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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington,
D.C. 20549



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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, 2007

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



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Siebert Financial Corp.(Exact
name of registrant as specified in its charter)



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|                                         |                    
|---------------------------------------- | -------------------
|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



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Securities registered under Section 12(b) of the Exchange Act:

|                     |                                           
|-------------------- | ------------------------------------------
|Title
 of each class | Name
 of each exchange on which registered
|NONE                 | NONE                                      

Securities registered under Section 12(g) of the Exchange Act:

COMMON STOCK, PAR VALUE $.01 PER SHARE
(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 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. o

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
number of shares of the Registrants outstanding Common Stock, as of March 11,
2008, was 23,214,132 shares. 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, 2007),
was $8,795,338.

Documents
Incorporated by Reference: Proxy Statement to be filed pursuant to Regulation
14A of the Exchange Act on or before April 29, 2008, 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 equity or municipal finance underwritings; limited trading
opportunities; the method of placing trades by the Companys customers;
computer and telephone system failures; the level of spending by the Company on
advertising and 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.

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PART I

|        |         
|------- | --------
|Item 1. | BUSINESS

General

Siebert
Financial Corp. (the Company) 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 (Siebert).
Muriel 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).

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, 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), engages in providing products,
services and information all uniquely devoted to woman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, a date that would later come
to be known as May Day. 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 and competitive
with the national discount brokerage 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
listed orders are routed by its clearing agent in a manner intended to afford
its customers the opportunity for price improvement on all orders. Sieberts
over the counter orders are executed by its clearing agent through a network of
Nasdaq market makers with no single market maker executing all trades. The firm
also offers customers execution services through ARCA, Reuters Instinet
systems and other electronic communication networks (ECNs)for an additional
fee. These systems give customers access to all ECNs before and after regular
market hours. Siebert believes that its over-the counter executions
consistently afford its customers the opportunity for price improvement.

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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
presently has retail offices in New York, New York, Jersey City, New Jersey,
Boca Raton, Surfside, 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, accounts are
monitored closely until their payment obligation is completed; if the customer
does not meet the commitment, steps are taken 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 networks. Browser based access and other types of data communications
are also utilized and consumed by Sieberts systems. 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 of 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 3rd
Avenue, Suite 1720, New York, NY 10022.

-4-

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Current Developments

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.

Siebert
terminated the fully disclosed clearing agreement (the Clearing Agreement)
with Pershing LLC (formerly the Pershing division of Donaldson, Lufkin &
Jenrette Securities Corporation) (Pershing) in 2003. Based on consultation
with counsel, Siebert believes that the $1,500,000 that it advanced to Pershing
in January 2003 should have been returned and that Pershing may be liable for
damages. Pershing 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. Siebert believes
the Pershing claims are without merit and that the ultimate outcome of this
matter will not have a material adverse effect on the Companys results of
operations or financial position.

On
January 23, 2008, our board of directors authorized the repurchase of up to
300,000 shares of our common stock. Shares will be purchased from time to time,
in our discretion, in the open market and in private transactions. We intend to
continue acquiring shares pursuant to our stock repurchase program based upon
the price of the stock and in accordance with applicable rules and regulations.

The Capital Markets Division

In
1991, Siebert created its Capital Markets Group (SCM) division, which serves
as a co-manager, underwriting syndicate member, or selling group member on a
wide spectrum of securities offerings for corporations and Federal agencies.

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.

-5-

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During
1996, Siebert formed the Siebert, Brandford, Shank division of the investment
banking group to enhance Sieberts tax exempt underwriting activities. The
operations of the Siebert, Brandford, Shank division were moved on July 1,
1998, to a newly formed entity, SBS. Two individuals, Mr. Napoleon Brandford
and Ms. Suzanne F. Shank, own 51% of the equity and are entitled to 51% of the
net profits of SBS and Siebert is entitled to the balance. Through its
investment in SBS, Siebert has become a more significant factor in the tax
exempt underwriting area, and expects to enhance its government and institutional
relationships, as well as the breadth of products that can be made available to
retail clients. During 2007, SBS served as the lead manager of over $4 billion
of negotiated municipal new issues and served as a co-manager in over $75
billion of negotiated municipal new issues.

Since
its inception, the Siebert, Brandford, Shank division and its successor SBS
have co-managed offerings of approximately $504 billion and lead managed
offerings of approximately $21 billion. Clients include the States of
California, Texas, Washington, Ohio and Michigan and the Cities of Chicago,
Detroit, Los Angeles, Houston, Dallas, Denver and St. Louis.

We
entered into an Operating Agreement, effective as of April 19, 2005 (the
Operating Agreement), with Suzanne Shank and Napolean Brandford III, the two
individual principals of SBS ( 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. Income from
SBSFPC is considered to be integral to our operations.

SBS
operates out of offices in New York, Seattle, Houston, Chicago, Detroit, Los
Angeles, Washington, DC, San Antonio, Anchorage, Miami and Dallas, Atlanta,
Weehawken, San Diego and Baton Rouge.

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. The reduced volume of trading starting in early 2001
is leading to consolidation in the industry in both the online and traditional
brokerage business. 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 as they
expand their product lines. 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.

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.

-6-

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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.

On
March 4, 2005, Siebert consented without admitting or denying guilt to a
$45,000 fine and censure by the NYSE due to findings of books-and-records,
financial, operational and supervisory deficiencies. This action was based on
technical record keeping and administrative deficiencies and there were no
complaints from and no losses to any Siebert customers. As the NYSE expressly
noted, Siebert had no prior disciplinary history in its 37 years in business.

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 its 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. Siebert is a member firm of the NYSE and FINRA. 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.

-7-

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Under
applicable regulations, Siebert is required to maintain regulatory net capital
of at least $250,000. At December 31, 2007 and 2006, Siebert had net capital of
$29.5 million and $27.7 million, respectively. Siebert claims exemption from
the reserve requirement under Section 15c3-3(k)(2)(ii).

Employees

As
of March 11, 2008, we had approximately 90 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

Our
principal business activities include discount retail broker-dealer operations,
as well as investment banking, institutional sales and other related business
lines. 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. 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. The varied risks associated with our business and
the securities industry in general could adversely affect our commission and
other revenues. 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 adversely affecting the
price of our common stock.

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 discount 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. Sieberts equity investee, SBS, a municipal
bond underwriter, also encounters significant competition from firms engaged in
the municipal finance business. The general financial success of the securities
industry over the past several years and the price wars encountered and lower
commission rates in the discount brokerage business in general have
strengthened our existing 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 as they expand their product
lines. 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.

-8-

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During
2007, competition continued to intensify both among all classes of brokerage
firms and within the discount brokerage business as well as from consolidation
in the discount brokerage industry. Some competitors in the discount brokerage
business offer services which we do not, including financial advice and
investment management. In the last two years, 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.

Siebert,
as a registered broker-dealer and FINRA member organization, 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. 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 by SIPC, 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 MSRB 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.

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.

-9-

---



We are subject to
net capital requirements.

The
SEC, the NYSE 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 of
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 have established policies with respect to maximum
purchase commitments for new customers or customers with inadequate collateral
to support a requested purchase. However, our managers have some flexibility in
the allowance of certain transactions. When transactions occur outside normal
guidelines, these accounts are monitored until their payment obligation is
completed. If the customer does not meet the commitment, we take steps to close
out the position in an attempt to minimize losses.

We
have personnel specifically responsible for monitoring all customer positions
for the maintenance of required collateral. These personnel also monitor
accounts that may be concentrated in one or more securities whereby a
significant decline in the value of a particular security could reduce the
value of the accounts collateral below the accounts loan obligation. While we
have not had significant credit losses in the last five years, 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.

We
presently receive and process up to 65% 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. We cannot assure you 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.

-10-

---



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.
Registered representatives equipped with online computer terminals can access
customer account information, obtain securities prices and related information
and enter and confirm orders online.

To
support our customer service delivery systems, as well as other applications
such as clearing functions, account administration, record keeping and direct
customer access to investment information, we maintain a computer network in
New York City. Through our clearing agent, our computers are also linked to the
major registered U.S. securities exchanges, the National Securities Clearing
Corporation and the Depository Trust Company. Failure of the 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 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, their can be no assurance that an active public market
will continue.

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

None.

-11-

---



|        |           
|------- | ----------
|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 | 
|                                                               |  |                                          |  |                                    |          |                |  |      | 
|Retail
 Offices                                                |  |                                          |  |                                    |          |                |  |      | 
|                                                               |  |                                          |  |                                    |          |                |  |      | 
|9701
 Wilshire Boulevard, Suite 1111
 Beverly Hills, CA 90212  |  | 1,200                                    |  |                                    | 10/31/10 |                |  | None | 
|                                                               |  |                                          |  |                                    |          |                |  |      | 
|4400 North
 Federal Highway
 Boca Raton, FL 33431              |  | 2,438                                    |  |                                    | 5/31/09  |                |  | None | 
|                                                               |  |                                          |  |                                    |          |                |  |      | 
|111 Pavonia
 Avenue(1)
 Jersey City, NJ 07310                  |  | 7,768                                    |  |                                    | 6/30/09  |                |  | None | 
|                                                               |  |                                          |  |                                    |          |                |  |      | 
|400 Fifth
 Avenue  South
 Naples, FL 33940                    |  | 1,008                                    |  |                                    | 4/30/08  |                |  | None | 
|                                                               |  |                                          |  |                                    |          |                |  |      | 
|1217 South
 Flager Drive, 3rd 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.

|        |                                                
|------- | -----------------------------------------------
|Item 4. | SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

No
matter was submitted to a vote of shareholders during the fourth quarter of the
fiscal year ended December 31, 2007.

-12-

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|        |                                                                                                              
|------- | -------------------------------------------------------------------------------------------------------------
|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 - 2006             |  | $    | 2.88 |     | $ | 2.39 | 
|                                  |  |      |      |     |   |      | 
|Second
 Quarter - 2006            |  | $    | 2.99 |     | $ | 2.35 | 
|                                  |  |      |      |     |   |      | 
|Third
 Quarter - 2006             |  | $    | 2.95 |     | $ | 2.35 | 
|                                  |  |      |      |     |   |      | 
|Fourth
 Quarter - 2006            |  | $    | 5.70 |     | $ | 2.75 | 
|                                  |  |      |      |     |   |      | 
|First Quarter
  2007             |  | $    | 4.50 |     | $ | 3.26 | 
|                                  |  |      |      |     |   |      | 
|Second
 Quarter  2007            |  | $    | 5.37 |     | $ | 3.37 | 
|                                  |  |      |      |     |   |      | 
|Third
 Quarter  2007             |  | $    | 4.50 |     | $ | 3.06 | 
|                                  |  |      |      |     |   |      | 
|Fourth
 Quarter  2007            |  | $    | 5.76 |     | $ | 3.13 | 
|                                  |  |      |      |     |   |      | 
|January 1,
 2008 - March 20, 2008 |  | $    | 4.00 |     | $ | 3.00 | 

On
March 20, 2008, the closing price of our common stock on the Nasdaq Global
Market was $3.16 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 20,
2008.

