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|UNITED STATES                                                                         
|SECURITIES AND EXCHANGE COMMISSION                                                    
|                                                                                      
|Washington, D.C. 20549                                                                
|                                                                                      
|                                                                                       |  | 
|                                                                                       |  | 
|Form 10-K                                                                             
|                                                                                      
|(Mark
 One)                                                                           
|                                                                                      
|x ANNUAL
 REPORT UNDER SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT OF 1934    
|                                                                                      
|For the fiscal year ended: December 31, 2009                                          
|                                                                                      
|o TRANSITION REPORT UNDER SECTION 13 OR
 15(d)
 OF THE SECURITIES EXCHANGE ACT OF 1934
|                                                                                      
|For
 the transition period from______________to________________                       
|                                                                                      
|Commission file number 0-5703                                                         
|                                                                                      
|                                                                                       |  | 
|                                                                                      
|Siebert Financial Corp.                                                               
|(Exact name of registrant as specified in its charter)                                
|                                                                                      
|                                                                                       |  | 

|                                         |  |                    
|---------------------------------------- |  | -------------------
|New York                                 |  | 11-1796714         
|(State or other jurisdiction of          |  | (I.R.S. Employer   
|incorporation or organization)           |  | Identification No.)
|                                         |  |                    
|885 Third Avenue, New York, New York     |  | 10022              
|(Address of principal executive offices) |  | (Zip Code)         
|                                        

|                              |  | 
|----------------------------- |  | 
|(212) 644-2400               
|Registrants telephone number
|                             
|                              |  | 

|                                                                     
|---------------------------------------------------------------------
|Securities
 registered pursuant to Section 12(b) of the Exchange Act:
|                                                                     
|Title
 of each class                                                 
|COMMON STOCK, PAR VALUE $.01 PER SHARE                               
|                                                                     
|Securities
 registered under Section 12(g) of the Exchange Act:      
|                                                                     
|NONE                                                                 
|(Title
 of class)                                                    

Indicate by checkmark if the
registrant is a well known seasoned issuer, as defined in Rule 405 of the
Securities Act. YES o NO x

Indicate by checkmark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act. YES o NO x

Indicate by checkmark 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 has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). YES o NO o

Indicate by checkmark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
 x

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

|                           |                     |                         |                             
|-------------------------- | ------------------- | ----------------------- | ----------------------------
|Large accelerated filer
 o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company
 x

Indicate by checkmark whether
the registrant is a shell company (as defined in Rule 12b-2). YES o NO x

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The
aggregate market value of the Common Stock held by non-affiliates of the
registrant (based upon the last sale price of the Common Stock reported on the
Nasdaq Stock Market as of the last business day of the registrants most
recently completed second fiscal quarter (June 30, 2009)), was $3,393,138.

The
number of shares of the Registrants outstanding Common Stock, as of March 12,
2010, was 22,184,105 shares.

Documents
Incorporated by Reference: Definitive Proxy Statement to be filed pursuant to
Regulation 14A of the Exchange Act on or before April 30,
2010 is incorporated by reference into Part III.

Special Note Regarding Forward-Looking Statements

Statements
in this Annual Report on Form 10-K, as well as oral statements that may be made
by the Company or by officers, directors or employees of the Company 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 historical
results or from any future expressed or implied by such forward looking
statements, including without limitation: changes in general economic and
market conditions; changes and prospects for changes in interest rates;
fluctuations in volume and prices of securities; demand for brokerage and
investment banking services; competition within and without the discount
brokerage business, including the offer of broader services; competition from
electronic discount brokerage firms offering greater discounts on commissions
than the Company; the prevalence of a flat fee environment; decline in
participation in corporate or municipal finance underwritings; limited trading
opportunities; the method of placing trades by the Companys customers;
computer and telephone system failures; the level of spending by the Company on
advertising and promotion; trading errors and the possibility of losses from
customer non-payment of amounts due; other increases in expenses and changes in
net capital or other regulatory requirements.

-2-

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PART I

Item 1.     BUSINESS

General

Siebert
Financial Corp. is a holding company that conducts its retail discount
brokerage and investment banking business through its wholly-owned subsidiary,
Muriel Siebert & Co., Inc., a Delaware corporation. Muriel F. Siebert, the
first woman member of the New York Stock Exchange, is our Chairwoman and
President and owns approximately 90% of our outstanding common stock, par value
$.01 per share (the Common Stock). For purposes of this Annual Report, the
terms Siebert Company, we, us and our refer to Siebert Financial
Corp. and its consolidated subsidiaries, unless the context otherwise requires.
          Our principal offices are located at 885 Third Avenue, New York, New York
10022, and our phone number is (212) 644-2400. Our Internet address is
www.siebertnet.com. Our SEC filings are available through our website at
www.siebertnet.com, where you are able to obtain copies of the Companys public
filings free of charge. Our Common Stock trades on the Nasdaq Global Market
under the symbol SIEB.

Business Overview

Sieberts
principal activity is providing Internet and traditional discount brokerage and
related services to retail investors and, through its wholly owned subsidiary,
Siebert Womans Financial Network, Inc (WFN), providing products, services
and information devoted to womens financial needs. Through its Capital Markets
division, Siebert also offers institutional clients equity execution services
on an agency basis, as well as equity and fixed income underwriting and
investment banking services. We believe that we are the largest Woman-Owned
Business Enterprise (WBE) in the capital markets business in the country. In
addition, Siebert, Brandford, Shank & Co., LLC (SBS), a company in which
Siebert holds a 49% ownership interest, is the largest Minority and Womens
Business Enterprise (MWBE) in the tax-exempt underwriting business in the
country.

The Retail Division

Discount
Brokerage and Related Services. Siebert became a discount broker on May 1, 1975. Siebert believes that
it has been in business and a member of The New York Stock Exchange, Inc. (the
NYSE) longer than any other discount broker. In 1998, Siebert began to offer
its customers access to their accounts through SiebertNet, its Internet
website. Sieberts focus in its discount brokerage business is to serve retail
clients seeking a wide selection of quality investment services, including
trading through a broker on the telephone, through a wireless device or via the
Internet, at commissions that are substantially lower than those of
full-commission firms. Siebert clears its securities transactions on a fully
disclosed basis through National Financial Services Corp. (NFS), a wholly
owned subsidiary of Fidelity Investments.

Siebert
serves investors who make their own investment decisions. Siebert seeks to
assist its customers in their investment decisions by offering a number of
value added services, including easy access to account information. Sieberts
representatives are available to assist customers with information via
toll-free 800 service Monday through Friday between 7:30 a.m. and 7:30 p.m.
Eastern Time. Through its SiebertNet, Mobile Broker, inter-active voice
recognition and Siebert MarketPhone services, 24-hour access is available to
customers.

Independent
Retail Execution Services. Siebert and our clearing agent monitor order flow in an effort to
ensure that we are getting the best possible trade executions for customers.
Siebert does not make markets in securities, nor does it take positions against
customer orders.

Sieberts
equity orders are routed by its clearing agent in a manner intended to afford
its customers the opportunity for price improvement on all orders. The firm
also offers customers execution services through various electronic
communication networks (ECNs) for an additional fee. These systems give
customers access to numerous ECNs before and after regular market hours.
Siebert believes that its over-the counter executions consistently afford its
customers the opportunity for price improvement.

-3-

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Customers
may also indicate online interest in buying or selling fixed income securities,
including municipal bonds, corporate bonds, mortgage-backed securities,
Government Sponsored Enterprises, Unit Investment Trusts or Certificates of
Deposit. These transactions are serviced by registered representatives.

Retail
Customer Service.
Siebert believes that superior customer service enhances its ability to compete
with larger discount brokerage firms and therefore provides retail customers,
at no additional charge, with personal service via toll-free access to
dedicated customer support personnel for all of its products and services.
Customer service personnel are located in each of Sieberts branch offices.
Siebert has retail offices in New York, New York; Jersey City, New Jersey; Boca
Raton, Surfside, West Palm Beach and Naples, Florida; and Beverly Hills,
California. Siebert uses a proprietary Customer Relationship Management System
that enables representatives, no matter where located, to view a customers
service requests and the response thereto. Sieberts telephone system permits
the automatic routing of calls to the next available agent having the
appropriate skill set.

Retirement
Accounts. Siebert
offers customers a variety of self-directed retirement accounts for which it
acts as agent on all transactions. Custodial services are provided through an
affiliate of NFS, the firms clearing agent, which also serves as trustee for
such accounts. Each IRA, SEP IRA, ROTH IRA, 401(k) and KEOGH account can be
invested in mutual funds, stocks, bonds and other investments in a consolidated
account.

Customer
Financing. Customers
margin accounts are carried through Sieberts clearing agent which lends
customers a portion of the market value of certain securities held in the
customers account. Margin loans are collateralized by these securities.
Customers also may sell securities short in a margin account, subject to
minimum equity and applicable margin requirements, and the availability of such
securities to be borrowed. In permitting customers to engage in margin, short sale
or any transaction, Siebert assumes the risk of its customers failure to meet
their obligations in the event of adverse changes in the market value of the
securities positions. Both Siebert and its clearing agents reserve the right to
set margin requirements higher than those established by the Federal Reserve
Board.

Siebert
has established policies with respect to maximum purchase commitments for new
customers or customers with inadequate collateral to support a requested
purchase. Managers have some flexibility in the allowance of certain
transactions. When transactions occur outside normal guidelines, Siebert
monitors accounts closely until their payment obligations are completed; if the
customer does not meet the commitment, Siebert takes steps to close out the
position and minimize any loss. Siebert has not had significant credit losses
in the last five years.

Information
and Communications Systems. Siebert relies heavily on the data technology platform provided by its
clearing agent, NFS LLC (NFS). This platform offers an interface to NFS main
frame computing system where all customer account records are kept and is
accessible by Sieberts network. Sieberts systems also utilize browser based
access and other types of data communications. Sieberts representatives use
NFS systems, by way of Sieberts technology platform, to perform daily
operational functions which include trade entry, trade reporting, clearing
related activities, risk management and account maintenance.

Sieberts data technology
platform offers services used in direct relation to customer related activities
as well as support for corporate use. Some of these services include email and
messaging, market data systems and third party trading systems, business productivity
tools and customer relationship management systems. Sieberts branch offices
are connected to the main offices in New York, New York and Jersey City, New
Jersey via a virtual private network. Sieberts data network is designed with
redundancy in case a significant business disruption occurs.

Sieberts voice network
offers a call center feature that can route and queue calls for certain
departments within the organization. Additionally, the systems call manager
offers reporting and tracking features which enable staff to determine how
calls are being managed, such as time on hold, call duration and total calls by
agent.

To ensure reliability and to
conform to regulatory requirements related to business continuity, Siebert
maintains backup systems and backup data. However, in the event of a wide
spread disruption, such as a massive natural disaster, Sieberts ability to
satisfy the obligations to customers and other securities firms could be
significantly hampered or completely disrupted. For more information regarding
Sieberts Business Continuity Plan, please visit our website at
www.siebertnet.com or write to us at Muriel Siebert & Co., Inc., Compliance
Department, 885 Third Avenue, Suite 1720, New York, NY 10022.

Our new website has the
following design, navigation, and functionality features such as:

| |   |                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | § | Informative trading
 screens: Customers can stay in touch while trading, double-check balances,
 positions and order status, see real time quotes, intraday and annual charts
 and news headlines  automatically  as they place orders.
| |   |                                                                                                                                                                                                                                          
| | § | Multiple orders: Customers
 can place as many as 10 orders at one time.                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                          
| | § | Tax-lot trading: Our online
 equity order entry screen allows customers to specify tax lots which display
 with cost basis and current gain/loss on a real-time Positions page.                                                          
| |   |                                                                                                                                                                                                                                          
| | § | Trailing stop orders:
 Customers can enter an order that trails the market as a percentage of share
 price or with a flat dollar value and the system will execute their
 instructions automatically.                                    

-4-

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| |   |                                                                                                                                                                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | § | Contingent orders:
 Customers can place One-Triggers-Two Bracket and One-Cancels-Other Bracket
 orders.                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                            
| | § | Options Wizard and Strategy
 Builder: Customers can review single and complex options combinations and
 components of each along with profit/risk potential and impact of time. The
 Strategy Builder presents real-time debit/credit amounts, potential maximum
 gain/loss and potential breakeven points by strike price.
| |   |                                                                                                                                                                                                                                                                                                                            
| | § | An easy-to-install desktop
 security program that may be installed to help protect against certain types
 of online fraud such as keylogging and phishing.                                                                                                                                                             

A majority of the original
site clients have registered to use the new site and feedback is generally
positive.

The Capital Markets Division

Sieberts
Capital Markets Group (SCM) division serves as a co-manager, underwriting
syndicate member, or selling group member on a wide spectrum of securities
offerings for corporations and Federal agencies. The principal activities of
the Capital Markets Division are investment banking and institutional equity
execution services. SCM provides high-quality brokerage service to both
institutional investors and issuers of equity and fixed-income securities.

Siebert, Brandford Shank
& Co., LLC

Muriel Siebert & Co. Inc. (Siebert) owns 49% of Siebert Brandford
Shank & Co., LLC (SBS), the remaining 51% is owned by Napoleon
Brandford III and Suzanne F. Shank. SBS has been serving the public sector and
growing the firm since 1996. SBS provides municipal underwriting and financial
advisory services to state and local governments across the nation for the
funding of education, housing, health services, transportation, utilities,
capital facilities, redevelopment and general infrastructure projects, serving
important issuers across the nation. SBS has offices across the nation.

Effective April 19, 2005, Siebert Financial Corp. (SFC) entered into
an Operating Agreement with Suzanne Shank and Napoleon Brandford III, the two
individual principals (the Principals) of SBS Financial
Products Company LLC, a Delaware limited liability company (SBSFPC).
Pursuant to the terms of the Operating Agreement, SFC and each of the Principals
made an initial capital contribution of 33.33% initial interest in SBSFPC.
SBSFPC engages in derivatives transactions related to the municipal underwriting
business.

Certain
risks are involved in the underwriting of securities. Underwriting syndicates
agree to purchase securities at a discount from the initial public offering
price. An underwriter is exposed to losses on the securities that it has
committed to purchase if the securities must be sold below the cost to the
syndicate. In the last several years, investment banking firms have
increasingly underwritten corporate and municipal offerings with fewer
syndicate participants or, in some cases, without an underwriting syndicate. In
these cases, the underwriter assumes a larger part or all of the risk of an
underwriting transaction. Under Federal securities laws, other laws and court
decisions, an underwriter is exposed to substantial potential liability for
material misstatements or omissions of fact in the prospectus used to describe
the securities being offered.

Advertising, Marketing and Promotion

Siebert
develops and maintains its retail customer base through printed advertising in
financial publications, broadcast commercials over national and local cable TV
channels, as well as promotional efforts and public appearances by Ms. Siebert.
Additionally, a significant number of the firms new accounts are developed
directly from referrals by satisfied customers.

Competition

Siebert
encounters significant competition from full-commission, online and discount
brokerage firms, as well as from financial institutions, mutual fund sponsors
and other organizations, many of which are significantly larger and better
capitalized than Siebert. Although there has been consolidation in the industry
in both the online and traditional brokerage business during recent years,
Siebert believes that additional competitors such as banks, insurance
companies, providers of online financial and information services and others
will continue to be attracted to the online brokerage industry. Many of these
competitors are larger, more diversified, have greater capital resources, and
offer a wider range of services and financial products than Siebert. Some such
firms are offering their services over the Internet and have devoted more
resources to and have more elaborate websites than Siebert. Siebert competes
with a wide variety of vendors of financial services for the same customers.
Siebert believes that its main competitive advantages are high quality customer
service, responsiveness, cost and products offered, the breadth of product line
and excellent executions.

-5-

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Regulation

The
securities industry in the United States is subject to extensive regulation
under both Federal and state laws. The Securities and Exchange Commission
(SEC) is the Federal agency charged with administration of the Federal
securities laws. Siebert is registered as a broker-dealer with the SEC, and is
a member of the New York Stock Exchange (NYSE) and the Financial Industry
Regulatory Authority (FINRA). Much of the regulation of broker-dealers has
been delegated to self-regulatory organizations, principally FINRA and national
securities exchanges such as the NYSE, which is Sieberts primary regulator
with respect to financial and operational compliance. These self-regulatory
organizations adopt rules (subject to approval by the SEC) governing the
industry and conduct periodic examinations of broker-dealers. Securities firms
are also subject to regulation by state securities authorities in the states in
which they do business. Siebert is registered as a broker-dealer in 50 states,
the District of Columbia and Puerto Rico.

The
principal purpose of regulation and discipline of broker-dealers is the
protection of customers and the securities markets, rather than protection of
creditors and stockholders of broker-dealers. The regulations to which
broker-dealers are subject cover all aspects of the securities business,
including training of personnel, sales methods, trading practices among
broker-dealers, uses and safekeeping of customers funds and securities,
capital structure of securities firms, record keeping, fee arrangements,
disclosure to clients, and the conduct of directors, officers and employees.
Additional legislation, changes in rules promulgated by the SEC and by
self-regulatory organizations or changes in the interpretation or enforcement
of existing laws and rules may directly affect the method of operation and
profitability of broker-dealers and investment advisers. The SEC,
self-regulatory organizations and state securities authorities may conduct
administrative proceedings which can result in censure, fine, cease and desist
orders or suspension or expulsion of a broker-dealer or an investment adviser,
its officers or its employees.

As
a registered broker-dealer and FINRA member organization, Siebert is required
by Federal law to belong to the Securities Investor Protection Corporation
(SIPC) which provides, in the event of the liquidation of a broker-dealer,
protection for securities held in customer accounts held by the firm of up to
$500,000 per customer, subject to a limitation of $100,000 on claims for cash
balances. The SIPC is funded through assessments on registered broker-dealers.
In addition, Siebert, through its clearing agent, has purchased from private
insurers additional account protection in the event of liquidation up to the
net asset value, as defined, of each account. Stocks, bonds, mutual funds and
money market funds are included at net asset value for purposes of SIPC
protection and the additional protection. Neither SIPC protection nor the
additional protection insures against fluctuations in the market value of
securities.

Siebert
is also authorized by the Municipal Securities Rulemaking Board to effect
transactions in municipal securities on behalf of its customers and has obtained
certain additional registrations with the SEC and state regulatory agencies
necessary to permit it to engage in certain other activities incidental to its
brokerage business.

Margin
lending arranged by Siebert is subject to the margin rules of the Board of
Governors of the Federal Reserve System and the NYSE. Under such rules,
broker-dealers are limited in the amount they may lend in connection with
certain purchases and short sales of securities and are also required to impose
certain maintenance requirements on the amount of securities and cash held in
margin accounts. In addition, those rules and rules of the Chicago Board
Options Exchange govern the amount of margin customers must provide and
maintain in writing uncovered options.

