cannot now be predicted, however, Siebert believes the
  Pershing claims are without merit and that the ultimate resolution of this
  matter will not have a material adverse effect on results of operations or
  financial position.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company is involved in various routine lawsuits
  of a nature deemed by the Company customary and incidental to its
  business.  In the opinion of
  management, the ultimate disposition of such actions will not have a material
  adverse effect on its financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|9. | Dividend:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On August 9, 2006, the Board of Directors declared a
  dividend of eight cents per share on common stock of the Company, which was
  paid on August 30, 2006 to shareholders of record at the close of business on
  August 21, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

8

---



| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Chief Executive Officer of the Company has
  waived the right to receive the dividend in excess of the aggregate amount
  paid to other shareholders.

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

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

Business
Environment

The
market was stronger in the third quarter of 2006 due to steady interest rates
and declining oil prices although there was a lack of retail customer interest
in investing in stocks. Competition in the brokerage industry remains intense
and consolidation continues.

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

Recent
Developments

On
August 9, 2006, the Board of Directors declared a dividend of eight cents per
share on common stock of the Company, which was paid on August 30, 2006 to
shareholders of record at the close of business on August 21, 2006.

The
Chief Executive Officer of the Company has waived the right to receive the
dividend in excess of the aggregate amount paid to other shareholders.

On
May 15, 2000, the board of directors of the Company authorized the repurchase
of up to 1,000,000 shares of the Companys common stock.  Shares will be purchased from time to time,
in the discretion of the Company, in the open market and in private
transactions.  Through September 30,
2006, 933,401 shares have been purchased at an average price of $4.48 per share
including 16,967 shares at an average price of $2.71 per share during the nine
months ended September 30, 2006.  The
Company intends to continue acquiring shares pursuant to its stock repurchase
program based upon the price of the stock and in accordance with applicable rules
and regulations.

Critical
Accounting Policies

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

9

---



Results
of Operations

The
Company believes that its core business is performing relatively well, given
the current difficult business environment for discount and online brokers. The
Company had net income for the three and nine months ended September 30, 2006
of $897,000 and $2,790,000, respectively.

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

Total
revenues for the three months ended September 30, 2006 were $7.7 million, a
decrease of $370,000 or 4.6% from the same period in 2005.

Commission
and fee income for the three months ended September 30, 2006 was $5.3 million,
a decrease of $1.2 million or 17.7% from the same period in 2005 due to a
decrease in retail customers trading volumes and commission per ticket as well
as a decrease in commissions generated by the commission recapture and
institutional trading operations for the same period in 2005.

Investment
banking revenues for the three months ended September 30, 2006 were $231,000, a
decrease of $513,000 or 69.0% from the same period in 2005 due to a significant
decrease in activity in the new issue equity market.

Income
from the Companys equity investment in Siebert, Brandford, Shank & Co.,
LLC, an entity in which the Company holds a 49% equity interest (SBS), for
the three months ended September 30, 2006 was $1.3 million compared to income
of $500,000, an increase of $766,000 or 153.2% from the same period in 2005.
This increase was due to an increase in syndicate profits. SBS serves as an
underwriter for municipal bond offerings. Income from the Companys equity
investment in SBS Financial Products Company, LLC, an entity in which the
Company holds a 33% equity interest (SBSFPC) for the three months ended
September 30, 2006, was $206,000 as compared to a loss of $25,000 from the same
period in 2005. This increase was due to an increase in the number and size of
the transactions and the mark to market of the positions. SBSFPC engages in
derivatives transactions related to the municipal underwriting business.

Trading
profits were $259,000 for the three months ended September 30, 2006, an
increase of $90,000 or 53.3% over the same period in 2005 due to an overall
increase in trading margins and the mark to market of the Companys investment.

Interest
and dividends for the three months ended September 30, 2006 were $444,000, an
increase of $201,000 or 82.7% from the same period in 2005 primarily due to
higher interest rates and higher cash balances.

Total
expenses for the three months ended September 30, 2006 were $6.2 million, a
decrease of $982,000 or 13.7% from the same period in 2005.

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

Clearing
and floor brokerage costs for the three months ended September 30, 2006 were
$1.1 million, a decrease of $247,000 or 18.0% from the same period in 2005
primarily due to a decrease in retail customers trading volumes and floor
brokerage costs relating to the decreased volume of institutional trades
executed at the New York Stock Exchange.

10

---



Professional
fees for the three months ended September 30, 2006, was $799,000, a decrease of
$624,000 or 43.9% from the same period in 2005 due to a decrease in consulting
fees relating to the commission recapture business and legal fees.

Advertising
and promotion expenses for the three months ended September 30, 2006 were
$206,000, a decrease of $8,000 or 3.7% from the same period in 2005 primarily
due to managements decision to spend less for advertising and promotion.

Communications
expense for the three months ended September 30, 2006, was $466,000, a decrease
of $36,000 or 7.2% from the same period in 2005 primarily due to actively
pursuing alternate vendors and utilizing new technologies and solutions offset
by an increase in quotes retrieved by the Companys retail customers.