Dividend Policy

On
June 4, 2007, the Board of Directors declared a dividend of twelve cents per
share on our common stock, which was paid on June 29, 2007 to shareholders of
record at the close of business on June 20, 2007. The total amount paid on this
dividend declaration was $559,232. Ms. Muriel Siebert, the Chief Executive
Officer and majority shareholder waived the right to receive the dividend in
excess of the aggregate amount paid to other shareholders. Other shareholders
were paid dividends of $279,616.

On
August 9, 2006, the Board of Directors declared a dividend of eight cents per
share on our common stock, which was paid on August 30, 2006 to shareholders of
record at the close of business on August 21, 2006. The total amount paid on
this dividend declaration was $359,048. Ms. Muriel Siebert, the Chief Executive
Officer and majority shareholder waived the right to receive the dividend in
excess of the aggregate amount paid to other shareholders. Other shareholders
were paid dividends of $179,524.

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.

-13-

---



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. Under this program, shares are purchased from time
to time, at our discretion, in the open market and in private transactions. No
purchases of common stock were made during the fourth quarter of 2007. We have
purchased 999,500 shares of our common stock  under this program and 500
shares of our common stock may yet be purchased under this program.

On
January 23, 2008, our Board of Directors authorized the repurchase of up to
300,000 shares of our common stock. Shares will be purchased from time to time,
in our discretion, in the open market and in private transactions. We intend to
continue acquiring shares pursuant to our stock repurchase program based upon
the price of the stock and in accordance with applicable rules and regulations.

| | 
| | 
| | 

Equity Compensation Plan Information

The following
table sets forth information as of December 31, 2007 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)     |  | 1,467,200                                                                                      |  |                                                                                    |  | $                                                                                                                                         | 4.28 |  |  | 2,000,000 |  | 
|                                                               |  |                                                                                                |  |                                                                                    |  |                                                                                                                                           |      |  |  |           |  | 
|Equity compensation plans not approved by
 security holders(2) |  | 41,400                                                                                         |  |                                                                                    |  |                                                                                                                                           |     |  |  | 18,600    |  | 
|                                                               |  |                                                                                                |  |                                                                                    |  |                                                                                                                                           |      |  |  |           |  | 
|Total                                                          |  | 1,508,600                                                                                      |  |                                                                                    |  | $                                                                                                                                         | 4.28 |  |  | 2,018,600 |  | 

|    |                                                   | 
|--- | ------------------------------------------------- | 
|    |                                                  
|(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, 2007, 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.

-14-

---



|                 |                                                                                                                                                                                                                                                                                                               
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Our Performance: | The graph
 below compares our performance from December 31, 2002 through December 31,
 2007, 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 Group, Inc. and The Charles Schwab Corporation.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*Among Siebert Financial Corp., The NASDAQ
Composite IndexAnd A Peer Group

(LINE GRAPH)

|                                 |                                                                                  
|-------------------------------- | ---------------------------------------------------------------------------------
|*                                | $100
 invested on 12/31/02 in stock or index-including reinvestment of dividends.
|                                 |                                                                                  
|Fiscal year
 ending December 31.

-15-

---



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

|                                                       |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|------------------------------------------------------ |  | ---- | ---------- | ---- | - | ---------- |  | ---- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                       |  | 2007 |            | 2006 |   | 2005       |  | 2004 |            | 2003 |  
|                                                       |  |      |            |      |   |            |  |      |            |      |  
|Income statement data:                                 |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Total Revenues                                         |  | $    | 33,914     |      | $ | 28,818     |  | $    | 29,323     |      | $ | 26,392     |  | $ | 22,796     | 
|Net income                                             |  | $    | 2,258      |      | $ | 3,425      |  | $    | 1,863      |      | $ | 533        |  | $ | 123        | 
|                                                       |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Net income per share of common stock                   |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Basic                                                  |  | $    | 0.10       |      | $ | 0.15       |  | $    | 0.08       |      | $ | 0.02       |  | $ | 0.01       | 
|Diluted                                                |  | $    | 0.10       |      | $ | 0.15       |  | $    | 0.08       |      | $ | 0.02       |  | $ | 0.01       | 
|                                                       |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Weighted average shares outstanding (basic)            |  |      | 22,206,346 |      |   | 22,129,566 |  |      | 22,093,369 |      |   | 22,113,228 |  |   | 22,305,369 | 
|Weighted average shares outstanding
  (diluted)        |  |      | 22,273,550 |      |   | 22,252,851 |  |      | 22,127,940 |      |   | 22,276,562 |  |   | 22,453,538 | 
|                                                       |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Statement of financial condition data (at
  year-end): |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|                                                       |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Total assets                                           |  | $    | 47,924     |      | $ | 46,869     |  | $    | 43,027     |      | $ | 41,560     |  | $ | 40,026     | 
|Total liabilities excluding subordinated
  borrowings  |  | $    | 5,704      |      | $ | 6,460      |  | $    | 5,975      |      | $ | 6,460      |  | $ | 4,891      | 
|Stockholders equity                                   |  | $    | 42,220     |      | $ | 40,409     |  | $    | 37,052     |      | $ | 35,100     |  | $ | 35,135     | 

|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|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
uncertainty over the state of the economy due to the high price of oil and the
increase of defaults relating to subprime mortgages weighed on the markets in
2007 and continues to affect interest in buying stocks.

Competition
continued 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
entered into an Operating Agreement, effective as of April 19, 2005 (the
Operating Agreement), with Suzanne Shank and Napolean Brandford III, the two
individual principals of SBS ( 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. Income from
SBSFPC is considered to be integral to our operation.

-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.

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.

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.

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 effect
the reported amounts of assets, liabilities, revenues and expenses and the
related disclosure of contigent 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, 2007 Compared To Year Ended December 31, 2006

Revenues.
Total revenues for 2007 were $33.9 million, an increase of $5.1 million, or
17.7%, from 2006. Commission and fee income increased $1.4 million, or 5.7%,
from the prior year to $26.1 million due to an increase in institutional
trading and the commission recapture operations as well as increase in retail
customer trading volumes offset slightly by a decrease in the average
commission charged per trade.

Investment
banking revenues increased $1.7 million, or 97.7%, from the prior year to $3.4
million in 2007 due to our participation in more new issues in the equity and
debt capital markets.

-17-

---



Trading
profits decreased $130,000, or 17.2%, from the prior year to $624,000 primarily
due to decreased trading in municipal, government and corporate bonds within
our riskless trading group.

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.

Income
from interest and dividends increased $131,000, or 8%, from the prior year to
$1.8 million primarily due to higher interest rates and higher cash balances.

Expenses.
Total expenses for 2007 were $31.3 million, an increase of $4.6 million, or
17.2%, from the prior year.

Employee
compensation and benefit costs increased $980,000 or 8.9%, from the prior year
to $12.0 million primarily due to an increase in commissions paid based on
production offset by a decrease in health insurance and employment of temporary
employees.

Clearing
and floor brokerage fees increased $490,000, or 9.4%, from the prior year to
$5.7 million primarily due to an increase in listed floor executions for
institutional customers executed at the New York Stock Exchange and an increase
in volume relating to the commission recapture operation.

Professional
fees increased $2.9 million, or 75.5% from the prior year to $6.7 million
primarily due to an increase in legal fees relating to the Intuit case and
consulting fees relating to the our compliance with Sarbanes-Oxley.

Advertising
and promotion expense decreased $195,000, or 21.2%, from the prior year to
$725,000 primarily due to the reduction in print advertising production in 2007
and the production and airing of television commercials in the Florida region
in 2006.

Communications
expense increased $306,000, or 17.9%, from the prior year to $2.0 million
primarily due to an increase in costs associated with our new website.

Occupancy
costs increased $168,000, or 14.7%, from the prior year to $1.3 million
principally due to the an increase in rent in the Florida branches and New
Jersey and California offices.

Other
general and administrative expenses decreased $13,000, from the prior year to
$2.9 million primarily due to a decrease in depreciation and amortization
expenses, employee placement fees, travel and entertainment costs and office
expenses offset by increases in printing, insurance and transportation costs.

Income
from our equity investment in Siebert, Brandford, Shank & Co., LLC, an
entity in which Siebert holds a 49% equity interest (SBS), for 2007 was $1.4
million compared to income of $2.9 million for 2006, a decrease of $1.5 million
or 51.8% from the same period in 2006 primarily due to SBS participating in
less municipal bond offerings especially in the last six months of the year.
SBS serves as an underwriter for municipal bond offerings. Income from our
equity investment in SBS Financial Products Company, LLC, an entity in which we
hold a 33% equity interest (SBSFPC) for 2007, was $40,000 as compared to
income of $916,000, a decrease of $876,000 or 95.6% from the same period in
2006. This decrease was due to a decrease in the number and size of the
transactions. SBSFPC engages in derivatives transactions related to the
municipal underwriting business. Income from equity investees is considered to
be integral to our operations and material to the results of operations.

Taxes.
The provision for income taxes decreased by $711,000, or 28.6% from the prior
year to $1.8 million due to a decrease in net income before tax to $4.0 million
in 2007 from $5.9 million in 2006.

Year Ended December
31, 2006 Compared To Year Ended December 31, 2005

Revenues.
Total revenues for 2006 were $28.8 million, a decrease of $505,000, or 1.7%,
from 2005. Commission and fee income decreased $558,000, or 2.2%, from the
prior year to $24.7 million primarily due to a decrease in commissions
generated by the commission recapture operations offset by increases in the
institutional trading operations as well as retail customer operations.

Investment
banking revenues decreased $668,000, or 28.2%, from the prior year to $1.7
million in 2006 due to our participating in fewer new issues in the equity
capital markets team.