Net Capital Requirements

As
a registered broker-dealer, Siebert is subject to the SECs Uniform Net Capital
Rule (Rule 15c3-1) (the Net Capital Rule), which has also been adopted by the
NYSE. The Net Capital Rule specifies minimum net capital requirements for all
registered broker-dealers and is designed to measure financial integrity and
liquidity. Failure to maintain the required regulatory net capital may subject
a firm to suspension or expulsion by the NYSE and FINRA, certain punitive
actions by the SEC and other regulatory bodies and, ultimately, may require a
firms liquidation.

Regulatory
net capital is defined as net worth (assets minus liabilities), plus qualifying
subordinated borrowings, less certain deductions that result from excluding
assets that are not readily convertible into cash and from conservatively
valuing certain other assets. These deductions include charges that discount
the value of security positions held by Siebert to reflect the possibility of
adverse changes in market value prior to disposition.

The Net Capital Rule
requires notice of equity capital withdrawals to be provided to the SEC prior
to and subsequent to withdrawals exceeding certain sizes. The
Net Capital Rule also allows the SEC, under limited circumstances, to restrict
a broker-dealer from withdrawing equity capital for up to 20 business days. The
Net Capital Rule of the NYSE also provides that equity capital may not be drawn
or cash dividends paid if resulting net capital would be less than 5 percent of
aggregate debits.

-6-

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Under
applicable regulations, Siebert is required to maintain regulatory net capital
of at least $250,000. At December 31, 2009, and 2008, Siebert had net capital
of $21.1 million and $25.6 million, respectively. Siebert claims exemption from
the reserve requirement under Section 15c3-3(k)(2)(ii).

Employees

As
of March 19, 2010, we had approximately 77 full-time employees, six of whom
were corporate officers. None of our employees is represented by a union, and
we believe that relations with our employees are good.

Item 1A.     RISK FACTORS

Securities market volatility and other
securities industry risk could adversely affect our business

Most
of our revenues are derived from our securities brokerage business. Like other
businesses operating in the securities industry, our business is directly
affected by volatile trading markets, fluctuations in the volume of market
activity, economic and political conditions, upward and downward trends in business
and finance at large, legislation and regulation affecting the national and
international business and financial communities, currency values, inflation,
market conditions, the availability and cost of short-term or long-term funding
and capital, the credit capacity or perceived credit worthiness of the
securities industry in the marketplace and the level and volatility of interest
rates. Continuation of recent turmoil in the financial markets, continued
weakness in general economic conditions, or other risks associated with our
business and the securities industry in general could reduce trading volumes
and consequently may have a material adverse effect upon our commission or fee
income. We also face risks relating to trading losses, losses resulting from
the ownership or underwriting of securities, counterparty failure to meet
commitments, customer fraud, employee fraud, issuer fraud, errors and
misconduct, failures in connection with the processing of securities
transactions and litigation. A reduction in our revenues or a loss resulting
from our underwriting or ownership of securities or sales or trading of
securities could have a material adverse effect on our business, results of
operations and financial condition. In addition, as a result of these risks,
our revenues and operating results may be subject to significant fluctuations
from quarter to quarter and from year to year.

Lower price levels in the securities
markets may reduce our profitability.

Lower
price levels of securities may result in (i) reduced volumes of securities,
options and futures transactions, with a consequent reduction in our commission
revenues, and (ii) losses from declines in the market value of securities we
held in investment and underwriting positions. In periods of low volume, our
levels of profitability are further adversely affected because certain of our
expenses remain relatively fixed. Sudden sharp declines in market values of
securities and the failure of issuers and counterparties to perform their obligations
can result in illiquid markets which, in turn, may result in our having
difficulty selling securities. Such negative market conditions, if prolonged,
may also lower our revenues from investment banking and other activities. A
reduction in our revenues from investment banking or other activities could
have a material adverse affect on our business, results of operations and
financial condition.

There is intense competition in the
brokerage industry.

Siebert
encounters significant competition from full-commission, online and other
discount brokerage firms, as well as from financial institutions, mutual fund
sponsors and other organizations many of which are significantly larger and
better capitalized than Siebert. SBS also encounters significant competition
from firms engaged in the municipal finance business. Over the past several
years, price wars and lower commission rates in the discount brokerage business
in general have strengthened our competitors. Siebert believes that such changes
in the industry will continue to strengthen existing competitors and attract
additional competitors such as banks, insurance companies, providers of online
financial and information services, and others. Many of these competitors are
larger, more diversified, have greater capital resources, and offer a wider
range of services and financial products than Siebert. Siebert competes with a
wide variety of vendors of financial services for the same customers. Siebert
may not be able to compete effectively with current or future competitors.

-7-

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Some
competitors in the discount brokerage business offer services which we do not,
including financial advice and investment management. In addition, some
competitors have continued to offer lower flat rate execution fees that are
difficult for any conventional discount firm to meet. Industry-wide changes in
trading practices are expected to cause continuing pressure on fees earned by
discount brokers for the sale of order flow. Many of the flat fee brokers impose
charges for services such as mailing, transfers and handling exchanges which
Siebert does not and also direct their execution to captive market makers.
Continued or increased competition from ultra low cost, flat fee brokers and
broader service offerings from other discount brokers could limit our growth or
lead to a decline in Sieberts customer base which would adversely affect our
business, results of operations and financial condition.

We are subject to extensive government
regulation.

Our business
is subject to extensive regulation in the United States, at both the Federal
and state level. We are also subject to regulation by selfregulatory
organizations and other regulatory bodies in the Untied States, such as the
SEC, the NYSE, FINRA and the Municipal Securities Rulemaking Board (the
MSRB). We are registered as a broker-dealer in 50 states, the District of
Columbia and Puerto Rico. The regulations to which we are subject as a
broker-dealer cover all aspects of the securities business including: training
of personnel, sales methods, trading practices, uses and safe keeping of
customers funds and securities, capital structure, record keeping, fee
arrangements, disclosure and the conduct of directors, officers and employees.
Failure to comply with any of these laws, rules or regulations, which may be
subject to the uncertainties of interpretation, could result in civil
penalties, fines, suspension or expulsion and have a material adverse effect on
our business, results of operations and financial condition.

The
laws, rules and regulations, as well as governmental policies and accounting
principles, governing our business and the financial services and banking
industries generally have changed significantly over recent years and are expected
to continue to do so. We cannot predict which changes in laws, rules,
regulations, governmental policies or accounting principles will be adopted.
Any changes in the laws, rules, regulations, governmental policies or
accounting principles relating to our business could materially and adversely
affect our business, results of operations and financial condition.

-8-

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We are subject to
net capital requirements.

The
SEC, FINRA, and various other securities and commodities exchanges and other
regulatory bodies in the United States have rules with respect to net capital
requirements which affect us. These rules have the effect of requiring that at
least a substantial portion of a broker-dealers assets be kept in cash or
highly liquid investments. Our compliance with the net capital requirements
could limit operations that require intensive use of capital, such as
underwriting or trading activities. These rules could also restrict our ability
to withdraw our capital, even in circumstances where we have more than the
minimum amount of required capital, which, in turn, could limit our ability to
implement growth strategies. In addition, a change in such rules, or the
imposition of new rules, affecting the scope, coverage, calculation or amount
to such net capital requirements, or a significant operating loss or any
unusually large charge against net capital, could have similar adverse effects.

Our customers may
fail to pay us.

A
principal credit risk to which we are exposed on a regular basis is that our
customers may fail to pay for their purchases or fail to maintain the minimum
required collateral for amounts borrowed against securities positions
maintained by them. We cannot assure you that the policies and procedures we
have established will be adequate to prevent a significant credit loss.

We face risks
relating to our investment banking activities.

Certain
risks are involved in the underwriting of securities. Investment banking and
underwriting syndicates agree to purchase securities at a discount from the
public offering price. If the securities must be sold below the syndicate cost,
an underwriter is exposed to losses on the securities that it has committed to
purchase. In the last several years, investment banking firms increasingly have
underwritten corporate and municipal offerings with fewer syndicate
participants or, in some cases, without an underwriting syndicate. In these
cases, the underwriter assumes a larger part or all of the risk of an
underwriting transaction.

Under
Federal securities laws, other laws and court decisions, an underwriter is
exposed to substantial potential liability for material misstatements or
omissions of fact in the prospectus used to describe the securities being
offered. While municipal securities are exempt from the registration
requirements of the Securities Act, underwriters of municipal securities are
exposed to substantial potential liability for material misstatements or
omissions of fact in the offering documents prepared for these offerings.

An increase in
volume on our systems or other events could cause them to malfunction.

During
2009, we received and processed up to 69% of our trade orders electronically.
This method of trading is heavily dependent on the integrity of the electronic
systems supporting it. While we have never experienced a significant failure of
our trading systems, heavy stress placed on our systems during peak trading
times could cause our systems to operate at unacceptably low speeds or fail
altogether. Any significant degradation or failure of our systems or the
systems of third parties involved in the trading process (e.g., online and
Internet service providers, record keeping and data processing functions
performed by third parties, and third party software), even for a short time,
could cause customers to suffer delays in trading. These delays could cause substantial
losses for customers and could subject us to claims from these customers for
losses. There can be no assurance that our network structure will operate
appropriately in the event of a subsystem, component or software failure. In
addition, we cannot assure you that we will be able to prevent an extended
systems failure in the event of a power or telecommunications failure, an
earthquake, terrorist attack, fire or any act of God. Any systems failure that
causes interruptions in our operations could have a material adverse effect on
our business, financial condition and operating results.

-9-

---



We rely on
information processing and communications systems to process and record our
transactions.

Our
operations rely heavily on information processing and communications systems.
Our system for processing securities transactions is highly automated. Failure
of our information processing or communications systems for a significant
period of time could limit our ability to process a large volume of
transactions accurately and rapidly. This could cause us to be unable to
satisfy our obligations to customers and other securities firms, and could
result in regulatory violations. External events, such as an earthquake,
terrorist attack or power failure, loss of external information feeds, such as
security price information, as well as internal malfunctions such as those that
could occur during the implementation of system modifications, could render
part or all of these systems inoperative.

We may not be able
to keep up pace with continuing changes in technology.

Our
market is characterized by rapidly changing technology. To be successful, we
must adapt to this rapidly changing environment by continually improving the
performance, features and reliability of our services. We could incur
substantial costs if we need to modify our services or infrastructure or adapt
our technology to respond to these changes. A delay or failure to address
technological advances and developments or an increase in costs resulting from
these changes could have a material and adverse effect on our business,
financial condition and results of operations.

We depend on our
ability to attract and retain key personnel.

Our
continued success is principally dependent on our founder, Muriel F. Siebert,
Chairwoman, Chief Executive Officer and President and our senior management. In
addition, the continued success of SBS may be dependent on the services of
Napoleon Brandford III and Suzanne Shank. The loss of the services of any of
these individuals could significantly harm our business, financial condition
and operating results.

Our principal
shareholder may control many key decisions.

Ms.
Muriel F. Siebert currently owns approximately 90% of our outstanding common
stock. Ms. Siebert will have the power to elect the entire Board of Directors
and, except as otherwise provided by law or our Certificate of Incorporation or
by-laws, to approve any action requiring shareholder approval without a
shareholders meeting.

There may be no
public market for our common stock.

Only
approximately 2,200,000 shares, or approximately 10% of our shares outstanding,
are currently held by the public. Although our common stock is traded in The
Nasdaq Global Market, there can be no assurance that an active public market
will continue.

|                                       | 
|-------------------------------------- | 
|Item 1B.     UNRESOLVED STAFF COMMENTS

Not
applicable.

-10-

---



|        |           
|------- | ----------
|Item 2. | PROPERTIES

Siebert
currently maintains seven retail discount brokerage offices. Customers can
visit the offices to obtain market information, place orders, open accounts,
deliver and receive checks and securities, and obtain related customer services
in person. Nevertheless, most of Sieberts activities are conducted on the
Internet or by telephone and mail.

Siebert
operates its business out of the following seven leased offices:

|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|------------------------------------------------------------- |  | ---------------------------------------- | ----- | ---------------------------------- |  | -------------- |  |  | ---- | 
|Location                                                      |  | Approximate
 Office Area in
 Square Feet |       | Expiration Date
 of
 Current Lease |  | Renewal
 Terms | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|Corporate
 Headquarters, Retail and Investment Banking Office |  |                                          |       |                                    |  |                |  |  |      | 
|885 Third
 Ave.                                               |  |                                          |       |                                    |  |                |  |  |      | 
|New York, NY
 10022                                           |  |                                          | 7,828 |                                    |  | 1/14/11        |  |  | None | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|Institutional
 Trading Office                                 |  |                                          |       |                                    |  |                |  |  |      | 
|225 Franklin St.                                              |  |                                          |       |                                    |  |                |  |  |      | 
|Boston, MA 02110                                              |  |                                          | 100   |                                    |  | 9/30/10        |  |  | None | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|Retail
 Offices                                               |  |                                          |       |                                    |  |                |  |  |      | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|9701
 Wilshire Boulevard, Suite 1111                          |  |                                          |       |                                    |  |                |  |  |      | 
|Beverly
 Hills, CA 90212                                      |  |                                          | 1,200 |                                    |  | 10/31/10       |  |  | None | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|4400 North
 Federal Highway                                   |  |                                          |       |                                    |  | Month to       |  |  |      | 
|Boca Raton,
 FL 33431                                         |  |                                          | 2,438 |                                    |  | Month          |  |  | None | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|111 Pavonia
 Avenue(1)                                        |  |                                          |       |                                    |  |                |  |  |      | 
|Jersey City,
 NJ 07310                                        |  |                                          | 7,768 |                                    |  | 6/30/12        |  |  | None | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|400 Fifth
 Avenue South, Suite 100                            |  |                                          |       |                                    |  |                |  |  |      | 
|Naples, FL
 34102                                             |  |                                          | 1,008 |                                    |  | 4/30/11        |  |  | None | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|1217 South
 Flager Drive, 3rdFloor                            |  |                                          |       |                                    |  |                |  |  |      | 
|Floor West
 Palm Beach, FL 33401                              |  |                                          | 3,000 |                                    |  | 9/30/12        |  |  | None | 
|                                                              |  |                                          |       |                                    |  |                |  |  |      | 
|9569 Harding
 Avenue                                          |  |                                          |       |                                    |  |                |  |  |      | 
|Surfside, FL
 33154                                           |  |                                          | 1,150 |                                    |  | 8/30/10        |  |  | None | 

|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(1) | Certain of
 our administrative and back office functions are performed at this location.

We
believe that our properties are in good condition and are suitable for our
operations.

|        |                  
|------- | -----------------
|Item 3. | LEGAL PROCEEDINGS

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

Siebert
terminated a clearing agreement with Pershing LLC (Pershing) in 2003. Based
on consultation with counsel, Siebert believes that $1,500,000 that it advanced
to Pershing in January 2003 should have been returned. Pershing expressed its
belief that it was 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 received a release for the $3 million related to
disputed claims for unreimbursed fees and costs. In 2004, Siebert decided not
to commence proceedings against Pershing and charged off the $1,500,000 advance
to Pershing. The statute of limitations with respect to any contract claims by
either party expired in July 2009.

|        |                     
|------- | --------------------
|Item 3. | REMOVED AND RESERVED

-11-

---



PART II

|        |                                                                                                              
|------- | -------------------------------------------------------------------------------------------------------------
|Item 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
 AND ISSUER PURCHASES OF EQUITY SECURITIES

Our
common stock trades on the Nasdaq Stock Market under the symbol SIEB. The
high and low sales prices of our common stock reported by Nasdaq during the
following calendar quarters were:

|                                  |  |      |      |     |   |      | 
|--------------------------------- |  | ---- | ---- | --- | - | ---- | 
|                                  |  | High |      | Low |  
|                                  |  |      |      |     |  
|First
 Quarter - 2008             |  | $    | 4.00 |     | $ | 2.96 | 
|                                  |  |      |      |     |   |      | 
|Second
 Quarter - 2008            |  | $    | 3.73 |     | $ | 2.90 | 
|                                  |  |      |      |     |   |      | 
|Third
 Quarter - 2008             |  | $    | 3.42 |     | $ | 3.00 | 
|                                  |  |      |      |     |   |      | 
|Fourth
 Quarter - 2008            |  | $    | 3.30 |     | $ | 1.00 | 
|                                  |  |      |      |     |   |      | 
|First
 Quarter  2009             |  | $    | 2.00 |     | $ | 1.27 | 
|                                  |  |      |      |     |   |      | 
|Second
 Quarter  2009            |  | $    | 2.52 |     | $ | 1.30 | 
|                                  |  |      |      |     |   |      | 
|Third
 Quarter  2009             |  | $    | 2.92 |     | $ | 1.63 | 
|                                  |  |      |      |     |   |      | 
|Fourth
 Quarter  2009            |  | $    | 2.79 |     | $ | 2.24 | 
|                                  |  |      |      |     |   |      | 
|January 1,
 2010 - March 12, 2010 |  | $    | 2.49 |     | $ | 2.25 | 

On
March 12, 2010, the closing price of our common stock on the Nasdaq Global Market
was $2.33 per share. There were 130 holders of record of our common stock and
more than 1,500 beneficial owners of our common stock on March 13, 2010.

Dividend Policy

Our
Board of Directors periodically considers whether to declare dividends. In
considering whether to pay such dividends, our Board of Directors will review
our earnings capital requirements, economic forecasts and such other factors as
are deemed relevant. Some portion of our earnings will be retained to provide
capital for the operation and expansion of our business.

On
June 9, 2008, the Board of Directors declared a dividend of ten cents per share
on the common stock of the Company, which was paid on June 30, 2008 to
shareholders of record at the close of business on June 23, 2008. The total
amount paid on this dividend declaration was $467,000. Ms. Muriel F. Siebert,
the Chief Executive Officer of the Company waived the right to receive the
dividend in excess of the aggregate amount paid to other shareholders. Other
shareholders were paid dividends of $234,000.

-12-

---



Issuer Purchase Of Equity Securities

On
May 15, 2000, our Board of Directors authorized a buy back of up to one million
shares of our common stock. We completed this program in 2008.

On
January 23, 2008, our Board of Directors authorized the repurchase of up to
300,000 shares of our common stock. We will purchase shares from time to time,
in our discretion, in the open market and in private transactions. We purchased
4,415 shares at an average price of $2.37 in the fourth quarter of 2009.