Occupancy
costs for the three months ended September 30, 2006 were $296,000, an increase
of $28,000 or 10.4% from the same period in 2005. The increase is primarily due
to the increase in rents in the Boca Raton, Florida and Beverly Hills,
California branches.

Other
general and administrative expenses were $713,000, an increase of $149,000, or
17.3% from the same period in 2005 due to the decrease in depreciation and
amortization charges, placement fees, registration fees and exchange fees
offset by increases in travel and entertainment and postage.

For
the three months ended September 30, 2006 and 2005, the Company recorded a
provision for taxes of $650,000 and $393,000, respectively, due to the
Companys income before income tax of $1,547,000 and $935,000, respectively.

Nine Months Ended September 30, 2006 Compared to Nine Months
Ended September 30, 2005

Total
revenues for the nine months ended September 30, 2006 were $24.4 million, an
increase of $1.1 million or 4.7% from the same period in 2005.

Commission
and fee income for the nine months ended September 30, 2006 was $18.2 million,
a decrease of $650,000 or 3.4% from the same period in 2005 due to a decrease
in commissions generated by the commission recapture, institutional direct
access and institutional trading operations.

Investment
banking revenues for the nine months ended September 30, 2006 were $791,000, a
decrease of $935,000 or 54.2% from the same period in 2005 due to the Company
participating in fewer new issues in the equity capital markets.

Income from the Companys equity investment
in Siebert, Brandford, Shank & Co., LLC, an entity in which the Company holds a 49%
equity interest (SBS), for the nine months ended September 30, 2006 was $2.4 million compared to income of $1.4 million, an
increase of $991,000 or 71.2% from the same period in 2005. This increase was due to an increase in syndicate profits. SBS serves as
an underwriter for municipal bond offerings. Income from the Companys equity investment in SBS Financial Products Company, LLC, an
entity in which the Company holds 33.33% equity interest (SBSFPC) for the nine months ended September 30, 2006, was $1.2 million an
increase 1.1 million as a result of an increase in the number and size of the transactions and the mark to market of the positions.
SBSFPC engages in
derivatives transactions related to the municipal underwriting business.

Trading
profits were $612,000 for the nine months ended September 30, 2006, an increase
of $5,000 or 1.0% over the same period in 2005 due to an overall increase in
trading margins and volume.

Interest
and dividends for the nine months ended September 30, 2006 were $1.2 million,
an increase of $627,000 or 103.5% from the same period in 2005 primarily due to
higher interest rates and higher cash balances.

11

---



Total
expenses for the nine months ended September 30, 2006 were $19.6 million, a
decrease of $1.5 million or 6.9% from the same period in 2005.

Employee
compensation and benefit costs for the nine months ended September 30, 2006
were $7.8 million, an increase of $92,000 or 1.2% from the same period in 2005.
This increase was due to an increase in bonus accruals, health benefits and the
expensing of employee stock options offset by a decrease in compensation to
registered representatives and executives, and the decrease of the New York
Stock Exchange floor operation.

Clearing
and floor brokerage costs for the nine months ended September 30, 2006 were
$3.9 million, a decrease of $84,000 or 2.1% from the same period in 2005
primarily due to decrease in institutional trades executed at the New York
Stock Exchange.

Professional
fees for the nine months ended September 30, 2006, was $2.6 million, a decrease
of $982,000 or 27.7% from the same period in 2005 due to a decrease in
consulting fees relating to the commission recapture business, preparation for
Sarbanes-Oxley compliance and legal fees for Intuit, compliance and employee
related matters.

Advertising
and promotion expenses for the nine months ended September 30, 2006 were
$880,000, an increase of $126,000 or 16.7% from the same period in 2005
primarily due to the production and airing of television commercials in the
Florida region in the first quarter of 2006.

Communications
expense for the nine months ended September 30, 2006, was $1.3 million, a
decrease of $357,000 or 21.2% from the same period in 2005 due to primarily
actively pursuing alternative vendors and utilizing new technologies and
solutions.

Occupancy
costs for the nine months ended September 30, 2006 were $862,000, an increase
of $72,000 or 9.1% from the same period in 2005 due to an increase in operating
and utilities cost charged by the landlord in the Companys Jersey City, New
Jersey branch as well as our branches in the Florida region.

Other
general and administrative expenses were $2.2 million, a decrease of $314,000
or 12.6% from the same period in 2005 due to the decrease in depreciation and
amortization expenses, registration and exchange fees and costs relating to the
institutional direct access operations offset by increases in travel and
entertainment and office supplies.

For
the nine months ended September 30, 2006 and 2005, the Company recorded a
provision for taxes of $2.0 million and $953,000, respectively, due to the
Companys income before income tax of $4.8 million and $2.3 million,
respectively.

Liquidity
and Capital Resources

The
Companys assets are highly liquid, consisting generally of cash, money market
funds and commercial paper.  The
Companys total assets at September 30, 2006 were $44.7 million. As of that
date, $33.4 million, or 75%, of total assets were regarded by the Company as
highly liquid.