-18-

---



Income
from our equity investment in Siebert, Brandford, Shank & Co., LLC, an
entity in which Siebert holds a 49% equity interest (SBS), for 2006 was $2.9
million compared to income of $1.7 million, an increase of $1.2 million or
74.3% from the same period in 2005. This increase was due to SBS participating
in more managed and co-managed transactions as well as an increase revenues
from trading. SBS serves as an underwriter for municipal bond offerings. Income
from our equity investment in SBS Financial Products Company, LLC, an entity in
which we hold a 33% equity interest (SBSFPC) for 2006, was $916,000 as
compared to income of $194,000, an increase of $722,000 or 372.2% from the same
period in 2005. This increase was due to an increase in the number and size of
the transactions and the mark to market of the positions. SBSFPC engages in
derivatives transactions related to the municipal underwriting business.

Trading
profits increased $52,000, or 7.4%, from the prior year to $754,000 primarily
due to increased trading in municipal, government and corporate bonds within
our riskless trading group and the mark to market of our investment.

Income
from interest and dividends increased $669,000, or 68.4%, from the prior year
to $1.7 million primarily due to higher interest rates and higher cash
balances.

Expenses.
Total expenses for 2006 were $26.7 million, a decrease of $1.3 million, or
4.5%, from the prior year.

Employee
compensation and benefit costs decreased $450,000, or 3.9%, from the prior year
to $11.0 million primarily due to a decrease in headcount in customer service
and new accounts departments, commission based on production and settlement of
employee related matters and termination of an executive officer in 2005.

Clearing
and floor brokerage fees decreased $92,000, or 1.7%, from the prior year to
$5.2 million primarily due to decreased volume relating to the commission
recapture business offset by an increase in fixed fees that are not related to
volume that are charged our clearing firm.

Professional
fees decreased $498,000, or 11.6% from the prior year to $3.8 million primarily
due to an decrease in legal fees relating to litigation with Intuit and
consulting fees relating to the commission recapture business.

Advertising
and promotion expense increased $44,000, or 5.0%, from the prior year to
$920,000 primarily due to the production and airing of television commercials
in the Florida region in the first quarter of 2006.

Communications
expense decreased $17,000, or 1.0%, from the prior year to $1.7 million from
actively pursuing alternative vendors and utilizing new technologies.

Occupancy
costs increased $93,000, or 8.8%, from the prior year to $1.2 million
principally due to the an increase in operating and utilities cost charged by
the landlord in our Jersey City, New Jersey branch as well as our branches in
the Florida region.

Other
general and administrative expenses decreased $327,000, or 10.0%, from the
prior year to $3.0 million primarily due to a decrease in depreciation and
amortization expenses, registration and exchange fees and costs relating to the
institutional direct access operations offset by increases in travel and
entertainment and office supplies.

Taxes.
The provision for income taxes increased by $1,134,000, or 84.0% from the prior
year to $2.5 million due to an increase in net income before tax to $5.9
million in 2006 from $3.2 million in 2005.

Liquidity and
Capital Resources

Our
assets are highly liquid, consisting generally of cash, money market funds and
securities freely saleable in the open market. Our total assets at December 31,
2007 were $48 million, of which, $36.3 million, or 76%, were regarded by us as
highly liquid.

Siebert
is subject to the net capital requirements of the SEC, the NYSE and other
regulatory authorities. At December 31, 2007, Sieberts regulatory net capital
was $29.5 million, $29.2 million in excess of its minimum capital requirement
of $250,000.

Siebert
terminated the fully disclosed clearing agreement (the Clearing Agreement)
with Pershing LLC (formerly the Pershing division of Donaldson, Lufkin &
Jenrette Securities Corporation) (Pershing) in 2003. Based on consultation
with counsel, Siebert believes that the $1,500,000 that it advanced to Pershing
in January 2003 should have been returned and that Pershing may be liable for
damages. Pershing 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. Siebert believes
the Pershing claims are without merit and that the ultimate outcome of this
matter will not have a material adverse effect on the Companys results of
operations or financial position.

-19-

---



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 pursuant to a secured
promissory note on a subordinated basis. 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 8% per annum. The facility expires on August 31, 2009 at which time SBS is
obligated to repay to Siebert any amounts borrowed by SBS thereunder.

Below
is a table that presents our obligations and commitments at December 31, 2007:

|                              |  |                       |           |                    |   |           |  |           |           |                        |   |        |  |   |   | 
|----------------------------- |  | --------------------- | --------- | ------------------ | - | --------- |  | --------- | --------- | ---------------------- | - | ------ |  | - | - | 
|                              |  | Payment Due By Period |          
|                              |  |                       |           |                    |   |           |  |           |           |                        |   |        |  |   |   | 
|Contractual
  Obligations     |  | Total                 |           | Less Than
  1 Year |   | 1-3 Years |  | 3-5 Years |           | More Than
  Five Years |  
|Operating
  lease obligations |  | $                     | 2,959,000 |                    | $ | 1,105,000 |  | $         | 1,786,000 |                        | $ | 68,000 |  | $ | 0 | 

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

Financial Instruments Held For Trading Purposes:

Through
Siebert, we maintain inventories in exchange-listed and Nasdaq equity
securities and municipal securities on both a long and short basis. We did not
have any short positions at December 31, 2007. The Company does not 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, 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 8% per annum. Siebert earned interest of $96,000 from SBS in
each of the years that Sieberts commitment has been outstanding.

Financial Instruments Held For Purposes Other
Than Trading:

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

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

|        |                                            
|------- | -------------------------------------------
|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, 2007.

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

A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the internal control
system are met. Because of the inherent limitations of any internal control
system, no evaluation of controls can provide absolute assurance that all
control issues, if any, within a company have been detected.

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

None

-21-

---



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 29,
2008.

(b)          Identification
of Executive Officers

|                       |  |     |  |                                                                
|---------------------- |  | --- |  | ---------------------------------------------------------------
|Name                   |  | Age |  | Position                                                       
|                       |  |     |  |                                                                
|                       |  |     |  |                                                                
|Muriel F.
  Siebert    |  | 75  |  | Chairwoman
  and President                                     
|                       |  |     |  |                                                                
|Ameen Esmail           |  | 49  |  | Executive
  Vice President and Director of Business Development
|                       |  |     |  |                                                                
|Joseph M.
  Ramos, Jr. |  | 49  |  | Executive
  Vice President and Chief Financial Officer         
|                       |  |     |  |                                                                
|Jeanne
  Rosendale     |  | 43  |  | Executive
  Vice President and General Counsel                 
|                       |  |     |  |                                                                
|Daniel Iesu            |  | 48  |  | 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 Woman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. From May 1999 to February 2002,
Mr. Ramos served as Chief Financial Officer of A.B. Watley Group, 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.

-22-

---



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 likewise 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.

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

(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 29, 2008.

(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 29, 2008.

|         |                       
|-------- | ----------------------
|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 29, 2008.

|         |                                                                                                
|-------- | -----------------------------------------------------------------------------------------------
|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 29, 2008.

|         |                                                                           
|-------- | --------------------------------------------------------------------------
|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 29, 2008.

|         |                                       
|-------- | --------------------------------------
|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 29, 2008.

-23-

---



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, 2007 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, 10.5 and 10.9 are management contracts, compensatory plans or arrangements.

-24-

---



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, 2007 and 2006                                                         |  | F-2 
|                                                                                                                                       |  |     
|Consolidated Statements of Income for each
  of the years in the three-year period ended December 31, 2007                             |  | F-3 
|                                                                                                                                       |  |     
|Consolidated Statements of Changes in
Stockholders
  Equity for each of the years in the three-year period ended 
  December 31, 2007 |  | F-4 
|                                                                                                                                       |  |     
|Consolidated Statements of Cash Flows for
  each of the years in the three-year period ended December 31, 2007                         |  | 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, 2007 and 2006                                                                      |  | F-18
|                                                                                                                                       |  |     
|Statements of Operations for each of the
  years in the three-year period ended December 31, 2007                                      |  | F-19
|                                                                                                                                       |  |     
|Statements of Changes in Members Capital
  for each of the years in the three-year period ended December 31, 2007                     |  | F-20
|                                                                                                                                       |  |     
|Statements of Cash Flows for each of the
  years in the three-year period ended December 31, 2007                                      |  | F-21
|                                                                                                                                       |  |     
|Notes to Financial Statements                                                                                                          |  | F-22

---



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,
2007 and 2006, and the related consolidated statements of income, changes in
stockholders equity and cash flows for each of the years in the three-year
period ended December 31, 2007. 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, 2007 and 2006, and the consolidated
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2007 in conformity with U.S. generally
accepted accounting principles.

/s/ Eisner LLP

New York, New
York
March 27, 2008

F-1

---



SIEBERT FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION

|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | -
|                                                                                                                                                                                                                                   |  | December 31, |           
|                                                                                                                                                                                                                                   |  |              |           
|                                                                                                                                                                                                                                   |  | 2007         |            | 2006 |  
|                                                                                                                                                                                                                                   |  |              |            |      |  
|ASSETS                                                                                                                                                                                                                             |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|Cash and cash equivalents                                                                                                                                                                                                          |  | $            | 34,589,000 |      | $ | 32,606,000 |  
|Cash equivalents - restricted                                                                                                                                                                                                      |  |              | 1,300,000  |      |   | 1,300,000  |  
|Receivable from clearing broker                                                                                                                                                                                                    |  |              | 1,683,000  |      |   | 2,468,000  |  
|Securities owned, at market value                                                                                                                                                                                                  |  |              | 739,000    |      |   |            |  
|Furniture, equipment and leasehold
  improvements, net                                                                                                                                                                             |  |              | 1,037,000  |      |   | 510,000    |  
|Investments in and advances to affiliates                                                                                                                                                                                          |  |              | 5,902,000  |      |   | 6,765,000  |  
|Prepaid expenses and other assets                                                                                                                                                                                                  |  |              | 936,000    |      |   | 1,211,000  |  
|Intangibles, net                                                                                                                                                                                                                   |  |              | 871,000    |      |   | 1,182,000  |  
|Deferred taxes                                                                                                                                                                                                                     |  |              | 867,000    |      |   | 827,000    |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  | $            | 47,924,000 |      | $ | 46,869,000 |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                               |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|Liabilities:                                                                                                                                                                                                                       |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|Accounts payable and accrued liabilities                                                                                                                                                                                           |  | $            | 5,704,000  |      | $ | 6,460,000  |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|Commitments and contingent
liabilities - Note J                                                                                                                                                                                    |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|Stockholders equity:                                                                                                                                                                                                              |  |              |            |      |   |            |  
|Common stock, $.01 par value; 49,000,000
  shares authorized, 23,211,846 shares issued and 22,212,346 shares outstanding
  at December 31, 2007 and 23,202,046,shares issued and 22,202,546 shares
  outstanding December 31, 2006 |  |              | 232,000    |      |   | 232,000    |  
|Additional paid-in capital                                                                                                                                                                                                         |  |              | 18,832,000 |      |   | 18,719,000 |  
|Retained earnings                                                                                                                                                                                                                  |  |              | 27,660,000 |      |   | 25,962,000 |  
|Less: 999,500 shares of treasury stock at
  cost at December 31, 2007 and 2006                                                                                                                                                     |  |              | (4,504,000 | )    |   | (4,504,000 | )
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              | 42,220,000 |      |   | 40,409,000 |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                   |  | $            | 47,924,000 |      | $ | 46,869,000 |  
|                                                                                                                                                                                                                                   |  |              |            |      |   |            |  

See notes to consolidated financial
statements.