A summary of
our repurchase activity for the three months ended December 31, 2009 is as
follows:

|               |  |                                     |       |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|-------------- |  | ----------------------------------- | ----- | ------------------------------ | - | ----------------------------------------------------------------------------- |  | ---------------------------------------------------------------------- | ------ |  |  | ------- | 
|Period         |  | Total
 Number
 Of Shares
 Purchased |       | Average Price
 Paid Per
 Share |   | Cumulative Number
 of
 Shares Purchased
 as Part of Publicly
 Announced Plans |  | Maximum
 Number of
 Shares
 That May Yet Be
 Purchased Under
 The Plan |       
|               |  |                                     |       |                                |   |                                                                               |  |                                                                        |       
|October 2009   |  |                                     | 0     |                                |   |                                                                               |  |                                                                        | 24,523 |  |  | 275,477 | 
|               |  |                                     |       |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|November
 2009 |  |                                     | 494   |                                | $ | 2.34                                                                          |  |                                                                        | 25,017 |  |  | 274,983 | 
|               |  |                                     |       |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|December
 2009 |  |                                     | 3,921 |                                | $ | 2.37                                                                          |  |                                                                        | 28,938 |  |  | 271,062 | 
|               |  |                                     |       |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|               |  |                                     |       |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|Total          |  |                                     | 4,415 |                                | $ | 2.37                                                                          |  |                                                                        | 28,938 |  |  | 271,062 | 

Equity Compensation Plan Information

The following
table sets forth information as of December 31, 2008 with respect to our equity
compensation plans.

|                                                               |  |                                                                                                |           |                                                                                    |   |                                                                                                                                           |  |  |           | 
|-------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------- | --------- | ---------------------------------------------------------------------------------- | - | ----------------------------------------------------------------------------------------------------------------------------------------- |  |  | --------- | 
|Plan Category                                                  |  | Number of Securities to be
 issued upon exercise of
 outstanding options,
 warrants and rights |           | Weighted-
 average
 exercise price of
 outstanding
 options,
 warrants and
 rights |   | Number of Securities
 remaining available for
 issuance under equity
 compensation plans
 (excluding securities
 reflected in column (a)) | 
|                                                               |  |                                                                                                |           |                                                                                    |   |                                                                                                                                           | 
|                                                               |  | (a)                                                                                            |           | (b)                                                                                |   | (c)                                                                                                                                       | 
|Equity compensation plans approved by
 security holders(1)     |  |                                                                                                | 1,767,200 |                                                                                    | $ | 4.07                                                                                                                                      |  |  | 1,700,000 | 
|                                                               |  |                                                                                                |           |                                                                                    |   |                                                                                                                                           |  |  |           | 
|Equity compensation plans not approved by
 security holders(2) |  |                                                                                                | 41,400    |                                                                                    |   |                                                                                                                                          |  |  |          | 
|                                                               |  |                                                                                                |           |                                                                                    |   |                                                                                                                                           |  |  |           | 
|Total                                                          |  |                                                                                                | 1,808,600 |                                                                                    | $ | 4.07                                                                                                                                      |  |  | 1,700,000 | 

|    |                                                   | 
|--- | ------------------------------------------------- | 
|    |                                                  
|(1) | Represents
 our 2007 Long-Term Incentive Plan.   
|    |                                                   | 
|(2) | Represents
 our 1998 Restricted Stock Award Plan.

Material Terms of the 1998 Restricted Stock
Award Plan

Our 1998
Restricted Stock Award Plan provides for awards to key employees of not more
than an aggregate of 60,000 shares of our common stock, subject to adjustments
for stock splits, stock dividends and other changes in our capitalization, to
be issued either immediately after the award or at a future date. As of
December 31, 2009, 41,400 shares of our common stock under the Restricted Stock
Award Plan had been awarded and were outstanding. As provided in the plan and
subject to restrictions, shares awarded may not be disposed of by the
recipients for a period of one year from the date of the award. Cash dividends
on shares awarded are held by us for the benefit of the recipients, subject to
the same restrictions as the award. These dividends, without interest, are paid
to the recipients upon lapse of the restrictions.

-13-

---



|                 |                                                                                                                                                                                                                                                                                                                          
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Our Performance: | The graph
 below compares our performance from December 31, 2004 through December 31,
 2009, against the performance of the Nasdaq Market Index and a peer group.
 The peer group consists of A.B. Watley Group Inc., Ameritrade Holding
 Corporation, E*Trade Financial Corporation and The Charles Schwab
 Corporation.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among Siebert Financial Corp., The NASDAQ Composite Index
And A Peer Group

(LINE GRAPH)

| |                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | *$100 invested on December
 31, 2004 in stock, in peer group and NASDAQ Composite Index, including
 reinvestment of dividends. Fiscal year ending December 31.

-14-

---



|                                                |                        
|----------------------------------------------- | -----------------------
|Item 6.                                         | SELECTED FINANCIAL DATA
|(In
 thousands except share and per share data)

The Following Selected Financial Information
Should Be Read In Conjunction With Our Consolidated 
Financial Statements And The Related Notes Thereto.

|                                                      |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|----------------------------------------------------- |  | - | ---------- | - | - | ---------- | - | - | ---------- |  | - | ---------- |  | - | ---------- | 
|                                                      |  |   | 2009       |   |   | 2008       |   |   | 2007       |  |   | 2006       |  |   | 2005       | 
|                                                      |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|                                                      |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|Income statement data:                                |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|Total Revenues                                        |  | $ | 25,390     |   | $ | 29,750     |   | $ | 31,890     |  | $ | 28,818     |  | $ | 29,323     | 
|Net (loss) income                                     |  | $ | (1,183     | ) | $ | (1,760     | ) | $ | 2,258      |  | $ | 3,425      |  | $ | 1,863      | 
|                                                      |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|Net (loss) income per share of common stock           |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|Basic                                                 |  | $ | (0.05      | ) | $ | (0.08      | ) | $ | 0.10       |  | $ | 0.15       |  | $ | 0.08       | 
|Diluted                                               |  | $ | (0.05      | ) | $ | (0.08      | ) | $ | 0.10       |  | $ | 0.15       |  | $ | 0.08       | 
|                                                      |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|Weighted average shares outstanding (basic)           |  |   | 22,193,845 |   |   | 22,208,372 |   |   | 22,206,346 |  |   | 22,129,566 |  |   | 22,093,369 | 
|Weighted average shares outstanding
 (diluted)        |  |   | 22,193,845 |   |   | 22,208,372 |   |   | 22,273,550 |  |   | 22,252,851 |  |   | 22,127,940 | 
|                                                      |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|Statement of financial condition data (at
 year-end): |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|                                                      |  |   |            |   |   |            |   |   |            |  |   |            |  |   |            | 
|Total assets                                          |  | $ | 44,083     |   | $ | 45,579     |   | $ | 47,924     |  | $ | 46,869     |  | $ | 43,027     | 
|Total liabilities excluding subordinated
 borrowings  |  | $ | 4,695      |   | $ | 4,995      |   | $ | 5,704      |  | $ | 6,460      |  | $ | 5,975      | 
|Stockholders equity                                  |  | $ | 39,388     |   | $ | 40,584     |   | $ | 42,220     |  | $ | 40,409     |  | $ | 37,052     | 
|Cash dividends declared on common shares
 (1)         |  | $ | 0          |   | $ | 466        |   | $ | 559        |  | $ | 359        |  | $ | 0          | 

(1) The Chief
Executive Officer of the Company waived the right to receive the dividend in
excess of the aggregate amount paid to other shareholders

|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|Item 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS

This
discussion should be read in conjunction with our audited Consolidated
Financial Statements and the Notes thereto contained elsewhere in this Annual
Report.

The financial crisis affecting the global economy has created historic
volatility in the market place. Our working capital is invested primarily in money market funds, so that
liquidity has not been materially affected. The crisis did have the effect of reducing
participation in the securities market by our retail and institutional customers, which has had an adverse effect on our
revenues. Our Capital Markets division has increased its revenue base and
participated in more corporate offerings despite a slight decrease in
institutional trading. Our affiliate, Siebert Brandford Shank, LLC had a record
year in 2009 by increasing its market share and participating in more
transactions as senior and co-managers. Our expenses include the costs of an
arbitration proceeding commenced in by a former employee following the
termination of his employment, which remains unresolved. The Company believes
that the action is without merit, but the costs of defense which are included as
professional expenses, have adversely affected the Companys results of
operations and may continue to affect the results of operations until the
action is completed.

We,
like other securities firms, are directly affected by general economic and
market conditions including fluctuations in volume and prices of securities,
changes and the prospect of changes in interest rates, and demand for brokerage
and investment banking services, all of which can affect our profitability. In
addition, in periods of reduced financial market activity, profitability is
likely to be adversely affected because certain expenses remain relatively
fixed, including salaries and related costs, portions of communications costs
and occupancy expenses. Accordingly, earnings for any period should not be
considered representative of earnings to be expected for any other period.

Competition
continues to intensify among all types of brokerage firms, including established
discount brokers and new firms entering the on-line brokerage business.
Electronic trading continues to account for an increasing amount of trading
activity, with some firms charging very low trading execution fees that are
difficult for any conventional discount firm to meet. Some of these brokers,
however, impose asset based charges for services such as mailing, transfers and
handling exchanges which we do not currently impose, and also direct their
orders to market makers where they have a financial interest. Continued
competition could limit our growth or even lead to a decline in our customer
base, which would adversely affect our results of operations. Industry-wide
changes in trading practices, such as the continued use of Electronic
Communications Networks, are expected to put continuing pressure on
commissions/fees earned by brokers while increasing volatility.

We
are a party to an Operating Agreement (the Operating Agreement), with Suzanne
Shank and Napoleon Brandford III, the two individual principals (the
Principals) of SBS Financial Products Company LLC, a Delaware limited
liability company (SBSFPC). Pursuant to the terms of the Operating Agreement,
the Company and each of the Principals made an initial capital contribution of $400,000
in exchange for a 33.33% initial interest in SBSFPC. SBSFPC engages in
derivatives transactions related to the municipal underwriting business. The
Operating Agreement provides that profit and loss will be shared 66.66% by the
Principals and 33.33% by us. Operations from SBSFPC is considered to be
integral to our operation.

-15-

---



As
a result of our settlement with Intuit, Inc. of a lawsuit relating to a
Strategic Alliance Agreement between Siebert and Intuit, $2,024,000 of
liabilities recorded by Siebert for expenses prior to December 31, 2003, were
reversed in the fourth quarter of 2007.

-16-

---



On
January 23, 2008, our Board of Directors authorized a buy back of up to 300,000
shares of our common stock. Under this program, shares are purchased from time
to time, at our discretion, in the open market and in private transactions.
During 2009 we repurchased 16,790 shares of common stock for an average price
of $1.99.

Critical Accounting Policies

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

Results of Operations

Year Ended December
31, 2009 Compared To Year Ended December 31, 2008

Revenues.
Total revenues for 2009 were $25.4 million, a decrease of $4.4 million, or
14.7%, from 2008. Commission and fee income decreased $6.0 million, or 24.7%,
from the prior year to $18.2 million due to a decrease in revenues from
institutional trading, commission recapture and retail customer trading.
Institutional equity trading decreased due to a reduction of institutional
customers participating in fewer buyback programs. Retail customer volumes
decreased; however, the average commission charged per trade increased due to
more retail customers executing trades online using our new front end system
which allows customers to execute larger orders which therefore increases the
commission earned per trade ticket.

Investment
banking revenues increased $1.9 million or 54.8%, from the prior year to $5.4
million in 2009 due to our participation in more new issues in the equity and
debt capital markets due to the need for banks and financial companies needing
to raise funds to shore up their capital or paying down United States
Government TARP loans.

Trading
profits increased $404,000, or 32.8%, from the prior year to $1.6 million
primarily due to the addition of a debt sales-trader and an increase in trading
volume due to our customers seeking security in the debt markets.

Income
from interest and dividends decreased $690,000, or 84.9%, from the prior year
to $123,000 primarily due to lower yields on investments in U.S. Treasury Bills
and money market funds and lower cash balances.

Expenses. Total expenses for 2009 were
$32.1 million, a decrease of $2.1 million, or 6.2%, from the prior year.

Employee
compensation and benefit costs decreased $99,000 or 0.8%, from the prior year
to $12.2 million. This decrease was primarily due to the expensing of stock
options granted to directors of our Company which vested in 2008 as well as
reduction in headcount and staff bonus accruals offset by an increase in
commissions paid based on production in the capital markets operation, the
hiring of additional institutional equity sales trader and employee health
insurance.

Clearing
and floor brokerage fees decreased $919,000, or 14.3%, from the prior year to
$5.6 million primarily due to a decrease in volume of trade executions for
retail customers and volume relating to the commission recapture and equity
institutional trading operations offset by an increase in executions for
institutional customers executing trades in the debt market.

Professional
fees decreased $1.1 million, or 13.5%, from the prior year to $7.0 million
primarily due to a decrease in legal fees relating to a dispute with a former
employee and consulting fees relating to the commission recapture business offset by an increase in an accrual for legal settlement.

Advertising
and promotion expense increased $4,000, or 0.5%, from the prior year to
$813,000 primarily due to an increase in content for our new website offset by
decreases in print advertising, production and airing of television commercials
in the Florida region and brochures and direct mailings to our retail customer
base.

-17-

---



Communications
expense increased $39,000, or 1.6%, from the prior year to $2.6 million
primarily due to an increase in local telephone usage associated with our
retail customer base.

Occupancy
costs decreased $40,000, or 3.0%, from the prior year to $1.3 million due to a
decrease in rent in the Florida branches due to one-time costs to set up the
West Palm Beach office in 2008 and a rent reduction in July 2009 for our New
Jersey office offset by opening an Institutional Trading office in Boston, MA.

Other
general and administrative expenses decreased $24,000, or 0.9%, from the prior
year to $2.7 million primarily due to a decrease in exchange fees,
subscriptions, insurance and printing costs offset by increases in travel and
entertainment, supplies, postage, bank charges and dues relating to Securities
Investor Protection Corp.

Income
from our equity investment in Siebert, Brandford, Shank & Co., LLC, an
entity in which Siebert holds a 49% equity interest (SBS), for 2009 was $4.3
million compared to income of $2.1 million for 2008, an increase of $2.1
million, or 104.8%, primarily due to SBS participating in more and larger
municipal bond offerings as senior and co-manager. Loss from our equity
investment in SBS Financial Products Company, LLC, an entity in which we hold a
33% equity interest (SBSFPC) for 2009, was $63,000 as compared to a loss of
$435,000, from the same period in 2008. This decrease was due to a lower mark
to market loss in positions in 2009 than in 2008. Results of operations of
equity investees is considered to be integral to our operations and material to
the results of operations.

Taxes. The tax benefit for the years ended
December 31, 2009 and 2008 was $1.3 million and $1.0 million, respectively, due
to our loss before benefit of $2.5 million and $2.8 million for the years ended
December 31, 2009 and 2008 respectively. Such benefits represented effective
tax rates of 53% in 2009, primarily due to the recording of a tax benefit of $330,000 for the adjustment of prior year accruals and 38% in 2008.

Year Ended December
31, 2008 Compared To Year Ended December 31, 2007

Revenues.
Total revenues for 2008 were $29.8 million, a decrease of $2.1 million, or
6.7%, from 2007 after reclassification of a gain from settlement of a lawsuit in 2007 from revenues to other income. Commission
 and fee income decreased $1.9 million, or 7.3%,
from the prior year to $24.2 million due to a decrease in revenues from
institutional trading and retail customer trading. Retail customer volumes
increased; however, the average commission charged per trade decreased due to
more retail customers executing trades online via the Internet, which has a
lower commission charge per ticket.

Investment
banking revenues increased $112,000, or 3.3%, from the prior year to $3.5
million in 2008 due to our participation in more new issues in the equity and
debt capital markets.

Trading
profits increased $608,000, or 97.4%, from the prior year to $1.2 million
primarily due to the addition of a debt sales-trader and an increase in trading
volume.

Income
from interest and dividends decreased $965,000, or 54.3%, from the prior year
to $813,000 primarily due to lower yields on investments in U.S. Treasury Bills
and lower cash balances.

Expenses. Total expenses for 2008 were
$34.2 million, an increase of $2.9 million, or 9.3%, from the prior year.

Employee
compensation and benefit costs increased $361,000 or 3.0%, from the prior year
to $12.3 million primarily due to the expensing of stock options granted to
directors of our Company which vest immediately and an increase in health
insurance.

Clearing
and floor brokerage fees increased $771,000, or 13.5%, from the prior year to
$6.5 million primarily due to an increase in volume of trade executions for
retail customers and volume relating to the commission recapture operation
offset by a decrease in listed floor executions for institutional customers executed
at the New York Stock Exchange.

Professional
fees increased $1.4 million, or 21.0%, from the prior year to $8.1 million
primarily due to an increase in legal fees relating to a dispute with a former
employee, consulting fees relating to the commission recapture business and
compliance with Sarbanes-Oxley and consulting fees related to the development
of our front end computer system.

Advertising
and promotion expense increased $84,000, or 11.6%, from the prior year to
$809,000 primarily due to an increase in print advertising, brochures and
direct mailings to our retail customer base.

-18-

---



Communications
expense increased $550,000, or 27.3%, from the prior year to $2.6 million
primarily due to an increase in costs associated with our new website which was
launched in the fourth quarter of 2008.

Occupancy
costs increased $5,000, or 0.4%, from the prior year to $1.3 million due to an
increase in rent in the Florida branches and New Jersey office offset by a
reduction in rent for our California branch.

Other
general and administrative expenses decreased $249,000, or 8.5%, from the prior
year to $2.7 million primarily due to a decrease in depreciation and
amortization, placement fees, travel and entertainment, insurance and printing
costs offset by increases in subscriptions, computer related expenses and
office expenses.

Income
from our equity investment in Siebert, Brandford, Shank & Co., LLC, an
entity in which Siebert holds a 49% equity interest (SBS), for 2008 was $2.1
million compared to income of $1.4 million for 2007, an increase of $743,000,
or 53.4%, primarily due to SBS participating in more and larger municipal bond
offerings. Loss from our equity investment in SBS Financial Products Company,
LLC, an entity in which we hold a 33% equity interest (SBSFPC) for 2008, was
$435,000 as compared to income of $40,000, from the same period in 2007. This
loss was primarily due to a decline in fair value of SBSFPCs investments in
the fourth quarter of 2008. Results of operations of equity investees is
considered to be integral to our operations and material to the results of
operations.

Taxes. The tax benefit for the year ended
December 31, 2008 was $1,031,000 based on our loss before income tax of
$2,791,000. The tax provision for the year ended December 31, 2007 was $1.7
million based on our income before tax of $4.0 million. Such benefit and
provision represented effective tax rates of 38% and 43%, respectively.

Liquidity and Capital
Resources

Our
assets are highly liquid, consisting generally of cash, money market funds,
municipal securities and securities freely saleable in the open market. Our
total assets at December 31, 2009 were $44 million, of which we regarded $27.8
million, or 63%, as highly liquid.

Siebert
is subject to the net capital requirements of the SEC, the NYSE and other
regulatory authorities. At December 31, 2009, Sieberts regulatory net capital
was $21.1 million, which was $20.9 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 loan to SBS up to $1.2 million on a subordinated basis
collateralized by cash equivalents of approximately $1.5 million as of December
31, 2009. Amounts obligated to be loaned by Siebert under the facility are
reflected on our balance sheet as cash equivalents - restricted. SBS pays
Siebert interest on this amount at the rate of 4% per annum. The facility
expires on August 31, 2011 at which time SBS is obligated to repay to Siebert
any amounts borrowed by SBS thereunder.