Siebert
is subject to the net capital requirements of the SEC, the NYSE and other
regulatory authorities.  At September
30, 2006, Sieberts regulatory net capital was $27.9 million, $27.6 million in
excess of its minimum capital requirement of $250,000.

Siebert
has entered into a Secured Demand Note Collateral Agreement with SBS under
which it is obligated to lend to SBS up to $1.2 million pursuant to a secured
promissory note on a subordinated basis.
Amounts pledged by Siebert under the facility are reflected on the
Companys balance sheet as cash equivalents  restricted.  SBS pays Siebert interest on this amount at
the rate of 8% per annum.  The facility
expires on August 31, 2007, at which time SBS is obligated to repay to Siebert
any amounts borrowed by SBS thereunder.

12

---



Item
3.  Quantitative and Qualitative
Disclosures About Market Risk

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

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

Item
4.  Controls and Procedures

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

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

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

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

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

Item 1A. Risk Factors

In addition to the other
information set forth in this report, you should carefully consider the factors
discussed in Part I, Item 1A. Risk Factors in the Companys Annual Report on
Form 10-K for the year ended December 31, 2005, which could materially affect
our business, financial position and results of operations. There are no
material changes from the risk factors set forth in Part I, Item 1A, Risk
Factors, of the Companys Annual Report on Form 10-K for the year ended
December 31, 2005.

13

---



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

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

|                 |  |                                        |        |                                  |  |                                                                               |   |                                                                             |  |  |         |  |  |        |  | 
|---------------- |  | -------------------------------------- | ------ | -------------------------------- |  | ----------------------------------------------------------------------------- | - | --------------------------------------------------------------------------- |  |  | ------- |  |  | ------ |  | 
|Period           |  | Total
  Number
  Of Shares
  Purchased |        | Average
  Price
  Paid Per Share |  | Total
  Number of
  Shares Purchased
  as Part of Publicly 
  Announced Plans |   | Maximum
  Number of Shares 
  That May Yet Be
  Purchased Under 
  The Plan | 
|                 |  |                                        |        |                                  |  |                                                                               |   |                                                                             | 
|July 2006        |  |                                        |       |                                  |  |                                                                               |   |                                                                            |  |  | 918,937 |  |  | 81,063 |  | 
|                 |  |                                        |        |                                  |  |                                                                               |   |                                                                             |  |  |         |  |  |        |  | 
|August 2006      |  |                                        | 5,214  |                                  |  |                                                                               | $ | 2.71                                                                        |  |  | 924,151 |  |  | 75,849 |  | 
|                 |  |                                        |        |                                  |  |                                                                               |   |                                                                             |  |  |         |  |  |        |  | 
|September
  2006 |  |                                        | 9,250  |                                  |  |                                                                               | $ | 2.78                                                                        |  |  | 933,401 |  |  | 66,599 |  | 
|                 |  |                                        |        |                                  |  |                                                                               |   |                                                                             |  |  |         |  |  |        |  | 
|                 |  |                                        |        |                                  |  |                                                                               |   |                                                                             |  |  |         |  |  |        |  | 
|Total            |  |                                        | 14,464 |                                  |  |                                                                               | $ | 2.75                                                                        |  |  | 933,401 |  |  | 66,599 |  | 

Item 3. Defaults Upon Senior
Securities

None

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

None

Item 5. Other Information

None

Item 6. Exhibits

| |                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1 Certification of Muriel F. Siebert pursuant to
  Exchange Act Rules 13a-14 and 15d-14, as adopted Pursuant to Section 302 of
  the Sarbanes-Oxley Act of 2002.  
| |                                                                                                                                                                      
| | 31.2 Certification of Joseph M. Ramos, Jr. pursuant to
  Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to Section 302 of
  the Sarbanes-Oxley Act of 2002.
| |                                                                                                                                                                      
| | 32.1 Certification of Muriel F. Siebert of Periodic
  Financial Report under Section 906 of the Sarbanes-Oxley Act of 2002.                                          
| |                                                                                                                                                                      
| | 32.2 Certification of Joseph M. Ramos, Jr. of Periodic
  Financial Report under Section 906 of the Sarbanes-Oxley Act of 2002.                                       

14

---



SIGNATURES

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

| |                             |                                                                                                     | 
| | --------------------------- | --------------------------------------------------------------------------------------------------- | 
| | SIEBERT FINANCIAL CORP.    
| |                            
| | By:                         | /s/ Muriel F. Siebert                                                                               | 
| |                             |                                                                                                     | 
| |                             | Muriel F. Siebert                                                                                  
| |                             | Chairwoman and President
  (principal executive officer)                                           
| |                             |                                                                                                     | 
| | Dated:  November
  14, 2006
| |                             |                                                                                                     | 
| | By:                         | /s/ Joseph M. Ramos, Jr.                                                                            | 
| |                             |                                                                                                     | 
| |                             | Joseph M. Ramos, Jr.                                                                                | 
| |                             | Executive Vice President and Chief Financial Officer
  (principal financial and accounting officer)
| |                             |                                                                                                    
| | Dated: November
  14, 2006 

15

---