F-2

---



CONSOLIDATED
STATEMENTS OF INCOME

|                                                 |  |                         |            |      |   |            |  |   |            | 
|------------------------------------------------ |  | ----------------------- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                 |  | Year Ended December 31, |           
|                                                 |  |                         |           
|                                                 |  | 2007                    |            | 2006 |   | 2005       | 
|                                                 |  |                         |            |      |   |            | 
|Revenue:                                         |  |                         |            |      |   |            |  |   |            | 
|Commissions and fees                             |  | $                       | 26,119,000 |      | $ | 24,713,000 |  | $ | 25,271,000 | 
|Investment banking                               |  |                         | 3,369,000  |      |   | 1,704,000  |  |   | 2,372,000  | 
|Trading profits                                  |  |                         | 624,000    |      |   | 754,000    |  |   | 702,000    | 
|Settlement of lawsuit                            |  |                         | 2,024,000  |      |   |            |  |   |            | 
|Interest and dividends                           |  |                         | 1,778,000  |      |   | 1,647,000  |  |   | 978,000    | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|                                                 |  |                         | 33,914,000 |      |   | 28,818,000 |  |   | 29,323,000 | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|Expenses:                                        |  |                         |            |      |   |            |  |   |            | 
|Employee compensation and benefits               |  |                         | 11,957,000 |      |   | 10,977,000 |  |   | 11,427,000 | 
|Clearing fees, including floor brokerage         |  |                         | 5,693,000  |      |   | 5,203,000  |  |   | 5,295,000  | 
|Professional fees                                |  |                         | 6,667,000  |      |   | 3,798,000  |  |   | 4,296,000  | 
|Advertising and promotion                        |  |                         | 725,000    |      |   | 920,000    |  |   | 876,000    | 
|Communications                                   |  |                         | 2,017,000  |      |   | 1,711,000  |  |   | 1,728,000  | 
|Occupancy                                        |  |                         | 1,314,000  |      |   | 1,146,000  |  |   | 1,053,000  | 
|Interest                                         |  |                         |            |      |   |            |  |   | 2,000      | 
|Other general and administrative                 |  |                         | 2,942,000  |      |   | 2,955,000  |  |   | 3,282,000  | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|                                                 |  |                         | 31,315,000 |      |   | 26,710,000 |  |   | 27,959,000 | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|Income from equity investees                     |  |                         | 1,432,000  |      |   | 3,801,000  |  |   | 1,849,000  | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|Income before provision for income taxes         |  |                         | 4,031,000  |      |   | 5,909,000  |  |   | 3,213,000  | 
|Provision for income taxes                       |  |                         | 1,773,000  |      |   | 2,484,000  |  |   | 1,350,000  | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|Net income                                       |  | $                       | 2,258,000  |      | $ | 3,425,000  |  | $ | 1,863,000  | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|Net income per share of common stock -
  basic   |  | $                       | 0.10       |      | $ | 0.15       |  | $ | 0.08       | 
|Net income per share of common stock -
  diluted |  | $                       | 0.10       |      | $ | 0.15       |  | $ | 0.08       | 
|                                                 |  |                         |            |      |   |            |  |   |            | 
|Weighted average shares outstanding - basic      |  |                         | 22,206,346 |      |   | 22,129,566 |  |   | 22,093,369 | 
|Weighted average shares outstanding -
  diluted  |  |                         | 22,273,550 |      |   | 22,252,851 |  |   | 22,127,940 | 

See notes to consolidated financial statements.

F-3

---



CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |         |  |   |            |   |   |            |  
|------------------------------------------------------------------------- |  | ------------------ | ---------- | -------------- | - | ----------------------------- |  | ------------------ | ---------- | ------------------ | - | ---------- | - | ----- | ------- |  | - | ---------- | - | - | ---------- | -
|                                                                          |  | Common Stock       |            | Treasury Stock |  
|                                                                          |  |                    |            |                |  
|                                                                          |  | Number
 Of
 Shares |            | $.01 ParValue  |   | Additional
 Paid -In
 Capital |  | Retained
 Earnings |            | Number
 Of
 Shares |   | Amount     |   | Total |        
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |        
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |         |  |   |            |   |   |            |  
|Balance -
 January 1, 2005                                                |  |                    | 22,983,917 |                | $ | 229,000                       |  | $                  | 17,931,000 |                    | $ | 21,033,000 |   |       | 901,616 |  | $ | (4,093,000 | ) | $ | 35,100,000 |  
|Net income                                                                |  |                    |            |                |   |                               |  |                    |            |                    |   | 1,863,000  |   |       |         |  |   |            |   |   | 1,863,000  |  
|Treasury share purchases                                                  |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       | 14,818  |  |   | (44,000    | ) |   | (44,000    | )
|Issuance of shares in connection with exercise of employee stock
 options |  |                    | 55,485     |                |   | 1,000                         |  |                    | 132,000    |                    |   |            |   |       |         |  |   |            |   |   | 133,000    |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |         |  |   |            |   |   |            |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |         |  |   |            |   |   |            |  
|Balance -
 December 31, 2005                                              |  |                    | 23,039,402 |                |   | 230,000                       |  |                    | 18,063,000 |                    |   | 22,896,000 |   |       | 916,434 |  |   | (4,137,000 | ) |   | 37,052,000 |  
|Net income                                                                |  |                    |            |                |   |                               |  |                    |            |                    |   | 3,425,000  |   |       |         |  |   |            |   |   | 3,425,000  |  
|Treasury share purchases                                                  |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       | 83,066  |  |   | (367,000   | ) |   | (367,000   | )
|Issuance of shares in connection with exercise of employee stock
options  |  |                    | 162,644    |                |   | 2,000                         |  |                    | 447,000    |                    |   |            |   |       |         |  |   |            |   |   | 449,000    |  
|Dividend on common stock
 ($.08 per share)                                |  |                    |            |                |   |                               |  |                    |            |                    |   | (359,000   | ) |       |         |  |   |            |   |   | (359,000   | )
|Tax benefit arising from exercise of employee stock options               |  |                    |            |                |   |                               |  |                    | 51,000     |                    |   |            |   |       |         |  |   |            |   |   | 51,000     |  
|Employee stock based compensation                                         |  |                    |            |                |   |                               |  |                    | 158,000    |                    |   |            |   |       |         |  |   |            |   |   | 158,000    |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |         |  |   |            |   |   |            |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |         |  |   |            |   |   |            |  
|Balance -
 December 31, 2006                                              |  |                    | 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      |  
|Employee 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 |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |         |  |   |            |   |   |            |  

See notes to consolidated financial
statements.

F-4

---



CONSOLIDATED
STATEMENTS OF CASH FLOWS

|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|---------------------------------------------------------------------------------- |  | ----------------------- | ---------- | ---- | - | ---------- | - | - | ---------- | -
|                                                                                   |  | Year Ended December 31, |           
|                                                                                   |  |                         |           
|                                                                                   |  | 2007                    |            | 2006 |   | 2005       |  
|                                                                                   |  |                         |            |      |   |            |  
|Cash Flows From Operating Activities:                                              |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Net income                                                                         |  | $                       | 2,258,000  |      | $ | 3,425,000  |   | $ | 1,863,000  |  
|Adjustments to reconcile net income to net
 cash provided by operating activities: |  |                         |            |      |   |            |   |   |            |  
|Depreciation
 and amortization                                                     |  |                         | 690,000    |      |   | 780,000    |   |   | 1,128,000  |  
|Income from equity
 investees                                                      |  |                         | (1,432,000 | )    |   | (3,801,000 | ) |   | (1,849,000 | )
|Distribution
 from equity investees                                                |  |                         | 2,428,000  |      |   | 1,427,000  |   |   | 1,573,000  |  
|Deferred
 taxes                                                                    |  |                         | (40,000    | )    |   | (226,000   | ) |   | (100,000   | )
|Employee
 stock based compensation                                                 |  |                         | 84,000     |      |   | 158,000    |   |   |            |  
|Changes in:                                                                        |  |                         |            |      |   |            |   |   |            |  
|Securities owned, at market value                                                  |  |                         | (739,000   | )    |   |            |   |   |            |  
|Receivable from clearing broker                                                    |  |                         | 785,000    |      |   | (64,000    | ) |   | (33,000    | )
|Prepaid expenses and other assets                                                  |  |                         | 275,000    |      |   | (219,000   | ) |   | 547,000    |  
|Accounts payable and accrued liabilities                                           |  |                         | (756,000   | )    |   | 485,000    |   |   | (485,000   | )
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Net cash provided by operating
activities                                          |  |                         | 3,553,000  |      |   | 1,965,000  |   |   | 2,644,000  |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Cash Flows From Investing Activities:                                              |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Purchase of
 furniture, equipment and leasehold improvements                       |  |                         | (906,000   | )    |   | (150,000   | ) |   | (128,000   | )
|Collection
 (Payment) of advances made to equity investees                         |  |                         | (133,000   | )    |   | 37,000     |   |   | (373,000   | )
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Net cash used in investing
activities                                              |  |                         | (1,039,000 | )    |   | (113,000   | ) |   | (501,000   | )
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Cash Flows From Financing Activities:                                              |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Dividend on
 common stock                                                          |  |                         | (560,000   | )    |   | (359,000   | ) |   |            |  
|Purchase of
 treasury shares                                                       |  |                         |            |      |   | (367,000   | ) |   | (44,000    | )
|Proceeds
 from exercise of options                                                 |  |                         | 27,000     |      |   | 449,000    |   |   | 133,000    |  
|Tax benefit
 of exercised employee stock options                                   |  |                         | 2,000      |      |   | 51,000     |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Net cash (used in) provided by financing
 activities                               |  |                         | (531,000   | )    |   | (226,000   | ) |   | 89,000     |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Net increase
 in cash and cash equivalents                                         |  |                         | 1,983,000  |      |   | 1,626,000  |   |   | 2,232,000  |  
|Cash and
 cash equivalents - beginning of year                                     |  |                         | 32,606,000 |      |   | 30,980,000 |   |   | 28,748,000 |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Cash and cash equivalents - end of year                                            |  | $                       | 34,589,000 |      | $ | 32,606,000 |   | $ | 30,980,000 |  
|                                                                                   |  |                         |            |      |   |            |   |   |            |  
|Supplemental Cash Flow Disclosures:                                                |  |                         |            |      |   |            |   |   |            |  
|Cash paid for:                                                                     |  |                         |            |      |   |            |   |   |            |  
|Interest                                                                           |  |                         |            |      | $ |            |   | $ | 1,000      |  
|Income taxes                                                                       |  | $                       | 2,087,000  |      | $ | 2,444,000  |   | $ | 812,000    |  