Contractual
Obligations

Below
is a table that presents our obligations and commitments at December 31, 2009:

|                             |  |                       |           |                   |   |           |  |           |         |                       |   |   |  |   |   | 
|---------------------------- |  | --------------------- | --------- | ----------------- | - | --------- |  | --------- | ------- | --------------------- | - | - |  | - | - | 
|                             |  | Payment Due By Period |          
|Contractual
 Obligations     |  | Total                 |           | Less Than
 1 Year |   | 1-3 Years |  | 3-5 Years |         | More Than
 Five Years |  
|Operating
 lease obligations |  | $                     | 1,495,000 |                   | $ | 925,000   |  | $         | 570,000 |                       | $ | 0 |  | $ | 0 | 

Off-Balance Sheet Arrangements

Retail customer transactions are cleared through clearing
brokers on a fully disclosed basis. If customers do not fulfill their
contractual obligations, the clearing broker may charge Siebert for any loss
incurred in connection with the purchase or sale of securities at prevailing
market prices to satisfy the customer obligations. Siebert regularly monitors
the activity in its customer accounts for compliance with its margin
requirements. Siebert is exposed to the risk of loss on unsettled customer transactions
if customers and other counterparties are unable to fulfill their contractual
obligations. There were no material losses for unsettled customer transactions
in 2009.

|                                                                        | 
|----------------------------------------------------------------------- | 
|Item 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Financial Instruments Held For Trading
Purposes:

Through
Siebert, we maintain inventories in exchange-listed equity securities and
municipal securities on both a long and short basis. We did not have any short
positions at December 31, 2009. The Company does not directly engage in
derivative transactions, has no interest in any special purpose entity and has
no liabilities, contingent or otherwise, for the debt of another entity

-19-

---



except for
Sieberts obligation under its Secured Demand Note Collateral Agreement of $1.2
million executed in favor of SBS. SBS pays Siebert interest on this amount at
the rate of 4% per annum. Siebert earned interest of $48,000 in 2009 and
$64,000 in 2008 and 2007 from SBS.

Financial Instruments Held For Purposes Other
Than Trading:

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

Retail customer transactions are cleared through clearing
brokers on a fully disclosed basis. If customers do not fulfill their
contractual obligations, the clearing broker may charge Siebert for any loss
incurred in connection with the purchase or sale of securities at prevailing
market prices to satisfy the customers obligations. Siebert regularly monitors
the activity in its customer accounts for compliance with its margin
requirements. Siebert is exposed to the risk of loss on unsettled customer
transactions if customers and other counterparties are unable to fulfill their
contractual obligations. There were no material losses for unsettled customer
transactions in 2009.

|        |                                            
|------- | -------------------------------------------
|Item 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See financial
statements and supplementary data required pursuant to this item beginning on
page F-1 of this Report on Form 10-K.

|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
 FINANCIAL DISCLOSURE

None.

|            |                        
|----------- | -----------------------
|Item 9A(T). | CONTROLS AND PROCEDURES

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

-20-

---



Managements Report on Internal Control over
Financial Reporting

Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as that term is defined in Exchange Act Rule
13a-15(f)). To evaluate the effectiveness of our internal control over
financial reporting, we use the framework in Internal ControlIntegrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (the COSO Framework). Using the COSO Framework, our management,
including our Chief Executive Officer and Chief Financial Officer, evaluated
our internal control over financial reporting and concluded that our internal
control over financial reporting was effective as of December 31, 2009.

This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Managements report was not subject to attestation by the our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only managements report in this annual
report.

Changes in Internal Controls over Financial
Reporting

There
were no changes in our internal controls over financial reporting during the
most recently completed fiscal quarter that materially affected, or are
reasonably likely to materially affect, our internal controls over financial
reporting.

Limitation of the Effectiveness of Internal
Controls

None

|         |                  
|-------- | -----------------
|Item 9B. | OTHER INFORMATION

None

-21-

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PART III

|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

|                                                                                                                                                                          |     |                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | -------------------------------------
|                                                                                                                                                                          | (a) | Identification
 of Directors         
|                                                                                                                                                                          |     |                                      
|This
 information is incorporated by reference from our definitive proxy statement
 to be filed by the Company pursuant to Regulation 14A on or prior to April
 30, 2010.
|                                                                                                                                                                         
|                                                                                                                                                                          | (b) | Identification
 of Executive Officers

|                                                                                                |  |     |  |                                                               
|----------------------------------------------------------------------------------------------- |  | --- |  | --------------------------------------------------------------
|Name                                                                                            |  | Age |  | Position                                                      
|                                                                                                |  |     |  |                                                               
|                                                                                                |  |     |  |                                                               
|Muriel F.
 Siebert                                                                              |  | 77  |  | Chairwoman
 and President                                     
|                                                                                                |  |     |  |                                                               
|Ameen Esmail                                                                                    |  | 51  |  | Executive
 Vice President and Director of Business Development
|                                                                                                |  |     |  |                                                               
|Joseph M.
 Ramos, Jr.                                                                           |  | 51  |  | Executive
 Vice President and Chief Financial Officer         
|                                                                                                |  |     |  |                                                               
|Jeanne
 Rosendale                                                                               |  | 45  |  | Executive
 Vice President and General Counsel                 
|                                                                                                |  |     |  |                                                               
|Timothy O
 Leary                                                                               |  | 47  |  | Executive
 Vice President                                     
|                                                                                                |  |     |  |                                                               
|Daniel Iesu                                                                                     |  | 50  |  | Secretary                                                     
|                                                                                                |  |     |  |                                                               
|Certain information
 regarding each executive officers business experience is set forth below.

Muriel
F. Sieberthas been Chairwoman, President and a
director of Siebert since 1967 and the Company since November 8, 1996. Ms.
Siebert became the first woman member of the New York Stock Exchange on
December 28, 1967 and served as the first woman Superintendent of Banks of the
State of New York from 1977 to 1982. She is director of the New York State
Business Council and the Boy Scouts of Greater New York. She is the founder and
past president of the Womens Forum, a former member of the State of New York
Commission on Judicial Nomination and is on the executive committee of the
Economic Club of New York.

Ameen
Esmailhas been Executive Vice President and Director
of Business Development since July 3, 2003. From 1984 to 1996, Mr. Esmail
served as an Executive Vice President of Siebert. From 1996 to 2003, Mr. Esmail
worked as an independent consultant servicing the financial securities
industry. Mr. Esmail earned a MBA from New York Universitys Sterns Graduate
School of Business in 2000.

Joseph
M. Ramos, Jr.
has been Executive Vice President, Chief Financial Officer and Assistant
Secretary of Siebert since February 10, 2003 and Chief Financial Officer of
Siebert, Brandford Shank, LLC since April 20, 2009. From May 1999 to February
2002, Mr. Ramos served as Chief Financial Officer of Internet Financial
Services, Inc. from November 1996 to May 1999, Mr. Ramos served as Chief
Financial Officer of Nikko Securities International, Inc. From September 1987
to March 1996, Mr. Ramos worked at Cantor Fitzgerald and held various
accounting and management positions, the last as Chief Financial Officer of
their registered broker-dealer based in Los Angeles. From October 1982 to
September 1987, Mr. Ramos was an audit manager for Deloitte & Touche LLP, a
public accounting firm. Mr. Ramos is a Certified Public Accountant licensed in
the State of New York.

Jeanne
M. Rosendalehas been Executive Vice President,
General Counsel of Siebert since May 3, 2004. From February 2003 to April 2004,
Ms. Rosendale served as Global Director Compliance for Knight Equity Markets.
From 2001 through the end of 2002, Ms. Rosendale served as Managing Director,
General Counsel and Chief Compliance Officer for TD Securities (USA) Inc. Ms.
Rosendales background includes senior level legal positions with Citigroup and
the law firm Weil Gotshal & Manges, LLP. Ms. Rosendale received both her
B.A. and J.D., with honors, from Fordham University. She is active in various
industry groups such as the SIA, the Bond Market Association, the LSTA and
ISDA.

Timothy
O Learyjoined Siebert on June 6, 2007 and was appointed an Executive Vice President
in April 2008. Mr. OLeary oversees Capital Markets, Retail and Branch
Operations, Marketing, Business Development and the Technology group. From
March 2006 to June 2007, Mr. OLeary was a financial consultant with Smith
Barney and from January 2003 to January 2006, Mr. OLeary was the President/Owner
of Ironvilla Development Corporation, a residual real estate development
company. From November 2001 to January 2003, Mr. OLeary was the Senior Vice
President at Datek Online, Inc. From October 2000 to November 2001, Mr. OLeary
was the Managing Director of Operations at Josephthal & Co., Inc. where he
was responsible for all facets of the brokerage operations. From March 1985 to
October 2000, Mr. OLeary was with TD Waterhouse, Inc., the last five years as
the Senior Vice President of Retail Management.

Daniel
Iesuhas been Secretary of Siebert since October 1996
and the Company since November 8, 1996. He has been Controller of Siebert since
1989.

-22-

---



| |     |                                                   
| | --- | --------------------------------------------------
| | (c) | Compliance
 with Section 16(a) of the Exchange Act

This
information is incorporated by reference from our definitive proxy statement to
be filed pursuant to Regulation 14A on or prior to April 30, 2010.

-23-

---



| |     |                
| | --- | ---------------
| | (d) | Code of
 Ethics

We
have adopted a financial code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer and all
other employees performing similar functions. This financial code of ethics is
posted on our website. The Internet address for our website is
http://www.siebertnet.com. We intend to satisfy the disclosure requirement
under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a
provision of this code of ethics by either filing a Form 8-K or posting such
information on our website, at the address and location specified above, within
four business days following the date of such amendment or waiver.

The
information required by this item not set forth herein is incorporated by
reference to our definitive proxy statement to be filed pursuant to Regulation
14A on or prior to April 30, 2010.

|         |                       
|-------- | ----------------------
|Item 11. | EXECUTIVE COMPENSATION

The
information required by this item is incorporated by reference from our
definitive proxy statement to be filed pursuant to Regulation 14A on or prior
to April 30, 2010.

|         |                                                                                                
|-------- | -----------------------------------------------------------------------------------------------
|Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
 RELATED STOCKHOLDER MATTERS

The
information required by this item is incorporated by reference from our
definitive proxy statement to be filed pursuant to Regulation 14A on or prior
to April 30, 2010.

|         |                                                                           
|-------- | --------------------------------------------------------------------------
|Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
 INDEPENDENCE

The
information required by this item is incorporated by reference from our
definitive proxy statement to be filed pursuant to Regulation 14A on or prior
to April 30, 2010.

|         |                                       
|-------- | --------------------------------------
|Item 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES

The
information required in this item is incorporated by reference from our
definitive proxy statement to be filed pursuant to Regulation 14A on or prior
to April 30, 2010.

-24-

---



PART IV

|         |                                           
|-------- | ------------------------------------------
|Item 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The
exhibits required by Item 601 of the Regulations S-K filed as part of, or
incorporated by reference in, this report are listed in the accompanying
Exhibit Index.

| |     |                                                           
| | --- | ----------------------------------------------------------
| | (a) | The
 following documents are filed as part of this report:
| |     |                                                           
| | 1.  | Financial
 Statements                                     

The
consolidated Financial statements for the year ended December 31, 2009 commence
on page F-1 of this report on Form 10-K.

| |    |                               
| | -- | ------------------------------
| | 2. | Financial
 Statement Schedules

None.

| |    |         
| | -- | --------
| | 3. | Exhibits

The exhibits
required by Item 601 of the Regulation S-K filed as part of, or incorporated by
reference in, this report are listed in the accompanying Exhibit Index. Exhibit
Numbers 10.1, 10.2 and 10.6 are management contracts, compensatory plans or
arrangements.

-25-

---



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                                    |  |     
|----------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                    |  | Page
|SIEBERT FINANCIAL CORP.                                                                                                             |  |     
|                                                                                                                                    |  |     
|Report of Independent Registered Public
 Accounting Firm                                                                            |  | F-1 
|                                                                                                                                    |  |     
|Consolidated Statements of Financial
 Condition at December 31, 2009 and 2008                                                       |  | F-2 
|                                                                                                                                    |  |     
|Consolidated Statements of Operations for
 each of the years in the three-year period ended December 31, 2009                       |  | F-3 
|                                                                                                                                    |  |     
|Consolidated Statements of Changes in
 Stockholders Equity for each of the years in the three-year period ended
 December 31, 2009 |  | F-4 
|                                                                                                                                    |  |     
|Consolidated Statements of Cash Flows for
 each of the years in the three-year period ended December 31, 2009                       |  | F-5 
|                                                                                                                                    |  |     
|Notes to Consolidated Financial Statements                                                                                          |  | F-6 
|                                                                                                                                    |  |     
|SIEBERT, BRANDFORD, SHANK & CO., LLC                                                                                                |  |     
|                                                                                                                                    |  |     
|Report of Independent Registered Public
 Accounting Firm                                                                            |  | F-17
|                                                                                                                                    |  |     
|Statements of Financial Condition at December
 31, 2009 and 2008                                                                    |  | F-18
|                                                                                                                                    |  |     
|Statements of Operations for each of the
 years in the three-year period ended December 31, 2009                                    |  | F-19
|                                                                                                                                    |  |     
|Statements of Changes in Members Capital for
 each of the years in the three-year period ended December 31, 2009                   |  | F-20
|                                                                                                                                    |  |     
|Statements of Cash Flows for each of the
 years in the three-year period ended December 31, 2009                                    |  | F-22
|                                                                                                                                    |  |     
|Notes to Financial Statements                                                                                                       |  | F-23

---



REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

Board of Directors and
Stockholders
Siebert Financial Corp.

We have audited the
accompanying consolidated statements of financial condition of Siebert
Financial Corp. and subsidiaries (the Company) as of December 31, 2009 and
2008, and the related consolidated statements of operations, changes in
stockholders equity and cash flows for each of the years in the three-year
period ended December 31, 2009. These financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Siebert Financial Corp. and subsidiaries
as of December 31, 2009 and 2008, and the consolidated results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2009 in conformity with accounting principles generally
accepted in the United States of Amercia.

/s/ Eisner LLP

New York, New York
March 31, 2010

F-1

---



SIEBERT FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION

|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | -
|                                                                                                                                                                                                                                    |  | December 31, |           
|                                                                                                                                                                                                                                    |  | 2009         |            | 2008 |  
|ASSETS                                                                                                                                                                                                                              |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|Cash and cash equivalents                                                                                                                                                                                                           |  | $            | 24,184,000 |      | $ | 29,617,000 |  
|Cash equivalents - restricted                                                                                                                                                                                                       |  |              | 1,532,000  |      |   | 1,300,000  |  
|Receivable from clearing broker                                                                                                                                                                                                     |  |              | 1,954,000  |      |   | 1,682,000  |  
|Securities owned, at fair value                                                                                                                                                                                                     |  |              | 1,607,000  |      |   | 758,000    |  
|Furniture, equipment and leasehold improvements, net                                                                                                                                                                                |  |              | 1,569,000  |      |   | 1,481,000  |  
|Investments in and advances to affiliates                                                                                                                                                                                           |  |              | 9,040,000  |      |   | 6,480,000  |  
|Income tax refund receivable                                                                                                                                                                                                        |  |              | 1,074,000  |      |   | 1,312,000  |  
|Prepaid expenses and other assets                                                                                                                                                                                                   |  |              | 1,050,000  |      |   | 1,026,000  |  
|Intangibles, net                                                                                                                                                                                                                    |  |              | 750,000    |      |   | 775,000    |  
|Deferred taxes                                                                                                                                                                                                                      |  |              | 1,323,000  |      |   | 1,148,000  |  
|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                    |  | $            | 44,083,000 |      | $ | 45,579,000 |  
|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|LIABILITIES
 AND STOCKHOLDERS EQUITY                                                                                                                                                                                               |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|Liabilities:                                                                                                                                                                                                                        |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|Accounts payable and accrued liabilities                                                                                                                                                                                            |  | $            | 4,695,000  |      | $ | 4,995,000  |  
|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|Commitments and contingent liabilities - Note I                                                                                                                                                                                     |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|Stockholders equity:                                                                                                                                                                                                               |  |              |            |      |   |            |  
|Common stock, $.01 par value; 49,000,000 shares authorized,
 23,211,846 shares issued and 22,185,325 shares outstanding at December 31,
 2009 and 23,211,846, shares issued and 22,202,115 shares outstanding at December
 31, 2008 |  |              | 232,000    |      |   | 232,000    |  
|Additional paid-in capital                                                                                                                                                                                                          |  |              | 19,474,000 |      |   | 19,454,000 |  
|Retained earnings                                                                                                                                                                                                                   |  |              | 24,249,000 |      |   | 25,432,000 |  
|Less: 1,026,521 and 1,009,731 shares of treasury stock at cost at
 December 31, 2009 and 2008                                                                                                                                       |  |              | (4,567,000 | )    |   | (4,534,000 | )
|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                    |  |              | 39,388,000 |      |   | 40,584,000 |  
|                                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                    |  | $            | 44,083,000 |      | $ | 45,579,000 |  

See notes to consolidated financial statements.

F-2

---



CONSOLIDATED
STATEMENTS OF OPERATIONS

|                                                       |  |                         |            |      |   |            |   |   |            | 
|------------------------------------------------------ |  | ----------------------- | ---------- | ---- | - | ---------- | - | - | ---------- | 
|                                                       |  | Year Ended December 31, |           
|                                                       |  |                         |           
|                                                       |  | 2009                    |            | 2008 |   | 2007       |  
|                                                       |  |                         |            |      |   |            |  
|                                                       |  |                         |            |      |   |            |   |   |            | 
|Revenue:                                               |  |                         |            |      |   |            |   |   |            | 
|Commissions and fees                                   |  | $                       | 18,244,000 |      | $ | 24,224,000 |   | $ | 26,119,000 | 
|Investment banking                                     |  |                         | 5,387,000  |      |   | 3,481,000  |   |   | 3,369,000  | 
|Trading profits                                        |  |                         | 1,636,000  |      |   | 1,232,000  |   |   | 624,000    | 
|Interest and dividends                                 |  |                         | 123,000    |      |   | 813,000    |   |   | 1,778,000  | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|                                                       |  |                         | 25,390,000 |      |   | 29,750,000 |   |   | 31,890,000 | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|Expenses:                                              |  |                         |            |      |   |            |   |   |            | 
|Employee compensation and benefits                     |  |                         | 12,219,000 |      |   | 12,318,000 |   |   | 11,957,000 | 
|Clearing fees, including floor brokerage               |  |                         | 5,545,000  |      |   | 6,464,000  |   |   | 5,693,000  | 
|Professional fees                                      |  |                         | 6,983,000  |      |   | 8,070,000  |   |   | 6,667,000  | 
|Advertising and promotion                              |  |                         | 813,000    |      |   | 809,000    |   |   | 725,000    | 
|Communications                                         |  |                         | 2,606,000  |      |   | 2,567,000  |   |   | 2,017,000  | 
|Occupancy                                              |  |                         | 1,279,000  |      |   | 1,319,000  |   |   | 1,314,000  | 
|Other general and administrative                       |  |                         | 2,669,000  |      |   | 2,693,000  |   |   | 2,942,000  | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|                                                       |  |                         | 32,114,000 |      |   | 34,240,000 |   |   | 31,315,000 | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|Income from
 equity investees                          |  |                         | 4,224,000  |      |   | 1,699,000  |   |   | 1,432,000  | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|Gain on settlement
 of lawsuit                         |  |                         |            |      |   |            |   |   | 2,024,000  | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|(Loss)
 income before income taxes                     |  |                         | (2,500,000 | )    |   | (2,791,000 | ) |   | 4,031,000  | 
|Income tax
 (benefit) expense                          |  |                         | (1,317,000 | )    |   | (1,031,000 | ) |   | 1,773,000  | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|Net (loss)
 income                                     |  | $                       | (1,183,000 | )    | $ | (1,760,000 | ) | $ | 2,258,000  | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|Net (loss)
 income per share of common stock - basic   |  | $                       | (0.05      | )    | $ | (0.08      | ) | $ | 0.10       | 
|Net (loss)
 income per share of common stock - diluted |  | $                       | (0.05      | )    | $ | (0.08      | ) | $ | 0.10       | 
|                                                       |  |                         |            |      |   |            |   |   |            | 
|Weighted
 average shares outstanding - basic           |  |                         | 22,193,845 |      |   | 22,208,372 |   |   | 22,206,346 | 
|Weighted
 average shares outstanding - diluted         |  |                         | 22,193,845 |      |   | 22,208,372 |   |   | 22,273,550 | 

See notes to consolidated financial
statements.

F-3

---



CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

|                                                                          |  |                    |  |                 |         |                               |   |                    |  |                    |            |        |           |       |   |            |   |   |            |  
|------------------------------------------------------------------------- |  | ------------------ |  | --------------- | ------- | ----------------------------- | - | ------------------ |  | ------------------ | ---------- | ------ | --------- | ----- | - | ---------- | - | - | ---------- | -
|                                                                          |  | Common Stock       |  | Treasury Stock  |         |                               |   |                   
|                                                                          |  |                    |  |                 |         |                               |   |                   
|                                                                          |  | Number
 Of
 Shares |  | $.01 Par
 Value |         | Additional
 Paid -In
 Capital |   | Retained
 Earnings |  | Number
 Of
 Shares |            | Amount |           | Total |  
|                                                                          |  |                    |  |                 |         |                               |   |                    |  |                    |            |        |           |       |  
|                                                                          |  |                    |  |                 |         |                               |   |                    |  |                    |            |        |           |       |   |            |   |   |            |  
|Balance - January 1, 2007                                                 |  | 23,202,046         |  | $               | 232,000 |                               | $ | 18,719,000         |  | $                  | 25,962,000 |        | 999,500   |       | $ | (4,504,000 | ) | $ | 40,409,000 |  
|Net income                                                                |  |                    |  |                 |         |                               |   |                    |  |                    | 2,258,000  |        |           |       |   |            |   |   | 2,258,000  |  
|Issuance of shares in connection with
 exercise of employee stock options |  | 9,800              |  |                 |         |                               |   | 27,000             |  |                    |            |        |           |       |   |            |   |   | 27,000     |  
|Dividend on common stock ($.12 per share)                                 |  |                    |  |                 |         |                               |   |                    |  |                    | (560,000   | )      |           |       |   |            |   |   | (560,000   | )
|Tax benefit arising from exercise of
 employee stock options              |  |                    |  |                 |         |                               |   | 2,000              |  |                    |            |        |           |       |   |            |   |   | 2,000      |  
|Stock based compensation                                                  |  |                    |  |                 |         |                               |   | 84,000             |  |                    |            |        |           |       |   |            |   |   | 84,000     |  
|                                                                          |  |                    |  |                 |         |                               |   |                    |  |                    |            |        |           |       |   |            |   |   |            |  
|                                                                          |  |                    |  |                 |         |                               |   |                    |  |                    |            |        |           |       |   |            |   |   |            |  
|Balance - December 31, 2007                                               |  | 23,211,846         |  |                 | 232,000 |                               |   | 18,832,000         |  |                    | 27,660,000 |        | 999,500   |       |   | (4,504,000 | ) |   | 42,220,000 |  
|Net loss                                                                  |  |                    |  |                 |         |                               |   |                    |  |                    | (1,760,000 | )      |           |       |   |            |   |   | (1,760,000 | )
|Treasury share purchases                                                  |  |                    |  |                 |         |                               |   |                    |  |                    |            |        | 10,231    |       |   | (30,000    | ) |   | (30,000    | )
|Dividend on common stock ($.10 per share)                                 |  |                    |  |                 |         |                               |   |                    |  |                    | (468,000   | )      |           |       |   |            |   |   | (468,000   | )
|Stock based compensation                                                  |  |                    |  |                 |         |                               |   | 622,000            |  |                    |            |        |           |       |   |            |   |   | 622,000    |  
|                                                                          |  |                    |  |                 |         |                               |   |                    |  |                    |            |        |           |       |   |            |   |   |            |  
|                                                                          |  |                    |  |                 |         |                               |   |                    |  |                    |            |        |           |       |   |            |   |   |            |  
|Balance - December 31, 2008                                               |  | 23,211,846         |  |                 | 232,000 |                               |   | 19,454,000         |  |                    | 25,432,000 |        | 1,009,731 |       |   | (4,534,000 | ) |   | 40,584,000 |  
|Net loss                                                                  |  |                    |  |                 |         |                               |   |                    |  |                    | (1,183,000 | )      |           |       |   |            |   |   | (1,183,000 | )
|Treasury share purchases                                                  |  |                    |  |                 |         |                               |   |                    |  |                    |            |        | 16,790    |       |   | (33,000    | ) |   | (33,000    | )
|Stock based compensation                                                  |  |                    |  |                 |         |                               |   | 20,000             |  |                    |            |        |           |       |   |            |   |   | 20,000     |  
|                                                                          |  |                    |  |                 |         |                               |   |                    |  |                    |            |        |           |       |   |            |   |   |            |  
|Balance - December 31, 2009                                               |  | 23,211,846         |  | $               | 232,000 |                               | $ | 19,474,000         |  | $                  | 24,249,000 |        | 1,026,521 |       | $ | (4,567,000 | ) | $ | 39,388,000 |  
|                                                                          |  |                    |  |                 |         |                               |   |                    |  |                    |            |        |           |       |   |            |   |   |            |  

See notes to consolidated financial statements.

F-4

---



CONSOLIDATED
STATEMENTS OF CASH FLOWS

|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|--------------------------------------------------------------------------------------------------- |  | ------------------------ | ---------- | ---- | - | ---------- | - | - | ---------- | -
|                                                                                                    |  | Year
 Ended December 31, |           
|                                                                                                    |  | 2009                     |            | 2008 |   | 2007       |  
|Cash Flows From Operating Activities:                                                               |  |                          |            |      |   |            |   |   |            |  
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Net (loss) income                                                                                   |  | $                        | (1,183,000 | )    | $ | (1,760,000 | ) | $ | 2,258,000  |  
|Adjustments to reconcile net (loss) income
 to net cash (used in) provided by operating activities: |  |                          |            |      |   |            |   |   |            |  
|Depreciation and amortization                                                                       |  |                          | 482,000    |      |   | 479,000    |   |   | 690,000    |  
|Income from equity investees                                                                        |  |                          | (4,224,000 | )    |   | (1,699,000 | ) |   | (1,432,000 | )
|Distribution from equity investees                                                                  |  |                          | 1,539,000  |      |   | 1,099,000  |   |   | 2,428,000  |  
|Deferred taxes                                                                                      |  |                          | (175,000   | )    |   | (281,000   | ) |   | (40,000    | )
|Stock based compensation                                                                            |  |                          | 20,000     |      |   | 622,000    |   |   | 84,000     |  
|Changes in:                                                                                         |  |                          |            |      |   |            |   |   |            |  
|Cash and cash equivalents - restricted                                                              |  |                          | (232,000   | )    |   |            |   |   |            |  
|Securities owned, at fair value                                                                     |  |                          | (849,000   | )    |   | (19,000    | ) |   | (739,000   | )
|Receivable from clearing broker                                                                     |  |                          | (272,000   | )    |   | 1,000      |   |   | 785,000    |  
|Income tax refund receivable                                                                        |  |                          | 238,000    |      |   | (1,312,000 | ) |   |            |  
|Prepaid expenses and other assets                                                                   |  |                          | (24,000    | )    |   | (90,000    | ) |   | 275,000    |  
|Accounts payable and accrued liabilities                                                            |  |                          | (300,000   | )    |   | (709,000   | ) |   | (756,000   | )
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Net cash (used in) provided by operating
 activities                                                |  |                          | (4,980,000 | )    |   | (3,669,000 | ) |   | 3,553,000  |  
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Cash Flows From Investing Activities:                                                               |  |                          |            |      |   |            |   |   |            |  
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Purchase of furniture, equipment and
 leasehold improvements                                        |  |                          | (545,000   | )    |   | (827,000   | ) |   | (906,000   | )
|Collection (Payment) of advances made to
 equity investees                                          |  |                          | 125,000    |      |   | 22,000     |   |   | (133,000   | )
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Net cash used in investing activities                                                               |  |                          | (420,000   | )    |   | (805,000   | ) |   | (1,039,000 | )
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Cash Flows From Financing Activities:                                                               |  |                          |            |      |   |            |   |   |            |  
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Dividend on common stock                                                                            |  |                          |            |      |   | (468,000   | ) |   | (560,000   | )
|Purchase of treasury shares                                                                         |  |                          | (33,000    | )    |   | (30,000    | ) |   |            |  
|Proceeds from exercise of options                                                                   |  |                          |            |      |   |            |   |   | 27,000     |  
|Tax benefit of exercised employee stock
 options                                                    |  |                          |            |      |   |            |   |   | 2,000      |  
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Net cash used in financing activities                                                               |  |                          | (33,000    | )    |   | (498,000   | ) |   | (531,000   | )
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Net (decrease) increase in cash and cash
 equivalents                                               |  |                          | (5,433,000 | )    |   | (4,972,000 | ) |   | 1,983,000  |  
|Cash and cash equivalents - beginning of
 year                                                      |  |                          | 29,617,000 |      |   | 34,589,000 |   |   | 32,606,000 |  
|                                                                                                    |  |                          |            |      |   |            |   |   |            |  
|Cash and cash equivalents - end of year                                                             |  | $                        | 24,184,000 |      | $ | 29,617,000 |   | $ | 34,589,000 |  
|Supplemental Cash Flow Disclosures:                                                                 |  |                          |            |      |   |            |   |   |            |  
|Cash paid for:                                                                                      |  |                          |            |      |   |            |   |   |            |  
|Income taxes                                                                                        |  | $                        | 239,000    |      | $ | 575,000    |   | $ | 2,087,000  |  

See notes to consolidated financial statements.

F-5

---



SIEBERT FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] | Business and Principles of Consolidation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Siebert
 Financial Corp. (Financial), through its wholly owned subsidiary, Muriel
 Siebert & Co., Inc. (Siebert), engages in the business of providing
 discount brokerage services for customers, investment banking services for
 institutional clients and trading securities for its own account, and,
 through its wholly owned subsidiary, Siebert Womens Financial Network, Inc.
 (WFN), engages in providing products, services and information devoted to
 womens financial needs. The accompanying consolidated financial statements includes the accounts of Financial and its
 subsidiaries. All significant intercompany accounts and
 transactions have been eliminated. Financial, Siebert and WFN collectively
 are referred to herein as the Company.The municipal bond investment
 banking business is conducted by Siebert Brandford Shank & Co., LLC (SBS),
 and related derivatives transactions are conducted by SBS Financial Products
 Company, LLC (SBSFP), investees not controlled or majority-owned, which are accounted for by the equity
 method of accounting (see Note C). The equity method provides that Siebert
 records its share of the investees earnings or losses in its results of
 operations. Operations of equity investees are considered integral to
 Sieberts operations.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[2] | Securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Securities
 owned are carried at fair value. Interest is recorded on an accrual basis.
 Dividends are recorded on the ex-dividend date. Siebert clears all its
 security transactions through unaffiliated clearing firms on a fully
 disclosed basis. Accordingly, Siebert does not hold funds or securities for,
 or owe funds or securities to, its customers. Those functions are performed
 by the clearing firms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Authoritative
 accounting guidance defines fair value, establishes a framework for measuring
 fair value and establishes a fair value hierarchy which prioritizes the
 inputs to valuation techniques. Fair value is the price that would be
 received to sell an asset or paid to transfer a liability in an orderly
 transaction between participants at the measurement date. The fair value
 hierarchy ranks the quality and reliability of the information used to
 determine fair values. Financial assets and liabilities carried at fair value
 are classified and disclosed in one of the following three categories:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Level 1  valued
 based on quoted prices at the measurement date for identical assets or
 liabilities trading in active markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Level 2 
 quoted prices in active markets for similar assets and liabilities and inputs
 that are observable for the asset or liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Level 3 
 valuations derived from valuation techniques in which one or more significant
 inputs is not readily observable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The
 classification of securities owned is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|                 |  |         |         |         |   |           |  |   |           | 
|---------------- |  | ------- | ------- | ------- | - | --------- |  | - | --------- | 
|                 |  | 2009    |         |         |   |          
|Securities owned |  | Level 1 |         | Level 2 |   | Total     | 
|Municipal
 bonds |  |         |        |         | $ | 1,405,000 |  | $ | 1,405,000 | 
|Common stock     |  | $       | 202,000 |         |   |          |  | $ | 202,000   | 
|                 |  | $       | 202,000 |         | $ | 1,405,000 |  | $ | 1,607,000 | 

|                 |  |         |         |         |   |         |  |   |         | 
|---------------- |  | ------- | ------- | ------- | - | ------- |  | - | ------- | 
|                 |  | 2008    |         |         |   |         | 
|                 |  | Level 1 |         | Level 2 |   | Total   | 
|Municipal
 bonds |  |         |        |         | $ | 504,000 |  | $ | 504,000 | 
|Common stock     |  | $       | 254,000 |         |   |        |  |   | 254,000 | 
|                 |  | $       | 254,000 |         | $ | 504,000 |  | $ | 758,000 | 

Common
stock is valued on the last business day of the year at the last available
reported sales price on the primary securities exchange.

F-6

---



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Municipal
 bonds are valued based on prices obtained from pricing sources, which drive
 values from observable inputs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|[3]  | Income Taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | The Company
 accounts for income taxes utilizing the asset and liability approach
 requiring the recognition of deferred tax assets and liabilities for the
 expected future tax consequences of temporary differences between the basis
 of assets and liabilities for financial reporting purposes and tax purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|[4]  | Furniture, Equipment and Leasehold Improvements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | Furniture,
 equipment and leasehold improvements are stated at cost, net of accumulated
 depreciation and amortization. Depreciation is calculated using the
 straight-line method over the estimated useful lives of the assets, generally
 five years. Leasehold improvements are amortized over the shorter of the
 estimated useful life or period of the lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|[5]  | Cash Equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | For purposes
 of reporting cash flows, cash equivalents consist of highly liquid
 investments purchased with original maturity of three months or less
 including money market funds and commercial paper.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | Cash equivalents 
 restricted represents $1,532,000 of cash invested in a money market account
 which serves as collateral for a secured demand note payable in the amount of
 $1,200,000 to SBS (See Note I).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|[6]  | Advertising Costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | Advertising
 costs are charged to expense as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|[7]  | Use of Estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | The
 preparation of financial statements in conformity with accounting principles
 generally accepted in the United States of America requires management to
 make estimates and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent assets and liabilities at the date
 of the financial statements and the reported amounts of revenues and expenses
 during the reporting period. Actual results could differ from those
 estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|[8]  | Per Share Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | Basic
 earnings (loss) per share is calculated by dividing net income (loss) by the
 weighted average outstanding shares during the period. Diluted earnings per
 share is calculated by dividing net income by the number of shares
 outstanding under the basic calculation and adding all dilutive securities,
 which consist of options. The treasury stock method is used to reflect the
 dilutive effect of outstanding options, which, for 2007 amounted to 67,204
 additional shares, added to the basic weighted average outstanding shares of
 22,206,346. The Company recognized a net loss for the years ended December
 31, 2009 and 2008. Accordingly, basic and diluted loss per common share are
 the same as the effect of stock options is anti-dilutive to loss per share.
 In 2009, 2008 and 2007, 1,719,700, 1,767,200 and 1,162,500 common shares,
 respectively, issuable upon the exercise of options were not included in the
 computation of diluted income (loss) per share as the effect would have been
 anti-dilutive.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|[9]  | Revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | Commission revenues and fees earned on customer trades together with related clearing expenses are recorded on a trade-date basis.
Trading profits are also recorded on a trade-date basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | Investment
 banking revenue includes gains and fees, net of syndicate expenses, arising
 from underwriting syndicates in which the Company participates. Investment
 banking management fees are recorded on the offering date, sales concessions
 on the settlement date and underwriting fees at the time the underwriting is
 completed and the income is reasonably determinable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | Interest is recorded on an accrual basis and dividends are recorded on an ex-dividend date basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|[10] | Stock-Based Compensation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | Share-based payments to employees, including grants of
 employee stock options, are recognized in the statement of operations as an
 operating expense, based on their fair values on grant date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-7

---



NOTE A - ORGANIZATION AND
 SUMMARY OF SIGNIFICANT ACCOUNTING
 POLICIES (CONTINUED)

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Share-based compensation
 costs are recognized on a straight-line basis over the requisite service periods of awards
 which would normally be the vesting period of the options.Cash
 flows resulting from the tax benefits of the tax deduction in excess of the
 compensation cost recognized for these options are classified as financing
 cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|[11] | Intangibles:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | Purchased
 intangibles are principally being amortized using the straight-line method
 over estimated useful lives of three to five years (see Note E).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|[12] | Valuation of Long-Lived Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | The Company
 evaluates the recoverability of its long-lived assets and requires the
 recognition of impairment of long-lived assets in the event the net book
 value of these assets exceeds the estimated future undiscounted cash flows
 attributable to these assets. The Company assesses potential impairment to
 its long-lived assets when there is evidence that events or changes in
 circumstances have made recovery of the assets carrying value unlikely.
 Should impairment exist, the impairment loss would be measured based on the
 excess of the carrying value of the assets over the assets fair value.                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|[13] | New Accounting Standards:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | During the
 third quarter of 2009, the Financial Accounting Standards Boards (FASB)
 Accounting Standards Codification (Codification) became the single source
 of authoritative U.S. generally accepted accounting principles (GAAP). The
 Codification does not create any new GAAP standards, but incorporates
 existing accounting and reporting standards into a new topical structure. The
 Company adopted this Codification for its quarter ended September 30, 2009.
 Other than the manner in which new accounting guidance is referenced, the
 adoption of the Codification did not have any impact on the Companys
 financial statements.                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | In May 2009, the FASB issued new authoritative guidance
 which establishes general standards of accounting for and disclosure of
 events that occur after the balance sheet date, but before financial
 statements are issued. The guidance, as amended in February 2010, requires that subsequent events be evaluated through the date
the financial statements are issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | In April 2008, the FASB issued authoritative guidance which amended the factors that
 should be considered in developing renewal or extension assumptions used to determine the useful life of a
 recognized intangible asset for amortization purposes. The guidance is intended to improve the
 consistency between the useful life of a recognized intangible asset for amortization purposes and the
 period of expected cash flows used to measure the fair value of the asset under other U.S. GAAP. The
 guidance, which is effective for fiscal years beginning after December 15, 2008, was adopted by the
 Company effective January, 1, 2009. The guidance is to be applied prospectively to intangible assets
 acquired after the effective date and did not have any impact on the Companys financial statements.