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:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 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 all uniquely
 devoted to womens financial needs. 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 and related derivatives
 transactions is being conducted by Siebert Brandford Shank & Co., LLC
 (SBS), and SBS Financial Products Company, LLC (SBSFP), investees, which
 are accounted for by the equity method of accounting (see Note C). The equity
 method provides that Siebert record 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 Transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Securities
 transactions trading profits, commission revenues and related clearing
 expenses are recorded on a trade date basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Marketable
 securities are valued at market value. Interest is recorded on an accrual
 basis. Dividends are recorded on the ex-dividend date. Siebert
 clears all its security transactions through two 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, which are highly capitalized.                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|[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.
 Financial files a consolidated federal income tax return, which includes
 Siebert and WFN.                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|[4] | Furniture, Equipment and Leasehold Improvements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Property and
 equipment is stated at cost less accumulated depreciation. 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:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Cash
 equivalents consist of highly liquid investments purchased with original
 maturity of three months or less including money market funds and commercial
 paper.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|[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.                                                                                                                                                                                        

F-6

---



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

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[8]  | Earnings Per Share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | Basic
 earnings per share is calculated by dividing net income 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, 2006 and 2005 amounted to 67,204,
 123,285 and 34,571 additional shares, respectively, added to the basic
 weighted average outstanding shares of 22,206,346, 22,129,566 and 22,093,369
 in those respective years. In 2007, 2006 and 2005, 1,162,500,
 1,288,466 and 1,683,675 common shares, respectively, issuable upon the
 exercise of options were not included in the computation of diluted income
 per share as the effect would have been anti-dilutive.                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|[9]  | Investment Banking:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|[10] | Cash Equivalents - Restricted:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | Cash
 equivalents - restricted represents $1,300,000 of cash invested in a money
 market account which Siebert is obligated to lend to SBS on a subordinated
 basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | Any outstanding
 amounts loaned bear interest at 8% per annum and are repayable on August 31,
 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|[11] | Stock-Based Compensation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | In December
 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123R
 Share-Based Payment (SFAS 123R), which requires all share-based payments
 to employees, including grants of employee stock options, to be recognized in
 the statement of operations as an operating expense, based on their fair
 values on grant date. Prior to the adoption of SFAS 123R the Company
 accounted for stock based compensation using the intrinsic value method. The
 Company adopted the provision of SFAS No. 123R effective January 1, 2006,
 using the modified prospective transition method. Under the modified
 prospective method, non-cash compensation expense is recognized for the
 portion of outstanding stock option awards granted prior to the adoption of
 SFAS 123R for which service has not been rendered, and for any future stock
 option grants. Accordingly, periods prior to adoption have not been restated.
 The Company recognizes share-based compensation costs on a straight-line
 basis over the requisite service periods of awards as compensation expense which would normally be the
 vesting period of the options.

As a result of
adopting SFAS No. 123R, the Companys income before income tax and net income
for the year ended December 31, 2006 was $158,000 and $93,000, lower than if it
had continued to account for share-based compensation by the intrinsic value
method. There was no effect on earnings per share. During 2006, 162,644 options
were exercised with an intrinsic value of $123,000. Prior to the adoption of
SFAS No. 123R, the Company presented cash flows resulting from the tax benefits
of deductions from the exercise of stock options as operating cash flows in the
Statement of Cash Flows. Since the adoption of SFAS No. 123R, 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. The following
table illustrates the effect on net income and earnings per share if the fair
value based method had been applied to the year ended December 31, 2005. Net income,
  as reported

$
1,863,000Stock-based
  employee compensation determined under the fair value-based method, prior to
  the adoption of SFAS 123R


(424,000
)Pro forma
  net income

$
1,439,000Net income
  per share  basic:As reported

$
.08Pro forma

$
.07Net income
  per share  diluted:As reported

$
.08Pro forma

$
.07


F-7

---



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | As of
 December 31, 2007, there were $81,000 of unrecognized compensation costs
 related to unvested options which are expected to be recognized over a
 weighted-average period of 4 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|[12] | Intangibles:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | Purchased
 intangibles are principally being amortized using the straight-line method
 over estimated useful lives of three to five years (see Note E).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|[13] | 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.                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|[14] | New Accounting Standards:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | In June
 2006, the Financial Accounting Standards Board (FASB) Issued FASB
 Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
 interpretation of FASB statement No. 109 (FIN 48). Fin 48 clarifies the
 accounting for uncertainties in income taxes recognized in a companys
 financial statements in accordance with Statement 109 and prescribes a
 recognition threshold and measurement attributes for tax positions taken or
 expected to be taken on a tax return. Additionally, FIN 48 provides guidance
 on derecognition, classification, interest and penalties, accounting in
 interim periods, disclosure and transition. We adopted the provisions of FIN
 48 as of January 1, 2007. The adoption of FIN 48 did not impact our financial
 position, results of operations or cash flows. Pursuant to FIN 48, we opted
 to classify interest and penalties that would accrue according to the
 provisions of relevant tax law as interest and other general and
 administrative expenses.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | In September
 2006, the Financial Accounting Standards Board issued SFAS No. 157 (SFAS
 157), Fair Value Measurements. SFAS 157 defines fair value and establishes
 a framework for measuring fair value. It also expands the disclosures about
 the use of fair value to measure assets and liabilities. SFAS 157 is
 effective as of the beginning of an entitys first fiscal year that begins after November 15,
 2007. The Company expects that adoption of SFAS 157 will not have a material
 effect on its financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | In February
 2007, the FASB issued Statement of Financial Accounting Standards No. 159,
 The Fair Value Option for Financial Assets and Financial Liabilities (FAS
 159). The fair value option established by FAS 159 permits, but does not
 require, all entities to choose to measure eligible items at fair value at
 specified election dates. An entity would report unrealized gains and losses
 on items for which the fair value option has been elected in earnings at each
 subsequent reporting date. FAS 159 is effective as of the beginning of an
 entitys first fiscal year that begins after November 15, 2007. The Company
 does not expect the adoption of FAS 159 will have a material impact on its
 financial statements.                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | In November
 2005, the FASB issued FASB Staff Position FSP 115-1 which addresses the
 determination as to when an investment is considered impaired, whether that
 impairment is other-than-temporary, and the measurement of an impairment
 loss. This FSP also includes accounting considerations subsequent to the
 recognition of an other-than-temporary impairment and requires certain disclosures
 about unrealized losses that have not been recognized as
 other-than-temporary impairments. The guidance in this FSP amends Statement
 of Financial Accounting Standards No. 115, Accounting for Certain Investments
 in Debt and Equity Securities and APB Opinion No. 18, The Equity Method of
 Accounting for Investments in Common Stock. The Guidance in FSP 115-1 is
 applied to reporting periods beginning after December 15, 2005. The Company
 adopted this standard effective January 1, 2006 and it did not have a
 material impact on its financial statements or disclosures.                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | In December
 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations, (FAS
 141R). FAS 141R establishes principles and requirements for how an acquirer
 recognizes and measures in its financial statements the identifiable assets
 acquired, including goodwill, the liabilities assumed and any non-controlling
 interest in the acquiree. The Statement also establishes disclosure
 requirements to enable users of the financial statements to evaluate the
 nature and financial effects of the business combination. FAS 141R is
 effective for business combinations for which the acquisition date is on or
 after the beginning of the first annual reporting period beginning on or
 after December 15, 2008. The impact of adopting FAS 141R will be dependent on
 the future business combinations that the Company may pursue after its
 effective date.                                                                                                                                    

F-8

---



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | In December
 2007, the FASB issued Statement of Financial Accounting Standards No. 160,
 Noncontrolling Interests in Consolidated Financial Statements-an amendment of
 ARB No. 51 (FAS 160). This standard establishes accounting and reporting
 standards for the noncontrolling interest in a subsidiary and for the
 deconsolidation of a subsidiary. The guidance will become effective as of the
 beginning of the Companys fiscal year beginning after December 15, 2008.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|[15] | Reclassification  In 2007, income from equity
investees has been classified as a separate item in operations and no longer
reflected in revenues. The 2006 and 2005 income statements have been
reclassified to confirm with the current year presentation.                                                                                                                                                                                                                     

NOTE
B - INTUIT LAWSUIT

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.