F-8

---



NoteB - IntuitLawsuit

Siebert commenced a lawsuit
against Intuit, Inc. (Intuit) in 2003 seeking expenses and damages arising
from the Joint Brokerage Service conducted under the Strategic Alliance
Agreement between Siebert and Intuit. Intuit counterclaimed against Siebert for
expenses and damages. A Stipulation and Order of Dismissal with Prejudice
entered into by the parties was filed in October 2007, terminating the
litigation without any payments by either party. The parties also exchanged
general releases. As a result of the settlement, $2,024,000 of liabilities
recorded by Siebert for expenses prior to December 31, 2003, were reversed in
the fourth quarter of 2007. Such amount had previously been classified as revenue, however, in response to comments received from the SEC,
the amount has been reclassified as other income in the accompanying 2007 statement of operations.

NoteC - InvestmentInAffiliates

Investment in and advances
to, equity in income of, and distributions received from affiliates consist of
the following:

|                                     |  |     |           |        |   |         |   |   |           | 
|------------------------------------ |  | --- | --------- | ------ | - | ------- | - | - | --------- | 
|December
 31, 2009                   |  | SBS |           | SBSFPC |   | TOTAL   |  
|                                     |  |     |           |        |   |         |  
|                                     |  |     |           |        |   |         |   |   |           | 
|Investment and advances              |  | $   | 8,710,000 |        | $ | 330,000 |   | $ | 9,040,000 | 
|                                     |  |     |           |        |   |         |   |   |           | 
|Income (loss) from equity
 investees |  | $   | 4,287,000 |        | $ | (63,000 | ) | $ | 4,224,000 | 
|                                     |  |     |           |        |   |         |   |   |           | 
|Distributions                        |  | $   | 1,539,000 |        | $ |        |   | $ | 1,539,000 | 
|                                     |  |     |           |        |   |         |   |   |           | 

|                                     |  |     |           |        |   |          |   |   |           | 
|------------------------------------ |  | --- | --------- | ------ | - | -------- | - | - | --------- | 
|December
 31, 2008                   |  | SBS |           | SBSFPC |   | TOTAL    |  
|                                     |  |     |           |        |   |          |  
|                                     |  |     |           |        |   |          |   |   |           | 
|Investment and advances              |  | $   | 6,087,000 |        | $ | 393,000  |   | $ | 6,480,000 | 
|                                     |  |     |           |        |   |          |   |   |           | 
|Income (loss) from equity
 investees |  | $   | 2,134,000 |        | $ | (435,000 | ) | $ | 1,699,000 | 
|                                     |  |     |           |        |   |          |   |   |           | 
|Distributions                        |  | $   | 1,078,000 |        | $ | 21,000   |   | $ | 1,099,000 | 
|                                     |  |     |           |        |   |          |   |   |           | 

|                              |  |     |           |        |   |         |  |   |           | 
|----------------------------- |  | --- | --------- | ------ | - | ------- |  | - | --------- | 
|December
 31, 2007            |  | SBS |           | SBSFPC |   | TOTAL   | 
|                              |  |     |           |        |   |         | 
|                              |  |     |           |        |   |         |  |   |           | 
|Income from equity
 investees |  | $   | 1,391,000 |        | $ | 41,000  |  | $ | 1,432,000 | 
|                              |  |     |           |        |   |         |  |   |           | 
|Distributions                 |  | $   | 1,780,000 |        | $ | 648,000 |  | $ | 2,428,000 | 
|                              |  |     |           |        |   |         |  |   |           | 

Siebert and two individuals
(the Principals) formed SBS to succeed to the tax-exempt underwriting
business of the Siebert Brandford Shank division of Siebert. The agreements
with the Principals provide that profits will be shared 51% to the Principals
and 49% to Siebert.

Pursuant to the terms of the
Operating Agreement, Financial and each of the Principals own a 33.33% initial
interest in SBSFPC which engages in derivatives transactions related to the
municipal underwriting business. The Operating Agreement provides that
income/(loss) be shared 66.66% by the Principals and 33.33% by Financial.

F-9

---



Summarized financial data of
SBS is as follows:

|                                                                                              |  |      |            |      |   |            |  |   |            | 
|--------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                                                              |  | 2009 |            | 2008 |   | 2007       | 
|                                                                                              |  |      |            |      |   |            | 
|                                                                                              |  |      |            |      |   |            |  |   |            | 
|Total assets, including secured demand note of 1,200,000 in each year
 due from Siebert       |  | $    | 36,018,000 |      | $ | 21,508,000 |  |   |            | 
|Total liabilities, including subordinated liabilities $1,200,000 in
 each year due to Siebert |  |      | 18,355,000 |      |   | 9,453,000  |  |   |            | 
|Total members capital                                                                        |  |      | 17,663,000 |      |   | 12,055,000 |  |   |            | 
|Regulatory minimum net capital requirement                                                    |  |      | 1,111,000  |      |   | 550,000    |  |   |            | 
|Total revenue                                                                                 |  |      | 45,391,000 |      |   | 31,562,000 |  | $ | 24,426,000 | 
|Net income                                                                                    |  |      | 8,749,000  |      |   | 4,354,000  |  |   | 2,840,000  | 

During 2009, 2008 and 2007,
Siebert charged SBS $75,000, $103,000 and $240,000, respectively for general
and administrative services, which Siebert believes approximates the cost of
furnishing such services. In addition, during each of the years 2009, 2008 and
2007, Siebert earned interest income of $48,000, $64,000 and $96,000,
respectively from SBS in connection with Sieberts obligation to make a
subordinated loan for up to $1,200,000 available to SBS and Siebert paid SBS
interest earned on the restricted cash equivalents of $10,000, $46,000 and
$74,000 (see Note I).

Sieberts share of
undistributed earnings from SBS amounts to $8,263,000 and $5,515,000 at
December 31, 2009 and 2008, 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 net capital
requirements.

Summarized financial data of SBSFPC is as follows:

| |                        |  |      |             |      |   |             |    |   |         | 
| | ---------------------- |  | ---- | ----------- | ---- | - | ----------- | -- | - | ------- | 
| |                        |  | 2009 |             | 2008 |   | 2007        |   
| |                        |  |      |             |      |   |             |   
| |                        |  |      |             |      |   |             |    |   |         | 
| | Total assets           |  | $    | 134,144,000 |      | $ | 244,951,000 |    |   |         | 
| | Total liabilities      |  |      | 133,154,000 |      |   | 243,773,000 |    |   |         | 
| | Total members capital |  |      | 990,000     |      |   | 1,178,000   |    |   |         | 
| | Total revenue          |  |      | 23,000      |      |   | (1,008,000  | )* | $ | 680,000 | 
| | Net (loss) income      |  |      | (188,000    | )    |   | (1,305,000  | )  |   | 123,000 | 

* Attributable to unrealized
loss on derivative contracts.

At December 31, 2009 and
2008, SBSFPC had an accumulated loss of $210,000 and $21,000, respectively of
which Sieberts share was $70,000 and $7,000, respectively.

F-10

---



NoteD - Furniture, EquipmentAndLeaseholdImprovements, Net

Furniture, equipment and
leasehold improvements consist of the following:

|                                                |  |              |           |      |   |           |  
|----------------------------------------------- |  | ------------ | --------- | ---- | - | --------- | -
|                                                |  | December 31, |          
|                                                |  |              |          
|                                                |  | 2009         |           | 2008 |  
|                                                |  |              |           |      |  
|                                                |  |              |           |      |   |           |  
|Equipment                                       |  | $            | 2,450,000 |      | $ | 2,039,000 |  
|Leasehold improvements                          |  |              | 62,000    |      |   | 123,000   |  
|Furniture and fixtures                          |  |              | 34,000    |      |   | 39,000    |  
|                                                |  |              |           |      |   |           |  
|                                                |  |              |           |      |   |           |  
|                                                |  |              | 2,546,000 |      |   | 2,201,000 |  
|Less accumulated
 depreciation and amortization |  |              | (977,000  | )    |   | (720,000  | )
|                                                |  |              |           |      |   |           |  
|                                                |  |              |           |      |   |           |  
|                                                |  | $            | 1,569,000 |      | $ | 1,481,000 |  
|                                                |  |              |           |      |   |           |  

Depreciation and amortization
expense for the years ended December 31, 2009, 2008 and 2007 amounted to
$457,000, $383,000 and $379,000, respectively.

NoteE - IntangibleAssets

WFN acquired the stock of WFN Womens
Financial Network, Inc. (WFNI) and HerDollar.com, Inc., respectively, companies
in the development stage which had yet to commence principal operations, had no
significant revenue and had assets consisting principally of websites, content
and domain names, for aggregate consideration of $2,310,000 including costs.
The transactions have been accounted for as purchases of assets consisting of
domain name, website and content, and a non-compete agreement (the Acquired
Intangible Assets). Related deferred tax assets attributable to net operating
loss carryforwards of the acquired companies and deferred tax liabilities
attributable to the excess of the statement bases of the acquired assets over
their tax bases have been reflected in the accompanying consolidated financial
statements as an adjustment to the carrying amount of such intangibles (see
Note F).

Intangible assets consist of the following:

|                                   |  |                           |           |                            |   |                           |  |                            |           |  |   |           | 
|---------------------------------- |  | ------------------------- | --------- | -------------------------- | - | ------------------------- |  | -------------------------- | --------- |  | - | --------- | 
|                                   |  | December 31, 2009         |           | December 31, 2008          |  
|                                   |  |                           |           |                            |  
|                                   |  | Gross 
 Carrying 
 Amount |           | Accumulated 
 Amortization |   | Gross 
 Carrying 
 Amount |  | Amortization 
 Accumulated |          
|                                   |  |                           |           |                            |   |                           |  |                            |          
|Amortizable assets:                |  |                           |           |                            |   |                           |  |                            |           |  |   |           | 
|Website, content and
 non-compete  |  | $                         | 1,850,000 |                            | $ | 1,850,000                 |  | $                          | 2,350,000 |  | $ | 2,350,000 | 
|Retail brokerage accounts          |  |                           | 2,588,000 |                            |   | 2,588,000                 |  |                            | 2,588,000 |  |   | 2,563,000 | 
|                                   |  |                           |           |                            |   |                           |  |                            |           |  |   |           | 
|                                   |  |                           |           |                            |   |                           |  |                            |           |  |   |           | 
|                                   |  | $                         | 4,438,000 |                            | $ | 4,438,000                 |  | $                          | 4,938,000 |  | $ | 4,913,000 | 
|                                   |  |                           |           |                            |   |                           |  |                            |           |  |   |           | 
|Unamortized intangible
 assets:    |  |                           |           |                            |   |                           |  |                            |           |  |   |           | 
|Domain name/intellectual
 property |  | $                         | 750,000   |                            |   |                           |  | $                          | 750,000   |  |   |           | 
|                                   |  |                           |           |                            |   |                           |  |                            |           |  |   |           | 
|                                   |  |                           |           |                            |   |                           |  |                            |           |  |   |           | 
|Amortization expense               |  |                           |           |                            | $ | 25,000                    |  |                            |           |  | $ | 96,000    | 
|                                   |  |                           |           |                            |   |                           |  |                            |           |  |   |           | 

The cost of fully amortized intangible assets will be written off against
accumulated amortization when the assets are no longer being utilized. During 2009, $500,000 related to the convenant not to compete has been
written off against accumulated amortization.

F-11

---



Note F - Income Taxes

The Company files a consolidated federal income tax return with its subsidiaries.

Income tax (benefit) expense
provision consists of the following:

|                                         |  |                         |            |      |   |            |   |   |           |  
|---------------------------------------- |  | ----------------------- | ---------- | ---- | - | ---------- | - | - | --------- | -
|                                         |  | Year Ended December 31, |           
|                                         |  |                         |           
|                                         |  | 2009                    |            | 2008 |   | 2007       |  
|                                         |  |                         |            |      |   |            |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|Federal
 income tax (benefit) provision: |  |                         |            |      |   |            |   |   |           |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|Current                                  |  | $                       | (656,000   | )    | $ | (787,000   | ) | $ | 1,356,000 |  
|Deferred                                 |  |                         | 85,000     |      |   |           |   |   | (32,000   | )
|                                         |  |                         |            |      |   |            |   |   |           |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|                                         |  |                         | (571,000   | )    |   | (787,000   | ) |   | 1,324,000 |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|State and
 local:                        |  |                         |            |      |   |            |   |   |           |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|Current                                  |  |                         | (486,000   | )    |   | 37,000     |   |   | 456,000   |  
|Deferred                                 |  |                         | (260,000   | )    |   | (281,000   | ) |   | (7,000    | )
|                                         |  |                         |            |      |   |            |   |   |           |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|                                         |  |                         | (746,000   | )    |   | (244,000   | ) |   | 449,000   |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|Total:                                   |  |                         |            |      |   |            |   |   |           |  
|Current                                  |  |                         | (1,142,000 | )    |   | (750,000   | ) |   | 1,812,000 |  
|Deferred                                 |  |                         | (175,000   | )    |   | (281,000   | ) |   | (39,000   | )
|                                         |  |                         |            |      |   |            |   |   |           |  
|                                         |  |                         |            |      |   |            |   |   |           |  
|                                         |  | $                       | (1,317,000 | )    | $ | (1,031,000 | ) | $ | 1,773,000 |  
|                                         |  |                         |            |      |   |            |   |   |           |  

A
reconciliation between the income tax (benefit) expense and income taxes computed by
applying the statutory Federal income tax rate to (loss) income before taxes is as
follows:

|                                                                             |  |                         |            |      |   |             |   |   |           | 
|---------------------------------------------------------------------------- |  | ----------------------- | ---------- | ---- | - | ----------- | - | - | --------- | 
|                                                                             |  | Year Ended December 31, |           
|                                                                             |  |                         |           
|                                                                             |  | 2009                    |            | 2008 |   | 2007        |  
|                                                                             |  |                         |            |      |   |             |  
|                                                                             |  |                         |            |      |   |             |   |   |           | 
|Expected
 income tax (benefit) provision at statutory Federal tax rate (34%) |  | $                       | (850,000   | )    | $ | (949,000    | ) | $ | 1,370,000 | 
|State and
 local taxes, net of Federal tax effect                            |  |                         | (163,000   | )    |   | (160,000    | ) |   | 296,000   | 
|Reversal of
 overaccrual of prior years taxes                               |  |                         | (330,000   | )    |   |             |   |   |           | 
|Permanent
 difference                                                        |  |                         | 51,000     |      |   | 40,000      |   |   | 72,000    | 
|Other                                                                        |  |                         | (25,000    | )    |   | 38,000      |   |   | 35,000    | 
|                                                                             |  |                         |            |      |   |             |   |   |           | 
|                                                                             |  |                         |            |      |   |             |   |   |           | 
|Income tax
 (benefit) expense                                                |  | $                       | (1,317,000 | )    | $ | (1,031,0000 | ) | $ | 1,773,000 | 
|                                                                             |  |                         |            |      |   |             |   |   |           | 

Deferred
income taxes reflect the impact of temporary differences between the amounts of
assets and liabilities for financial reporting purposes and their tax basis.
The principal items giving rise to deferred tax assets (liabilities) are as
follows:

|                                                 |  |              |           |      |   |           |  
|------------------------------------------------ |  | ------------ | --------- | ---- | - | --------- | -
|                                                 |  | December 31, |          
|                                                 |  |              |          
|                                                 |  | 2009         |           | 2008 |  
|                                                 |  |              |           |      |  
|                                                 |  |              |           |      |   |           |  
|Net
 operating loss carryforwards                |  | $            | 657,000   |      | $ | 600,000   |  
|Employee
 stock based compensation               |  |              | 234,000   |      |   | 237,000   |  
|Acquired
 intangible assets                      |  |              | (304,000  | )    |   | (308,000  | )
|Furniture,
 equipment and leasehold improvements |  |              | (142,000  | )    |   | (6,000    | )
|Retail
 brokerage accounts                       |  |              | 595,000   |      |   | 625,000   |  
|Contribution
 carryover                          |  |              | 55,000    |      |   |           |  
|Accrued compensation and other                   |  |              | 232,000   |      |   |           |  
|                                                 |  |              |           |      |   |           |  
|                                                 |  |              |           |      |   |           |  
|                                                 |  | $            | 1,323,000 |      | $ | 1,148,000 |  
|                                                 |  |              |           |      |   |           |  

F-12

---



Management
believes that it is more likely than not that the deferred tax asset will be
realized, and therefore no valuation allowance has been provided.

At December 31, 2009, the Company has state net operating loss carryforwards
aggregating $ 5.2 million which expire through 2029 in various states. In addition, the Company has federal net operating
loss carryforwards of $775,000 at December 31, 2009, which are attributable to
WFN and expire through 2020. Utilization of such federal net operating loss carryforwards
is subject to annual limitations under Section 382 of the Internal Revenue
Code.

In 2007, the
Company reduced current taxes payable by $2,000, resulting from
the deductibility of the difference between the exercise price of nonqualifying
stock options granted by the Company and the market value of the stock on the
dates of exercise. The tax benefit was recorded as a credit to additional
paid-in capital.

On January 1, 2007, the Company adopted authoritative guidance which
clarifies the criteria for recognizing tax benefits related to uncertain tax
positions taken or expected to be taken on a tax return. As required commencing at
the adoption date the Company applied the more-likely-than-not recognition
threshold to all tax positions which resulted in no unrecognized tax
benefits in the accompanying financial statements.

The Company
has elected to record interest and penalties recognized in the financial
statements as income taxes.

For federal and certain state and local jurisdictions, the
2006 through 2009 tax years remain open for examination by the taxing authorities.
For other states the 2005 through 2009 tax years remain open for examination.

Note G - Stockholders Equity

Siebert is
subject to the SEC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 2 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
5% of aggregate debits. At December 31, 2009 and 2008, Siebert had net capital
of approximately $21,148,000 and $25,574,000, respectively, as compared with
net capital requirements of $250,000. Siebert claims exemption from the reserve
requirement under Section 15c3-3(k)(2)(ii).

On January 23,
2008, the Board of Directors of the Company authorized a buy back of up to
300,000 shares of common stock. Shares will be purchased from time to time in
the open market and in private transactions. During 2009 we repurchased 16,790
shares of common stock for an average price of $1.99.

On June 9,
2008, the Board of Directors declared a dividend of ten cents per share on the
common stock of the Company, which was paid on June 30, 2008 to shareholders of
record at the close of business on June 23, 2008. The Chief Executive Officer
of the Company waived the right to receive the dividend in excess of the
aggregate amount paid to other shareholders which amounted to approximately
$234,000.

On June 4,
2007, the Board of Directors declared a dividend of twelve cents per share on
common stock of the Company, which was paid on June 29, 2007 to shareholders of
record at the close of business on June 20, 2007. The Chief Executive Officer
of the Company waived the right to receive the dividend in excess of the
aggregate amount paid to other shareholders which amounted to approximately
$280,000.

Note H - Options

The Companys
2007 Long-Term Incentive Plan (the Plan), authorizes the grant of options to
purchase up to an aggregate of 2,000,000 shares, subject to adjustment in
certain circumstances. Both non-qualified options and options intended to
qualify as Incentive Stock Options under Section 422 of the Internal Revenue
Code, may be granted under the Plan. A Stock Option Committee of the Board of
Directors administers the Plan. The committee has the authority to determine
when options are granted, the term during which an option may be exercised
(provided no option has a term exceeding 10 years), the exercise price and the
exercise period. The exercise price shall not be less than the fair market
value on the date of grant. No option may be granted under the Plan after
December 2017. Generally, employee options vest 20% per year for five years and
expire ten years from the date of grant. At December 31, 2009, options for
1,700,000 shares of common stock are available for grant under the Plan.

F-13

---



Note H  Options (Continued)

A summary of
the Companys stock option transactions for the three years ended December 31,
2009 is presented below:

|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|----------------------------------------------- | --- | ------ | --------- | ---------------------------------- | - | ------ |  | ---------------------------------- | --------- | ------ | - | ---------------------------------- |  |  | --------- | - | - | ---- | 
|                                                |     | 2009   |           | 2008                               |   | 2007   | 
|                                                |     |        |           |                                    |   |        | 
|                                                |     | Shares |           | Weighted
 Average
 Exercise
 Price |   | Shares |  | Weighted
 Average
 Exercise
 Price |           | Shares |   | Weighted
 Average
 Exercise
 Price | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|Outstanding - beginning of the year             |     |        | 1,767,200 |                                    | $ | 4.07   |  |                                    | 1,467,200 |        | $ | 4.28                               |  |  | 1,603,966 |   | $ | 4.16 | 
|Granted                                         |     |        |           |                                    |   |        |  |                                    | 300,000   |        | $ | 3.05                               |  |  |           |   |   |      | 
|Forfeited                                       |     |        | (47,500   | )                                  | $ | 6.91   |  |                                    |           |        |   |                                    |  |  | (126,966  | ) | $ | 4.36 | 
|Exercised                                       |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  | (9,800    | ) | $ | 2.70 | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|Outstanding - end of year                       | (a) |        | 1,719,700 |                                    | $ | 4.00   |  |                                    | 1,767,200 |        | $ | 4.07                               |  |  | 1,467,200 |   | $ | 4.28 | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|Fully vested and expected to vest at year
 end  | (a) |        | 1,709,700 |                                    | $ | 4.00   |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|Exercisable at end of year                      | (a) |        | 1,709,700 |                                    | $ | 4.00   |  |                                    | 1,742,200 |        | $ | 4.08                               |  |  | 1,422,200 |   | $ | 4.30 | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|                                                |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |      | 
|Weighted average fair value of options
 granted |     |        |           |                                    |   |        |  |                                    |           |        | $ | 0.53                               |  |  |           |   |   |      | 

|    |                                                                                               
|--- | ----------------------------------------------------------------------------------------------
|(a) | Weighted
 average remaining contractual terms of 3 years and aggregate intrinsic value
 of $0.

As of December
31, 2009, there was $15,000 of unrecognized compensation costs related to
unvested options which is expected to be recognized over a weighted-average
period of 2 years.

The fair value
of each option award is estimated on the date of grant using the Black-Sholes
option pricing model using the following weighted-average assumptions:

|                          |  |      |        |  
|------------------------- |  | ---- | ------ | -
|                          |  | 2008 |       
|                          |  |      |       
|Dividend
 yield           |  |      | 2.1    | %
|Expected
 volatility      |  |      | 104.69 | %
|Risk-free
 interest rate  |  |      | 3.18   | %
|Expected
 life (in years) |  |      | 4.1    |  

The weighted average expected life reflects the alternative simplified
method permitted under authoritative accounting guidance, which defines the
expected life as the average of the contractual term of the options and the
weighted-average vesting period for all option tranches. The expected
dividend yield is based on historical dividends. The risk-free interest rate is
based on the annual yield on the measurement date of a  ten year Unites States
Treasury Bond, the maturity of which equals the options expected life. Expected volatility is based
on historical volatility over a period commensurate with the options expected life. There were
no options granted during 2009 and 2007.

F-14

---



NOTEI - COMMITMENTS, CONTINGENCIESANDOTHER

Retail customer transactions are cleared through clearing brokers
on a fully disclosed basis. If customers do not fulfill their contractual
obligations, the clearing broker may charge Siebert for any loss incurred in
connection with the purchase or sale of securities at prevailing market prices
to satisfy the customer obligations. Siebert regularly monitors the activity in
its customer accounts for compliance with its margin requirements. Siebert is
exposed to the risk of loss on unsettled customer transactions if customers
are unable to fulfill their contractual obligations. There were no material losses
for unsettled customer transactions in 2009, 2008 or 2007.

Siebert terminated a
clearing agreement with Pershing LLC (Pershing) in 2003. Based on
consultation with counsel, Siebert believes that $1,500,000 that it advanced to
Pershing in January 2003 should have been returned. Pershing expressed its
belief that it was 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 received a release for the $3 million
related to disputed claims for unreimbursed fees and costs. In 2004, Siebert
decided not to commence proceedings against Pershing and charged off the
$1,500,000 advance to Pershing. The statute of limitations with respect to any
contract claims by either party expired in July 2009.

Siebert is party to certain claims, suits and complaints arising in the
ordinary course of business. In the opinion of management, all such claims,
suits and complaints are without merit, or involve amounts which would not have
a significant effect on the financial position or results of operations of the Company.

The Company rents discount
retail brokerage and other office space under long-term operating leases
expiring in various periods through 2012. These leases call for base rent plus
escalations for taxes and operating expenses.

Future minimum base rental
payments under these operating leases are as follows:

|                           |  |        |           | 
|-------------------------- |  | ------ | --------- | 
|Year Ending 
 December 31, |  | Amount |          
|                           |  |        |          
|                          
|2010                       |  |        | 925,000   | 
|2011                       |  |        | 392,000   | 
|2012                       |  |        | 178,000   | 
|                           |  |        |           | 
|                           |  |        |           | 
|                           |  | $      | 1,495,000 | 
|                           |  |        |           | 

Rent expense, including
escalations for operating costs, amounted to approximately $1,279,000,
$1,319,000 and $1,314,000 for the years ended December 31, 2009, 2008 and 2007,
respectively. Rent is being charged to expense over the entire lease term on a
straight-line basis.

Siebert sponsors a defined
contribution retirement plan under Section 401(k) of the Internal Revenue Code
that covers substantially all employees. Participant contributions to the plan
are voluntary and are subject to certain limitations. Siebert may also make
discretionary contributions to the plan. No contributions were made by Siebert
in 2009, 2008 and 2007.

Siebert is party to a
Secured Demand Note Collateral Agreement with SBS which obligates Siebert to
lend SBS, on a subordinated basis, up to $1,200,000. The secured demand note
payable held by SBS and a related $1,200,000 receivable due from SBS are
included in investments in and advances to equity investees in the accompanying
consolidated statement of financial condition. Amounts that Siebert is
obligated to lend under this arrangement are collateralized by cash equivalents
of $1,532,000. Any amounts loaned will bear interest at 4% per annum and are repayable
on August 31, 2011.

F-15

---



NOTEJ  FAIRVALUEOFFINANCIALINSTRUMENTS

The carrying amounts
reflected in the consolidated statements of financial condition for cash, cash
equivalents, receivable from broker, accounts payable and accrued liabilities
approximate fair value due to the short term maturities of those instruments.
Securities owned are carried at fair value (see note A(2)).

NOTEK - SUMMARIZEDQUARTERLYFINANCIALDATA(UNAUDITED)

|                           |  |                |           |                 |   |                |  |                 |           |                |   |                 |   |                |           |                 |   |           |  |   |           |   |   |            |     
|-------------------------- |  | -------------- | --------- | --------------- | - | -------------- |  | --------------- | --------- | -------------- | - | --------------- | - | -------------- | --------- | --------------- | - | --------- |  | - | --------- | - | - | ---------- | ----
|                           |  | 2009           |           | 2008            |  
|                           |  |                |           |                 |  
|                           |  | First
 Quarter |           | Second
 Quarter |   | Third
 Quarter |  | Fourth
 Quarter |           | First
 Quarter |   | Second
 Quarter |   | Third
 Quarter |           | Fourth
 Quarter |  
|                           |  |                |           |                 |   |                |  |                 |           |                |   |                 |   |                |           |                 |  
|Revenue                    |  | $              | 7,000,000 |                 | $ | 7,274,000      |  | $               | 5,360,000 |                | $ | 5,756,000       |   | $              | 7,897,000 |                 | $ | 7,375,000 |  | $ | 7,165,000 |   | $ | 7,313,000  |     
|Net (loss) income          |  | $              | (332,000  | )               | $ | 564,000        |  | $               | (451,000  | )              | $ | (964,000        | ) | $              | (128,000  | )               | $ | 568,000   |  | $ | (931,000  | ) | $ | (1,269,000 | )(a)
|Earnings (loss) per share: |  |                |           |                 |   |                |  |                 |           |                |   |                 |   |                |           |                 |   |           |  |   |           |   |   |            |     
|Basic                      |  | $              | (0.01     | )               | $ | 0.03           |  | $               | (0.02     | )              | $ | (0.05           | ) | $              | (0.01     | )               | $ | 0.03      |  | $ | (0.04     | ) | $ | (0.06      | )   
|Diluted                    |  | $              | (0.01     | )               | $ | 0.03           |  | $               | (0.02     | )              | $ | (0.05           | ) | $              | (0.01     | )               | $ | 0.03      |  | $ | (0.04     | ) | $ | (0.06      | )   

|    |                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------
|(a) | Includes $422,000 loss in
 the fourth quarter relating to the equity in losses of SBSFPC (see Note C).

F-16

---



REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

Board of Managers
Siebert, Brandford, Shank & Co., L.L.C.
New York, New York

We have audited the accompanying
statements of financial condition of Siebert, Brandford, Shank & Co.,
L.L.C. as of December 31, 2009 and 2008, and the related statements of
operations, changes in members capital, changes in subordinated borrowings and
cash flows for each of the years in the three-year period ended December 31,
2009. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the
financial statements referred to above present fairly, in all material
respects, the financial position of Siebert, Brandford, Shank & Co., L.L.C.
as of December 31, 2009 and 2008, and the results of its operations  and its cash flows for
each of the years in the three-year period ended December 31, 2009 in
conformity with accounting principles generally accepted in the United States
of America.

/s/ Eisner LLP

New York, New York
February 25, 2010

F-17

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Statements of
Financial Condition

|                                                      |  |              |            |      |   |            | 
|----------------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | 
|                                                      |  | December 31, |           
|                                                      |  |              |           
|                                                      |  | 2009         |            | 2008 |  
|                                                      |  |              |            |      |  
|                                                      |  |              |            |      |   |            | 
|ASSETS                                                |  |              |            |      |   |            | 
|Cash and cash equivalents                             |  | $            | 28,196,681 |      | $ | 14,129,576 | 
|Accounts receivable                                   |  |              | 2,336,532  |      |   | 1,415,585  | 
|Securities owned, at fair value                       |  |              |           |      |   | 161,873    | 
|Receivable from broker                                |  |              | 1,443,290  |      |   | 3,767,798  | 
|Receivable from affiliate                             |  |              | 25,286     |      |   | 32,212     | 
|Other receivable                                      |  |              | 491,441    |      |   |           | 
|Secured demand notes                                  |  |              | 1,200,000  |      |   | 1,200,000  | 
|Furniture, equipment and leasehold
 improvements, net |  |              | 1,274,347  |      |   | 199,250    | 
|Other assets                                          |  |              | 1,050,122  |      |   | 601,682    | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  | $            | 36,017,699 |      | $ | 21,507,976 | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|LIABILITIES AND MEMBERS CAPITAL                      |  |              |            |      |   |            | 
|Liabilities:                                          |  |              |            |      |   |            | 
|Payable to affiliate                                  |  | $            | 50,130     |      | $ | 154,746    | 
|Accounts payable and accrued expenses                 |  |              | 16,612,909 |      |   | 8,097,920  | 
|Deferred rent                                         |  |              | 491,441    |      |   |           | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              | 17,154,480 |      |   | 8,252,666  | 
|                                                      |  |              |            |      |   |            | 
|Subordinated debt                                     |  |              | 1,200,000  |      |   | 1,200,000  | 
|                                                      |  |              |            |      |   |            | 
|Members capital                                      |  |              | 17,663,219 |      |   | 12,055,310 | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  | $            | 36,017,699 |      | $ | 21,507,976 | 
|                                                      |  |              |            |      |   |            | 

See notes to financial statements

F-18

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Statements of
Operations

|                                   |  |              |            |      |   |            |  |   |            | 
|---------------------------------- |  | ------------ | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                   |  | December 31, |           
|                                   |  |              |           
|                                   |  | 2009         |            | 2008 |   | 2007       | 
|                                   |  |              |            |      |   |            | 
|Revenues:                          |  |              |            |      |   |            |  |   |            | 
|Investment banking                 |  | $            | 36,666,383 |      | $ | 20,880,695 |  | $ | 20,942,441 | 
|Trading profits                    |  |              | 8,672,233  |      |   | 10,405,400 |  |   | 2,896,590  | 
|Interest and other                 |  |              | 52,765     |      |   | 275,923    |  |   | 586,643    | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              | 45,391,381 |      |   | 31,562,018 |  |   | 24,425,674 | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|Expenses:                          |  |              |            |      |   |            |  |   |            | 
|Employee compensation and benefits |  |              | 30,660,150 |      |   | 22,223,182 |  |   | 16,208,308 | 
|Clearing fees                      |  |              | 235,091    |      |   | 373,241    |  |   | 552,552    | 
|Communications                     |  |              | 772,021    |      |   | 730,755    |  |   | 635,037    | 
|Occupancy                          |  |              | 757,778    |      |   | 708,035    |  |   | 661,172    | 
|Professional fees                  |  |              | 344,838    |      |   | 153,025    |  |   | 97,276     | 
|Interest - related party           |  |              | 48,000     |      |   | 64,000     |  |   | 96,000     | 
|State and local income tax         |  |              | 225,363    |      |   | 130,518    |  |   | 324,571    | 
|General and administrative         |  |              | 3,599,343  |      |   | 2,824,879  |  |   | 3,011,081  | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              | 36,642,584 |      |   | 27,207,635 |  |   | 21,585,997 | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|Net income                         |  | $            | 8,748,797  |      | $ | 4,354,383  |  | $ | 2,839,677  | 
|                                   |  |              |            |      |   |            |  |   |            | 

See notes to financial statements

F-19

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Statements of
Changes in Members Capital

|                            |  |   |            |  
|--------------------------- |  | - | ---------- | -
|Balance - January 1, 2007   |  | $ | 10,693,596 |  
|Distributions
 to members   |  |   | (3,632,804 | )
|Net income                  |  |   | 2,839,677  |  
|                            |  |   |            |  
|Balance  December 31, 2007 |  |   | 9,900,469  |  
|Distributions
 to members   |  |   | (2,199,542 | )
|Net income                  |  |   | 4,354,383  |  
|                            |  |   |            |  
|Balance  December 31, 2008 |  |   | 12,055,310 |  
|Distributions
 to members   |  |   | (3,140,888 | )
|Net income                  |  |   | 8,748,797  |  
|                            |  |   |            |  
|Balance - December 31, 2009 |  | $ | 17,663,219 |  

See notes to financial statements

F-20

---



SIEBERT,
BRANDFORD, SHANK & CO., L.L.C.