NOTE
C - INVESTMENT IN AFFILIATES

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

|                              |  |     |           |        |   |         |  |   |           | 
|----------------------------- |  | --- | --------- | ------ | - | ------- |  | - | --------- | 
|December
 31, 2007            |  | SBS |           | SBSFPC |   | TOTAL   | 
|                              |  |     |           |        |   |         | 
|                              |  |     |           |        |   |         | 
|Investment
 and advances      |  | $   | 5,055,000 |        | $ | 847,000 |  | $ | 5,902,000 | 
|                              |  |     |           |        |   |         |  |   |           | 
|Income from
 equity investees |  | $   | 1,391,000 |        | $ | 41,000  |  | $ | 1,432,000 | 
|                              |  |     |           |        |   |         |  |   |           | 
|Distributions                 |  | $   | 1,780,000 |        | $ | 648,000 |  | $ | 2,428,000 | 
|                              |  |     |           |        |   |         |  |   |           | 

|                               |  |     |           |        |   |           |  |   |           | 
|------------------------------ |  | --- | --------- | ------ | - | --------- |  | - | --------- | 
|December
 31, 2006             |  | SBS |           | SBSFPC |   | TOTAL     | 
|                               |  |     |           |        |   |           | 
|                               |  |     |           |        |   |           |  |   |           | 
|Investment
 and advances       |  | $   | 5,307,000 |        | $ | 1,458,000 |  | $ | 6,765,000 | 
|                               |  |     |           |        |   |           |  |   |           | 
|Income from
 equity investees  |  | $   | 2,885,000 |        | $ | 916,000   |  | $ | 3,801,000 | 
|                               |  |     |           |        |   |           |  |   |           | 
|Distributions                  |  | $   | 1,378,000 |        | $ | 49,000    |  | $ | 1,427,000 | 
|                               |  |     |           |        |   |           |  |   |           | 
|                              
|December 31, 2005              |  |     | SBS       |        |   | SBSFPC    |  |   | TOTAL     | 
|                               |  |     |           |        |   |           | 
|                              
|Income from
  equity investees |  | $   | 1,656,000 |        | $ | 193,000   |  | $ | 1,849,000 | 
|                               |  |     |           |        |   |           |  |   |           | 
|Distributions                  |  | $   | 1,567,000 |        | $ | 6,000     |  | $ | 1,573,000 | 
|                               |  |     |           |        |   |           |  |   |           | 

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.

Financial entered into an
Operating Agreement, effective as of April 19, 2005 (the Operating
Agreement), with the Principals  for
the formation of SBSFPC. Pursuant to the terms of the Operating Agreement,
Financial 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 be shared 66.66% by the Principals and
33.33% by Financial.

F-9

---



NOTEC - INVESTMENTINAFFILIATES(CONTINUED)

Summarized financial data of
SBS is as follows:

|                                                                                              |  |      |            |      |   |            |  |   |            | 
|--------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                                                              |  | 2007 |            | 2006 |   | 2005       | 
|                                                                                              |  |      |            |      |   |            | 
|                                                                                              |  |      |            |      |   |            |  |   |            | 
|Total assets, including secured demand note of 1,200,000 in each year
 due from Siebert       |  | $    | 17,885,000 |      | $ | 19,250,000 |  | $ |            | 
|Total liabilities, including subordinated liabilities $1,200,000 in
 each year due to Siebert |  |      | 7,984,000  |      |   | 8,556,000  |  |   |            | 
|Total members capital                                                                        |  |      | 9,901,000  |      |   | 10,694,000 |  |   |            | 
|Total revenue                                                                                 |  |      | 24,426,000 |      |   | 26,235,000 |  |   | 21,086,000 | 
|Net income                                                                                    |  |      | 2,840,000  |      |   | 5,888,000  |  |   | 3,377,000  | 
|Regulatory minimum net
 capital requirement                                                   |  |      | 452,000    |      |   | 490,000    |  |   |            | 

During each of 2007, 2006
and 2005, Siebert charged SBS $240,000 for rent and general and administrative
services, which Siebert believes approximates the cost of furnishing such
services. In addition, during each of the years 2007, 2006 and 2005, Siebert
earned interest income of $96,000, $96,000 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 $74,000, $67,000 and $52,000. (See Note J)

Sieberts share of
undistributed earnings from SBS amounts to $4,459,000 and $4,848,000 at December
31, 2007 and 2006, 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:

|                       |  |      |            |      |   |            |  |   |           | 
|---------------------- |  | ---- | ---------- | ---- | - | ---------- |  | - | --------- | 
|                       |  | 2007 |            | 2006 |   | 2005       | 
|                       |  |      |            |      |   |            | 
|                       |  |      |            |      |   |            |  |   |           | 
|Total assets           |  | $    | 82,772,000 |      | $ | 49,209,000 |  |   |           | 
|Total liabilities      |  |      | 80,225,000 |      |   | 44,842,000 |  |   |           | 
|Total members capital |  |      | 2,546,000  |      |   | 4,367,000  |  |   |           | 
|Total revenue          |  |      | 680,000    |      |   | 5,495,000  |  | $ | 1,185,000 | 
|Net income             |  |      | 123,000    |      |   | 2,750,000  |  |   | 582,000   | 

Sieberts share of
undistributed earnings of SBSFPC amounts to $449,000 and $1,058,000 at December
31, 2007 and 2006, respectively.

F-10

---



NOTED - FURNITURE, EQUIPMENTANDLEASEHOLDIMPROVEMENTS, NET

Furniture, equipment and
leasehold improvements consist of the following:

|                                                |  |               |           |      |   |            |  
|----------------------------------------------- |  | ------------- | --------- | ---- | - | ---------- | -
|                                                |  | December
 31, |          
|                                                |  |               |          
|                                                |  | 2007          |           | 2006 |  
|                                                |  |               |           |      |  
|                                                |  |               |           |      |   |            |  
|Equipment                                       |  | $             | 1,363,000 |      | $ | 2,122,000  |  
|Leasehold improvements                          |  |               | 129,000   |      |   | 162,000    |  
|Furniture and fixtures                          |  |               | 41,000    |      |   | 21,000     |  
|                                                |  |               |           |      |   |            |  
|                                                |  |               |           |      |   |            |  
|                                                |  |               | 1,533,000 |      |   | 2,305,000  |  
|Less accumulated
 depreciation and amortization |  |               | (496,000  | )    |   | (1,795,000 | )
|                                                |  |               |           |      |   |            |  
|                                                |  |               |           |      |   |            |  
|                                                |  | $             | 1,037,000 |      | $ | 510,000    |  
|                                                |  |               |           |      |   |            |  

Depreciation and
amortization expense for the years ended December 31, 2007, 2006 and 2005
amounted to $379,000, $468,000 and $605,000, respectively.

NOTEE - INTANGIBLEASSETS, NET

In several transactions
during September and October of 2000, 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, 2007       |           | December 31, 2006         |  
|                                   |  |                         |           |                           |  
|                                   |  |                         |           |                           |  
|                                   |  | Gross
 Carrying
 Amount |           | Accumulated
 Amortization |   | Gross
 Carrying
 Amount |  | Amortization
 Accumulated |          
|                                   |  |                         |           |                           |   |                         |  |                           |          
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Amortizable assets:                |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Website, content and
 non-compete  |  | $                       | 2,350,000 |                           | $ | 2,350,000               |  | $                         | 2,350,000 |  | $ | 2,350,000 | 
|Retail brokerage accounts          |  |                         | 2,588,000 |                           |   | 2,467,000               |  |                           | 2,588,000 |  |   | 2,156,000 | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  | $                       | 4,938,000 |                           | $ | 4,817,000               |  | $                         | 4,938,000 |  | $ | 4,506,000 | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Unamortized intangible
 assets:    |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Domain name/intellectual
 property |  | $                       | 750,000   |                           |   |                         |  | $                         | 750,000   |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Amortization expense               |  |                         |           |                           | $ | 311,000                 |  |                           |           |  | $ | 312,000   | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 

Estimated amortization
expense is as follows:

|                          |  |  |   |         | 
|------------------------- |  |  | - | ------- | 
|Year Ending
 December 31, |  |  |   |         | 
|                          |  |  |   |         | 
|2008                      |  |  | $ | 101,000 | 
|2009                      |  |  |   | 20,000  | 
|                          |  |  |   |         | 
|                          |  |  |   |         | 
|                          |  |  | $ | 121,000 | 
|                          |  |  |   |         | 

F-11

---



NOTEF - INCOMETAXES

Income tax provision
consists of the following:

|                                          |  |                         |           |      |   |           |   |   |           |  
|----------------------------------------- |  | ----------------------- | --------- | ---- | - | --------- | - | - | --------- | -
|                                          |  | Year Ended December 31, |          
|                                          |  |                         |          
|                                          |  | 2007                    |           | 2006 |   | 2005      |  
|                                          |  |                         |           |      |   |           |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|Federal income tax
 provision (benefit):  |  |                         |           |      |   |           |   |   |           |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|Current                                   |  | $                       | 1,356,000 |      | $ | 2,049,000 |   | $ | 1,080,000 |  
|Deferred                                  |  |                         | (32,000   | )    |   | (183,000  | ) |   | (81,000   | )
|                                          |  |                         |           |      |   |           |   |   |           |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|                                          |  |                         | 1,324,000 |      |   | 1,866,000 |   |   | 999,000   |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|State and local tax
 provision (benefit): |  |                         |           |      |   |           |   |   |           |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|Current                                   |  |                         | 456,000   |      |   | 661,000   |   |   | 370,000   |  
|Deferred                                  |  |                         | (7,000    | )    |   | (43,000   | ) |   | (19,000   | )
|                                          |  |                         |           |      |   |           |   |   |           |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|                                          |  |                         | 449,000   |      |   | 618,000   |   |   | 351,000   |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|Total tax provision
 (benefit):           |  |                         |           |      |   |           |   |   |           |  
|Current                                   |  |                         | 1,812,000 |      |   | 2,710,000 |   |   | 1,450,000 |  
|Deferred                                  |  |                         | (39,000   | )    |   | (226,000  | ) |   | (100,000  | )
|                                          |  |                         |           |      |   |           |   |   |           |  
|                                          |  |                         |           |      |   |           |   |   |           |  
|                                          |  | $                       | 1,773,000 |      | $ | 2,484,000 |   | $ | 1,350,000 |  
|                                          |  |                         |           |      |   |           |   |   |           |  

A reconciliation between the
income tax provision and income taxes computed by applying the statutory
Federal income tax rate to income before taxes is as follows:

|                                                                   |  |                         |           |      |   |            |   |   |           | 
|------------------------------------------------------------------ |  | ----------------------- | --------- | ---- | - | ---------- | - | - | --------- | 
|                                                                   |  | Year Ended December 31, |          
|                                                                   |  |                         |          
|                                                                   |  | 2007                    |           | 2006 |   | 2005       |  
|                                                                   |  |                         |           |      |   |            |  
|                                                                   |  |                         |           |      |   |            |   |   |           | 
|Expected income tax
 provision at statutory Federal tax rate (34%) |  | $                       | 1,370,000 |      | $ | 2,009,000  |   | $ | 1,092,000 | 
|State and local taxes, net
 of Federal tax benefit                 |  |                         | 296,000   |      |   | 408,000    |   |   | 258,000   | 
|Permanent difference                                               |  |                         | 72,000    |      |   | 100,000    |   |   |           | 
|Other                                                              |  |                         | 35,000    |      |   | (33,000    | ) |   |           | 
|                                                                   |  |                         |           |      |   |            |   |   |           | 
|                                                                   |  |                         |           |      |   |            |   |   |           | 
|Income tax expense                                                 |  | $                       | 1,773,000 |      | $ | 2,484,0000 |   | $ | 1,350,000 | 
|                                                                   |  |                         |           |      |   |            |   |   |           | 

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, |         
|                                                 |  |              |         
|                                                 |  | 2007         |          | 2006 |  
|                                                 |  |              |          |      |  
|                                                 |  |              |          |      |   |          |  
|Net operating losses                             |  | $            | 339,000  |      | $ | 377,000  |  
|Acquired Intangible assets                       |  |              | (304,000 | )    |   | (315,000 | )
|Furniture, equipment and
 leasehold improvements |  |              | 182,000  |      |   | 81,000   |  
|Retail brokerage accounts                        |  |              | 650,000  |      |   | 684,000  |  
|                                                 |  |              |          |      |   |          |  
|                                                 |  |              |          |      |   |          |  
|                                                 |  | $            | 867,000  |      | $ | 827,000  |  
|                                                 |  |              |          |      |   |          |  

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.

Net operating
loss carryforwards of $836,000 at December 31, 2007, which are attributable to
WFN, expire through 2020. Utilization of such net operating loss carryforwards
is subject to annual limitations under Section 382 of the Internal Revenue
Code.

In 2007 and 2006, the
Company reduced current taxes payable by $2,000 and $51,000, respectively, 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.

The Company is not subject to any tax examinations for any federal or major state tax jurisdiction for years prior to 2004.

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, 2007 and 2006, Siebert had net capital
of approximately $29,459,000 and $27,723,000, 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.

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.

On August 9, 2006, the Board of
Directors declared a dividend of eight cents per share on common stock of the
Company, which was paid on August 30, 2006 to shareholders of record at the
close of business on August 21, 2006. The Chief Executive Officer of the
Company waived the right to receive the dividend in excess of the aggregate
amount paid to other shareholders which amounted to approximately $180,000.

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 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, 2007, options for 2,000,000
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 transaction for the three years ended December 31,
2007 is presented below:

|                                                 |     |        |           |                                       |   |        |  |                                       |           |        |   |                                       |  |  |           |   |   |      | 
|------------------------------------------------ | --- | ------ | --------- | ------------------------------------- | - | ------ |  | ------------------------------------- | --------- | ------ | - | ------------------------------------- |  |  | --------- | - | - | ---- | 
|                                                 |     | 2007   |           | 2006                                  |   | 2005   | 
|                                                 |     |        |           |                                       |   |        | 
|                                                 |     | Shares |           | Weighted
  Average
  Exercise
  Price |   | Shares |  | Weighted
  Average
  Exercise
  Price |           | Shares |   | Weighted
  Average
  Exercise
  Price | 
|                                                 |     |        |           |                                       |   |        |  |                                       |           |        |   |                                       | 
|                                                
|Outstanding - beginning of the year              |     |        | 1,603,966 |                                       | $ | 4.16   |  |                                       | 1,768,610 |        | $ | 4.16                                  |  |  | 1,889,350 |   | $ | 4.11 | 
|Granted                                          |     |        |           |                                       |   |        |  |                                       | 25,000    |        | $ | 2.75                                  |  |  | 200,000   |   | $ | 2.81 | 
|Forfeited                                        |     |        | (126,966  | )                                     | $ | 4.36   |  |                                       | (27,000   | )      | $ | 4.03                                  |  |  | (265,255  | ) | $ | 3.13 | 
|Exercised                                        |     |        | (9,800    | )                                     | $ | 2.70   |  |                                       | (162,644  | )      | $ | 2.76                                  |  |  | (55,485   | ) | $ | 0.00 | 
|                                                 |     |        |           |                                       |   |        |  |                                       |           |        |   |                                       |  |  |           |   |   |      | 
|                                                
|Outstanding - end of year                        | (a) |        | 1,467,200 |                                       | $ | 4.28   |  |                                       | 1,603,966 |        | $ | 4.16                                  |  |  | 1,768,610 |   | $ | 4.16 | 
|                                                 |     |        |           |                                       |   |        |  |                                       |           |        |   |                                       |  |  |           |   |   |      | 
|                                                
|Fully vested and expected to vest at year
  end  | (b) |        | 1,422,200 |                                       | $ | 4.30   |  |                                       |           |        |   |                                       |  |  |           |   |   |      | 
|                                                 |     |        |           |                                       |   |        |  |                                       |           |        |   |                                       |  |  |           |   |   |      | 
|                                                
|Exercisable at end of year                       | (b) |        | 1,422,200 |                                       | $ | 4.30   |  |                                       | 1,520,466 |        | $ | 4.32                                  |  |  | 1,613,410 |   | $ | 4.14 | 
|                                                 |     |        |           |                                       |   |        |  |                                       |           |        |   |                                       |  |  |           |   |   |      | 
|                                                
|Weighted average fair value of options
  granted |     |        |           |                                       |   |        |  |                                       |           |        | $ | 1.85                                  |  |  |           |   | $ | 1.42 | 

|    |                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------
|(a) | Weighted
  average remaining contractual terms of 4 years and aggregate intrinsic value
  of $146,000.  
|    |                                                                                                         
|(b) | Weighted
  average remaining contractual terms of 3.9 years and aggregate intrinsic
  value of $136,000.

As of December
31, 2007, there was $81,000 of unrecognized compensation costs related to
unvested options which is expected to be recognized over a weighted-average
period of 4 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 for the
years ended December 31, 2006 and 2005:

|                           |  |      |  |       |   |  |  |  |       |   | 
|-------------------------- |  | ---- |  | ----- | - |  |  |  | ----- | - | 
|                           |  | 2006 |  | 2005  |  
|                           |  |      |  |       |  
|                          
|Dividend
  yield           |  |      |  | 0.00  | % |  |  |  | 0.00  | % | 
|Expected
  volatility      |  |      |  | 50.40 | % |  |  |  | 53.00 | % | 
|Risk-free
  interest rate  |  |      |  | 4.82  | % |  |  |  | 4.30  | % | 
|Expected
  life (in years) |  |      |  | 7.5   |   |  |  |  | 5.00  |   | 

During 2006, the Company
took into consideration guidance contained in SFAS No. 123R and SAB No. 107
when reviewing and developing assumptions for the option grants. The weighted
average expected life reflects the alternative simplified method permitted by
SAB No. 107, 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. Expected volatility is based on historical volatility over the
expected term.

NOTE I -
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK

In the normal
course of business, Siebert enters into transactions in various financial
instruments with off-balance sheet risk. This risk includes both market and
credit risk, which may be in excess of the amounts recognized in the statement
of financial condition. As of December 31, 2007 and 2006, no such financial istruments were outstanding.

F-14

---



Retail
customer transactions are cleared through clearing brokers on a fully disclosed
basis. In the event that customers are unable to 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 customers obligations. Securities transactions entered into as of
December 31, 2007 settled with no adverse effect on Sieberts financial
condition. Siebert regularly monitors the activity in its customer accounts for
compliance with its margin requirements.

NOTE J - COMMITMENTS, CONTINGENCIES AND OTHER

Siebert
terminated the fully disclosed clearing agreement (the Clearing Agreement)
with Pershing LLC (formerly the Pershing division of Donaldson, Lufkin &
Jenrette Securities Corporation) (Pershing) in 2003. Based on consultation
with counsel, Siebert believes that the $1,500,000 that it advanced to Pershing
in January 2003 should have been returned and that Pershing may be liable for
damages. Pershing 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. Siebert believes
the Pershing claims are without merit and that the ultimate outcome of this
matter will not have a material adverse effect on the Companys results of
operations or financial position.

The Company
rents discount retail brokerage and other office space under long-term
operating leases expiring in various periods through 2011. 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 |          
|                           |  |  |        |          
|                           |  |  |        |          
|2008                       |  |  |        | 1,105,000
|2009                       |  |  |        | 905,000  
|2010                       |  |  |        | 709,000  
|2011                       |  |  |        | 172,000  
|2012                       |  |  |        | 68,000   
|                           |  |  |        |          
|                           |  |  |        |          
|                           |  |  | $      | 2,959,000
|                           |  |  |        |          

Rent expense,
including escalations for operating costs, amounted to approximately
$1,314,000, $1,071,000 and $985,000 for the years ended December 31, 2007, 2006
and 2005, respectively. Rent is being charged to expense over the entire lease
term on a straight-line basis.

In addition to
the Pershing matter, 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 believes that adequate provisions have
been made for such matters.

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 2007, 2006 and 2005.

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 $1,300,000.

F-15

---



NOTE K  FAIR VALUE OF FINANCIAL INSTRUMENTS

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.

NOTE L - SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)

|                    |  |                |           |                 |   |                |  |                 |           |                |   |                 |     |                |           |                 |   |           |  |   |           |  |   |           | 
|------------------- |  | -------------- | --------- | --------------- | - | -------------- |  | --------------- | --------- | -------------- | - | --------------- | --- | -------------- | --------- | --------------- | - | --------- |  | - | --------- |  | - | --------- | 
|                    |  | 2007           |           | 2006            |  
|                    |  |                |           |                 |  
|                    |  | First
 Quarter |           | Second
 Quarter |   | Third
 Quarter |  | Fourth
 Quarter |           | First
 Quarter |   | Second
 Quarter |     | Third
 Quarter |           | Fourth
 Quarter |  
|                    |  |                |           |                 |   |                |  |                 |           |                |   |                 |     |                |           |                 |  
|Revenue             |  | $              | 8,072,000 |                 | $ | 8,139,000      |  | $               | 7,450,000 |                | $ | 10,253,000      | (a) | $              | 7,830,000 |                 | $ | 8,856,000 |  | $ | 7,732,000 |  | $ | 8,201,000 | 
|Net income          |  | $              | 985,000   |                 | $ | 716,000        |  | $               | (595,000  | )              | $ | 1,152,000       | (a) | $              | 552,000   |                 | $ | 1,341,000 |  | $ | 897,000   |  | $ | 635,000   | 
|Earnings per share: |  |                |           |                 |   |                |  |                 |           |                |   |                 |     |                |           |                 |   |           |  |   |           |  |   |           | 
|Basic               |  | $              | 0.04      |                 | $ | 0.03           |  | $               | (0.03     | )              | $ | 0.05            |     | $              | 0.02      |                 | $ | 0.06      |  | $ | 0.04      |  | $ | 0.03      | 
|Diluted             |  | $              | 0.04      |                 | $ | 0.03           |  | $               | (0.03     | )              | $ | 0.05            |     | $              | 0.02      |                 | $ | 0.06      |  | $ | 0.04      |  | $ | 0.03      | 

(a) Includes $2,024,000 gain from settlement of lawsuit (See Note B).