Statements of Changes in Subordinated
Borrowings

|                            |  |   |           | 
|--------------------------- |  | - | --------- | 
|Balance - January 1, 2007   |  | $ | 1,200,000 | 
|Borrowings                  |  |   |          | 
|Repayments                  |  |   |          | 
|                            |  |   |           | 
|Balance  December 31, 2007 |  |   | 1,200,000 | 
|Borrowings                  |  |   |          | 
|Repayments                  |  |   |          | 
|                            |  |   |           | 
|Balance  December 31, 2008 |  |   | 1,200,000 | 
|Borrowings                  |  |   |          | 
|Repayments                  |  |   |          | 
|                            |  |   |           | 
|Balance - December 31, 2009 |  | $ | 1,200,000 | 

See notes to financial statements

F-21

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Statements of
Cash Flows

|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|--------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | - | - | ---------- | -
|                                                                                                                |  | December 31, |           
|                                                                                                                |  |              |           
|                                                                                                                |  | 2009         |            | 2008 |   | 2007       |  
|                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|Cash flows from operating activities:                                                                           |  |              |            |      |   |            |   |   |            |  
|Net income                                                                                                      |  | $            | 8,748,797  |      | $ | 4,354,383  |   | $ | 2,839,677  |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|Adjustments to reconcile net income to net
 cash provided by operating activities:                              |  |              |            |      |   |            |   |   |            |  
|Depreciation and amortization                                                                                   |  |              | 99,962     |      |   | 77,935     |   |   | 76,358     |  
|Changes in:                                                                                                     |  |              |            |      |   |            |   |   |            |  
|Securities owned, at fair value                                                                                 |  |              | 161,873    |      |   | 18,998     |   |   | (180,871   | )
|Accounts receivable                                                                                             |  |              | (920,947   | )    |   | (1,033,716 | ) |   | (42,706    | )
|Receivable from broker                                                                                          |  |              | 2,324,508  |      |   | (61,363    | ) |   | 3,419,046  |  
|Payable to (receivable from) affiliate                                                                          |  |              | (97,690    | )    |   | (73,941    | ) |   | 88,589     |  
|Other assets                                                                                                    |  |              | (448,440   | )    |   | (33,835    | ) |   | (41,972    | )
|Accounts payable and accrued expenses                                                                           |  |              | 8,514,989  |      |   | 1,502,258  |   |   | (704,848   | )
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|Net cash provided by operating activities                                                                       |  |              | 18,383,052 |      |   | 4,750,719  |   |   | 5,453,273  |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|Cash flows from investing activities:                                                                           |  |              |            |      |   |            |   |   |            |  
|Purchase of leasehold improvements and equipment                                                                |  |              | (1,175,059 | )    |   | (72,995    | ) |   | (85,803    | )
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|Cash flows from financing activities:                                                                           |  |              |            |      |   |            |   |   |            |  
|Distributions to members                                                                                        |  |              | (3,140,888 | )    |   | (2,199,542 | ) |   | (3,632,804 | )
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|Net increase in cash and cash
 equivalents                                                                      |  |              | 14,067,105 |      |   | 2,478,182  |   |   | 1,734,666  |  
|Cash and cash equivalents - beginning of
 year                                                                  |  |              | 14,129,576 |      |   | 11,651,394 |   |   | 9,916,728  |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|Cash and cash equivalents - end of year                                                                         |  | $            | 28,196,681 |      | $ | 14,129,576 |   | $ | 11,651,394 |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|Supplemental disclosures of cash flow
 information:                                                             |  |              |            |      |   |            |   |   |            |  
|Taxes paid                                                                                                      |  | $            |           |      | $ | 130,000    |   | $ | 304,570    |  
|Interest paid                                                                                                   |  | $            | 48,000     |      | $ | 64,000     |   | $ | 96,000     |  
|                                                                                                                |  |              |            |      |   |            |   |   |            |  
|Non-cash investing activity                                                                                     |  |              |            |      |   |            |   |   |            |  
|Receivable from landlord for reimbursement
 of leasehold improvements and corresponding deferred rent liability |  | $            | 491,441    |      |   |            |   |   |            |  

See notes to financial statements

F-22

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Notes to
Financial Statements
December 31, 2009, 2008 and 2007

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] | Organization:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Siebert,
 Brandford, Shank & Co., L.L.C. (SBS or the Company) engages in the
 business of tax-exempt underwriting and related trading activities. The
 Company qualifies as a Minority and Women Owned Business Enterprise in
 certain municipalities.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[2] | Use of estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The
 preparation of financial statements in conformity with accounting principles
 generally accepted in the United States of America requires management to
 make estimates and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent assets and liabilities at the date
 of the financial statements and the reported amounts of revenues and expenses
 during the reporting period. Actual results could differ from those
 estimates.                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[3] | Investments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Securities owned are valued at fair value. The resulting realized and unrealized gains
 and losses are reflected as trading profits.                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Authoritative
 accounting guidance defines fair value, establishes a framework for measuring
 fair value and establishes a fair value hierarchy. Fair value is the price
 that would be received to sell an asset or paid to transfer a liability in an
 orderly transaction between market participants at the measurement date. Fair
 value measurements are not adjusted for transaction costs. The fair value
 hierarchy prioritizes inputs to valuation techniques used to measure fair
 value into three levels:
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                        
|    | Level 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Unadjusted
 quoted prices in active markets for identical assets or liabilities.                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                        
|    | Level 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Inputs other
 than quoted market prices that are observable, either directly or indirectly,
 and reasonably available.                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                        
|    | Level 3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Unobservable
 inputs reflect the assumptions that the managing members develops based on
 available information about the assumptions market participants would use in
 valuing the asset or liability.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company
 held municipal bonds with a fair value of $161,863 at December 31, 2008 and
 did not hold positions at December 31, 2009. The bonds, which are classified
 as level 2, were valued at prices obtained from pricing sources, which derive
 values from observable inputs.                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[4] | Furniture, equipment and leasehold improvements, net:                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Furniture,
 equipment and leasehold improvements are stated at cost, net of accumulated
 depreciation and amortization. Depreciation is calculated using the
 straight-line method over the estimated useful lives of the assets, generally
 five years. Leasehold improvements are amortized over the period of the
 lease.                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[5] | Cash equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | For purposes
 of reporting cash flows, cash equivalents include money market funds which
 amounted to $28,182,006 and $13,878,527 at December 31, 2009 and 2008,
 respectively.                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[6] | Revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Investment
 banking revenues include gains and fees, net of syndicate expenses, arising
 primarily from municipal bond offerings in which the Company acts as an
 underwriter or agent. Investment banking management fees are recorded on the
 offering date, sales concessions on the settlement date, and underwriting
 fees at the time the underwriting is completed and the income is reasonably
 determinable.                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Trading profits are recorded on a trade date basis.Dividends are recorded on the ex-dividend date and interest income
 is recognized on an accrual basis.                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[7] | Income taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company
 is not subject to federal income taxes. Instead, the members are required to
 include in their income tax returns their respective share of the Companys
 income. The Company is subject to tax in certain state and local
 jurisdictions. Deferred taxes are not significant.                                                                                                                                                                                                                          

F-23

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Notes to Financial Statements
December 31, 2009, 2008 and 2007

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

|    |                               
|--- | ------------------------------
|[8] | New accounting pronouncements:

During the
third quarter of 2009, the Financial Accounting Standards Boards (FASB)
Accounting Standards Codification (Codification) became the single source of
authoritative U.S. generally accepted accounting principles (GAAP). The
Codification does not create any new GAAP standards, but incorporates existing
accounting and reporting standards into a new topical structure. The Company
has adopted this Codification as of December 31, 2009. Other than the manner in
which new accounting guidance is referenced, the adoption of the Codification
did not have any impact on the Companys financial statements.

In May 2009,
the FASB issued new authoritative guidance which establishes general standards
of accounting for and disclosure of events that occur after the balance sheet
date, but before financial statements are issued or are available to be issued.
The guidance requires the disclosure of the date through which an entity has
evaluated subsequent events and the basis for that date. The Company adopted
the provisions of the guidance and has evaluated subsequent events through
February 25, 2010, the date the financial statements were issued.

NOTE B - SUBORDINATED BORROWINGS AND SECURED DEMAND NOTE RECEIVABLE

The
subordinated debt at December 31, 2009 and 2008 consists of a Secured Demand Note
Collateral Agreement payable to Muriel Siebert & Co. Inc. (Siebert), a
member of the Company, in the amount of $1,200,000, bearing 4% interest and due August
31, 2011. Interest expense paid to Siebert for each of the years ended 2009, 2008, and
2007 amounts to $48,000, $64,000 and $96,000, respectively.

The
subordinated borrowings are available in computing net capital under the
Securities and Exchange Commissions (SEC) Uniform Net Capital Rule. To the
extent that such borrowing is required for the Companys continued compliance
with minimum net capital requirements, it may not be repaid.

The secured
demand note receivable of $1,200,000 is collateralized by cash equivalents of
Siebert of approximately $1,500,000 at December 31, 2009 and $1,300,000 at
December 31, 2008. Interest earned on the collateral paid by Siebert to SBS amounted to approximately
$10,000, $46,000 and $74,000 in 2009, 2008 and 2007, respectively.

NOTE C - FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

Furniture, equipment and leasehold improvements consist of the following:

|                                                |  |               |           |      |   |          |  
|----------------------------------------------- |  | ------------- | --------- | ---- | - | -------- | -
|                                                |  | December
 31, |          
|                                                |  |               |          
|                                                |  | 2009          |           | 2008 |  
|                                                |  |               |           |      |  
|Equipment                                       |  | $             | 675,406   |      | $ | 556,174  |  
|Furniture
 and leasehold improvements           |  |               | 1,323,471 |      |   | 201,908  |  
|                                                |  |               |           |      |   |          |  
|                                                |  |               |           |      |   |          |  
|                                                |  |               | 1,998,877 |      |   | 758,082  |  
|Less
 accumulated depreciation and amortization |  |               | (724,530  | )    |   | (558,832 | )
|                                                |  |               |           |      |   |          |  
|                                                |  | $             | 1,274,347 |      | $ | 199,250  |  
|                                                |  |               |           |      |   |          |  

F-24

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Notes to Financial Statements
December 31, 2009, 2008 and 2007

NOTE D - NET CAPITAL

The Company is
subject to the SECs Uniform Net Capital Rule 15c3-1, which requires the
maintenance of minimum net capital and that the ratio of aggregate indebtedness
to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2009
and 2008, the Company had net capital of $15,307,604 and $12,075,530,
respectively, which was $14,196,735 and $11,525,353, respectively, in excess of
its required net capital and its ratio of aggregate indebtedness to net capital
was 1.09 and .68 to 1, respectively. The Company claims exemption from the reserve
requirements under Section 15c-3-3(k)(2)(ii).

NOTE E - COMMITMENTSAND CONTINGENCY

The Company
rents office space under long-term operating leases expiring through 2020.
These leases call for base rent plus escalations for taxes and operating
expenses. Future minimum base rent under these operating leases are as follows:

|           |  |        |           |  | 
|---------- |  | ------ | --------- |  | 
|Year       |  | Amount |          
|           |  |        |           | 
|          
|2010       |  | $      | 794,000   | 
|2011       |  |        | 816,000   | 
|2012       |  |        | 785,000   | 
|2013       |  |        | 681,000   | 
|2014       |  |        | 548,000   | 
|Thereafter |  |        | 2,587,000 | 
|           |  |        |           | 
|           |  |        |           | 
|           |  | $      | 6,211,000 | 
|           |  |        |           | 

Rent expense
including taxes and operating expenses for 2009, 2008 and 2007 amounted to
$757,778, $708,035 and $661,172, respectively.

In November
2009, the Companys existing New York City lease expired and a new lease was
entered into with the landlord to occupy a different floor in the same premises
through 2020. The aggregate rental commitment related to the new lease amounted
to approximately $4,465,000 at December 31, 2009.

The Company
purchased leasehold improvements of approximately $817,000 in the year ended
December 31, 2009 in connection with such lease and the landlord agreed to
reimburse the Company $491,441 for a portion of such improvements. At December
31, 2009, the Company recorded a receivable from the landlord of $491,441 with
a corresponding credit to deferred rent liability. Such amount will be
recognized as a reduction of rental expense on a straight-line basis over the
term of the lease.

NOTE F - ACCOUNTS PAYABLEAND
ACCRUED EXPENSES

Accounts
payable and accrued expenses consist of the following:

|                                               |  |              |            |      |   |           | 
|---------------------------------------------- |  | ------------ | ---------- | ---- | - | --------- | 
|                                               |  | December 31, |           
|                                               |  |              |           
|                                               |  | 2009         |            | 2008 |  
|                                               |  |              |            |      |   |           | 
|                                               |  |              |            |      |   |           | 
|Accounts payable                               |  | $            | 1,360,512  |      | $ |          | 
|Accrued
 bonus and other employee compensation |  |              | 14,800,638 |      |   | 7,447,138 | 
|Other
 accrued expenses                        |  |              | 451,759    |      |   | 650,782   | 
|                                               |  |              |            |      |   |           | 
|                                               |  |              |            |      |   |           | 
|                                               |  | $            | 16,612,909 |      | $ | 8,097,920 | 
|                                               |  |              |            |      |   |           | 

NOTE G - OTHER

During 2009,
2008 and 2007, the Company was charged $75,000, $102,500 and $240,000 by
Siebert for general and administrative services.

F-25

---



SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant 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    
| |       | Chair and
 President  
|
| | Date: | March 31,
 2010       

Pursuant to
the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|                          |  |                                                  |  |                
|------------------------- |  | ------------------------------------------------ |  | ---------------
|Name                      |  | Title                                            |  | Date           
|                          |  |                                                  |  |                
|/s/ Muriel
 F. Siebert    |  | Chair,
 President and Director                   |  | March 31,
 2010
|                          |  |                                                  |  |                
|Muriel F. Siebert         |  | (principal
 executive officer)                   |  |                
|                          |  |                                                  |  |                
|/s/ Jeanne
 Rosendale     |  | Executive
 Vice President, and General Counsel   |  | March 31,
 2010
|                          |  |                                                  |  |                
|Jeanne
 Rosendale         |  |                                                  |  |                
|                          |  |                                                  |  |                
|/s/ Joseph
 M. Ramos, Jr. |  | Chief
 Financial Officer and Assistant Secretary |  | March 31,
 2010
|                          |  |                                                  |  |                
|Joseph M.
 Ramos, Jr.     |  | (principal
 financial and accounting officer)    |  |                
|                          |  |                                                  |  |                
|/s/ Patricia
 L. Francy   |  | Director                                         |  | March 31,
 2010
|                          |  |                                                  |  |                
|Patricia L.
 Francy       |  |                                                  |  |                
|                          |  |                                                  |  |                
|/s/ Leonard
 M. Leiman    |  | Director                                         |  | March 31,
 2010
|                          |  |                                                  |  |                
|Leonard M.
 Leiman        |  |                                                  |  |                
|                          |  |                                                  |  |                
|/s/ Jane H.
 Macon        |  | Director                                         |  | March 31,
 2010
|                          |  |                                                  |  |                
|Jane H.
 Macon            |  |                                                  |  |                
|                          |  |                                                  |  |                
|/s/ Robert
 P. Mazzarella |  | Director                                         |  | March 31,
 2010
|                          |  |                                                  |  |                
|Robert P.
 Mazzarella     |  |                                                  |  |                
|                          |  |                                                  |  |                
|/s/ Nancy
 Peterson Hearn |  | Director                                         |  | March 31,
 2010
|                          |  |                                                  |  |                
|Nancy
 Peterson Hearn     |  |                                                  |  |                

---



EXHIBIT INDEX

|             |  |                                                                                                                                                                                                                                                                                            
|------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
 No. |  | Description
 Of Document                                                                                                                                                                                                                                                                   
|             |  |                                                                                                                                                                                                                                                                                            
|2.1          |  | Plan and
 Agreement of Merger between J. Michaels, Inc. (JMI) and Muriel Siebert
 Capital Markets Group, Inc. (MSCMG), dated as of April 24, 1996 (Merger
 Agreement) (incorporated by reference to Siebert Financial Corp.s Form 10-K
 for the fiscal year ended December 31, 1996)
|             |  |                                                                                                                                                                                                                                                                                            
|2.2          |  | Amendment
 No. 1 to Merger Agreement, dated as of June 28, 1996 (incorporated by
 reference to Siebert Financial Corp.s Form 10-K for the fiscal year ended
 December 31, 1996)                                                                                                           
|             |  |                                                                                                                                                                                                                                                                                            
|2.3          |  | Amendment
 No. 2 to Merger Agreement, dated as of September 30, 1996 (incorporated by
 reference to Siebert Financial Corp.s Form 10-K for the fiscal year ended
 December 31, 1996)                                                                                                      
|             |  |                                                                                                                                                                                                                                                                                            
|2.4          |  | Amendment
 No. 3 to Merger Agreement, dated as of November 7, 1996 (incorporated by
 reference to Siebert Financial Corp.s Form 10-K for the fiscal year ended
 December 31, 1996)                                                                                                        
|             |  |                                                                                                                                                                                                                                                                                            
|3.1          |  | Certificate
 of Incorporation of Siebert Financial Corp., formerly known as J. Michaels,
 Inc. originally filed on April 9, 1934, as amended and restated to date
 (incorporated by reference to Siebert Financial Corp.s Form 10-K for the
 fiscal year ended December 31, 1997)         
|             |  |                                                                                                                                                                                                                                                                                            
|3.2          |  | By-laws of
 Siebert Financial Corp. (incorporated by reference to Siebert Financial
 Corp.s Registration Statement on Form S- 1 (File No. 333-49843) filed with
 the Securities and Exchange Commission on April 10, 1998)                                                                
|             |  |                                                                                                                                                                                                                                                                                            
|10.1         |  | Siebert
 Financial Corp. 1998 Restricted Stock Award Plan (incorporated by reference
 to Siebert Financial Corp.s Form 10-K for the fiscal year ended December 31,
 1997)                                                                                                                 
|             |  |                                                                                                                                                                                                                                                                                            
|10.2         |  | 10(a)
 Siebert Financial Corp. 1997 Stock Option Plan (incorporated by reference to
 Siebert Financial Corp.s Form 10-K for the fiscal year ended December 31,
 1996)                                                                                                                     
|             |  |                                                                                                                                                                                                                                                                                            
|10.3         |  | LLC Operating
 Agreement, among Siebert, Brandford, Shank & Co., LLC, Muriel Siebert
 & Co., Inc., Napoleon Brandford III and Suzanne F. Shank, dated as of
 March 10, 1997 (incorporated by reference to Siebert Financial Corp.s Form
 10-K for the fiscal year ended December 31, 1996)
|             |  |                                                                                                                                                                                                                                                                                            
|10.4         |  | Services
 Agreement, between Siebert, Brandford, Shank & Co., LLC and Muriel
 Siebert & Co., Inc., dated as of March 10, 1997 (incorporated by
 reference to Siebert Financial Corp.s Form 10-K for the fiscal year ended
 December 31, 1996)                                             

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|             |  |                                                                                                                                                                                                                                                                                                                                             
|------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
 No. |  | Description
 Of Document                                                                                                                                                                                                                                                                                                                    
|             |  |                                                                                                                                                                                                                                                                                                                                             
|10.5         |  | Operating
 Agreement of SBS Financial Products Company, LLC, dated effective as of April
 19, 2005, by and among Siebert Financial Corp., Napoleon Brandford III and
 Suzanne Shank. (incorporated by reference to Siebert Financial Corp.s
 Current Report on Form 8-K filed with the Securities and Exchange Commission
 on May 17, 2005)
|             |  |                                                                                                                                                                                                                                                                                                                                             
|10.6         |  | Siebert
 Financial Corp. 2007 Long-Term Incentive Plan (incorporated by reference to
 Siebert Financial Corp.s Registration Statement on Form S-8 (File No.
 333-144680) filed with the Securities and Exchange Commission on July 18,
 2007)                                                                                              
|             |  |                                                                                                                                                                                                                                                                                                                                             
|21           |  | Subsidiaries
 of the registrant (incorporated by reference to Siebert Financial Corp.s
 Annual Report on Form 10-K for the year ended December 31, 2001)                                                                                                                                                                                   
|             |  |                                                                                                                                                                                                                                                                                                                                             
|23           |  | Consent of
 Independent Auditors                                                                                                                                                                                                                                                                                                            
|             |  |                                                                                                                                                                                                                                                                                                                                             
|31.1         |  | Certification
 of Muriel F. Siebert pursuant to Securities 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 Securities Exchange Act Rules 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                                                                                                                                                                                                                    

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