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, 2007 and 2006, and the
related statements of operations, changes in members capital, and cash flows
for each of the years in the three-year period ended December 31, 2007. 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 auditing standards generally accepted in  the United States of America as established
by the Auditing Standards Board (United States) and in accordance with the auditing standards
of  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, 2007 and 2006, and the results of its operations changes in members capital,
and its cash flows for each of the years in the three-year period ended
December 31, 2007 in conformity with  accounting
principles generally accepted in the United States of America.

/s/ Eisner LLP

New York, New
York 
February 26, 2008

F-17

---



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

Statements of Financial Condition

|                                      |  |              |            |      |   |            | 
|------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | 
|                                      |  | December 31, |           
|                                      |  |              |           
|                                      |  | 2007         |            | 2006 |  
|                                      |  |              |            |      |  
|                                     
|ASSETS                                |  |              |            |      |   |            | 
|Cash and cash equivalents             |  | $            | 11,651,394 |      | $ | 9,916,728  | 
|Securities owned, at market value     |  |              | 180,871    |      |   |            | 
|Accounts receivable                   |  |              | 1,354,222  |      |   | 1,311,516  | 
|Receivable from affiliate             |  |              | 55,345     |      |   | 10,909     | 
|Receivable from broker                |  |              | 2,734,082  |      |   | 6,153,128  | 
|Secured demand note                   |  |              | 1,200,000  |      |   | 1,200,000  | 
|Furniture and equipment, net          |  |              | 204,190    |      |   | 194,745    | 
|Other assets                          |  |              | 504,608    |      |   | 462,636    | 
|                                      |  |              |            |      |   |            | 
|                                     
|                                      |  | $            | 17,884,712 |      | $ | 19,249,662 | 
|                                      |  |              |            |      |   |            | 
|                                     
|LIABILITIES AND MEMBERS CAPITAL      |  |              |            |      |   |            | 
|Liabilities:                          |  |              |            |      |   |            | 
|Payable to affiliate                  |  | $            | 188,581    |      | $ | 55,556     | 
|Accounts payable and accrued expenses |  |              | 6,595,662  |      |   | 7,300,510  | 
|                                      |  |              |            |      |   |            | 
|                                     
|                                      |  |              | 6,784,243  |      |   | 7,356,066  | 
|                                      |  |              |            |      |   |            | 
|Subordinated debt                     |  |              | 1,200,000  |      |   | 1,200,000  | 
|Commitments - Note E                  |  |              |            |      |   |            | 
|Members capital                      |  |              | 9,900,469  |      |   | 10,693,596 | 
|                                      |  |              |            |      |   |            | 
|                                     
|                                      |  | $            | 17,884,712 |      | $ | 19,249,662 | 
|                                      |  |              |            |      |   |            | 

See Notes to Financial Statements

F-18

---



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

Statements of Operations

|                                   |  |                         |            |      |   |            |  |   |            | 
|---------------------------------- |  | ----------------------- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                   |  | Year Ended December 31, |           
|                                   |  |                         |           
|                                   |  | 2007                    |            | 2006 |   | 2005       | 
|                                   |  |                         |            |      |   |            | 
|Revenues:                          |  |                         |            |      |   |            |  |   |            | 
|Investment banking                 |  | $                       | 20,942,441 |      | $ | 22,175,826 |  | $ | 18,085,786 | 
|Trading profits                    |  |                         | 2,896,590  |      |   | 3,315,250  |  |   | 2,597,064  | 
|Interest and other                 |  |                         | 586,643    |      |   | 743,533    |  |   | 403,260    | 
|                                   |  |                         |            |      |   |            |  |   |            | 
|                                  
|                                   |  |                         | 24,425,674 |      |   | 26,234,609 |  |   | 21,086,110 | 
|                                   |  |                         |            |      |   |            |  |   |            | 
|                                   |  |                         |            |      |   |            |  |   |            | 
|Expenses:                          |  |                         |            |      |   |            |  |   |            | 
|Employee compensation and benefits |  |                         | 16,208,308 |      |   | 15,563,860 |  |   | 12,890,686 | 
|Clearing fees                      |  |                         | 552,552    |      |   | 365,216    |  |   | 370,003    | 
|Communications                     |  |                         | 635,037    |      |   | 593,246    |  |   | 539,191    | 
|Occupancy                          |  |                         | 661,172    |      |   | 655,677    |  |   | 640,666    | 
|Professional fees                  |  |                         | 97,276     |      |   | 290,797    |  |   | 633,137    | 
|Interest                           |  |                         | 96,000     |      |   | 96,000     |  |   | 96,000     | 
|State and local income tax         |  |                         | 324,571    |      |   | 182,004    |  |   | 151,214    | 
|General and administrative         |  |                         | 3,011,081  |      |   | 2,599,982  |  |   | 2,388,043  | 
|                                   |  |                         |            |      |   |            |  |   |            | 
|                                   |  |                         |            |      |   |            |  |   |            | 
|                                   |  |                         | 21,585,997 |      |   | 20,346,782 |  |   | 17,708,940 | 
|                                   |  |                         |            |      |   |            |  |   |            | 
|                                   |  |                         |            |      |   |            |  |   |            | 
|Net income                         |  | $                       | 2,839,677  |      | $ | 5,887,827  |  | $ | 3,377,170  | 
|                                   |  |                         |            |      |   |            |  |   |            | 

See Notes to Financial Statements

F-19

---



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

Statements of Changes in Members Capital

|                            |  |   |            |  
|--------------------------- |  | - | ---------- | -
|Balance - January 1, 2005   |  | $ | 7,444,390  |  
|Distributions
  to members  |  |   | (3,202,770 | )
|Net income                  |  |   | 3,377,170  |  
|                            |  |   |            |  
|                            |  |   |            |  
|Balance - December 31, 2005 |  |   | 7,618,790  |  
|Distributions
  to members  |  |   | (2,813,021 | )
|Net income                  |  |   | 5,887,827  |  
|                            |  |   |            |  
|                            |  |   |            |  
|Balance - December 31, 2006 |  |   | 10,693,596 |  
|Distributions
  to members  |  |   | (3,632,804 | )
|Net income                  |  |   | 2,839,677  |  
|                            |  |   |            |  
|                            |  |   |            |  
|Balance - December 31, 2007 |  | $ | 9,900,469  |  
|                            |  |   |            |  

See Notes to Financial Statements

F-20

---



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

Statements of Cash Flows

|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|----------------------------------------------------------------------------------- |  | ----------------------- | ---------- | ---- | - | ---------- | - | - | ---------- | -
|                                                                                    |  | Year Ended December 31, |           
|                                                                                    |  |                         |           
|                                                                                    |  | 2007                    |            | 2006 |   | 2005       |  
|                                                                                    |  |                         |            |      |   |            |  
|Cash flows from operating activities:                                               |  |                         |            |      |   |            |   |   |            |  
|Net income                                                                          |  | $                       | 2,839,677  |      | $ | 5,887,827  |   | $ | 3,377,170  |  
|Adjustments to reconcile net income to net
  cash provided by operating activities: |  |                         |            |      |   |            |   |   |            |  
|Depreciation and amortization                                                       |  |                         | 76,358     |      |   | 77,491     |   |   | 68,824     |  
|Changes in:                                                                         |  |                         |            |      |   |            |   |   |            |  
|Securities owned, at market value                                                   |  |                         | (180,871   | )    |   | 580,145    |   |   | (570,134   | )
|Accounts receivable                                                                 |  |                         | (42,706    | )    |   | (291,222   | ) |   | 487,692    |  
|Receivable from broker                                                              |  |                         | 3,419,046  |      |   | (5,985,081 | ) |   | (160,569   | )
|Other assets                                                                        |  |                         | (41,972    | )    |   | (47,900    | ) |   | (71,305    | )
|Payable to (receivable from) affiliate                                              |  |                         | 88,589     |      |   | (35,258    | ) |   | (45,983    | )
|Accounts payable and accrued expenses                                               |  |                         | (704,848   | )    |   | 2,055,305  |   |   | 1,689,829  |  
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Net cash provided by operating
activities                                           |  |                         | 5,453,273  |      |   | 2,241,307  |   |   | 4,775,524  |  
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Cash flows used in investing activities:                                            |  |                         |            |      |   |            |   |   |            |  
|Purchase of property and equipment                                                  |  |                         | (85,803    | )    |   | (23,640    | ) |   | (113,722   | )
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Cash flows used in financing activities:                                            |  |                         |            |      |   |            |   |   |            |  
|Distributions to members                                                            |  |                         | (3,632,804 | )    |   | (2,813,021 | ) |   | (3,202,770 | )
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Net increase (decrease) in cash and cash
  equivalents                              |  |                         | 1,734,666  |      |   | (595,354   | ) |   | 1,459,032  |  
|Cash and cash equivalents - beginning of year                                       |  |                         | 9,916,728  |      |   | 10,512,082 |   |   | 9,053,050  |  
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Cash and cash equivalents - end of year                                             |  | $                       | 11,651,394 |      | $ | 9,916,728  |   | $ | 10,512,082 |  
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Supplemental disclosures of cash flow
  information:                                |  |                         |            |      |   |            |   |   |            |  
|Taxes paid                                                                          |  | $                       | 304,570    |      | $ | 152,000    |   | $ | 120,000    |  
|Interest paid                                                                       |  | $                       | 96,000     |      | $ | 96,000     |   | $ | 96,000     |  

See Notes to Financial Statements

F-21

---



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

Notes to
Financial Statements 
December 31, 2007, 2006 and 2005

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] | Organization and basis of presentation:                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Siebert,
 Brandford, Shank & Co., L.L.C. (SBS or the Company) was formed on
 March 10, 1997 to engage in the business of tax-exempt underwriting and
 related trading activities. The Company qualifies as a Minority and Womens
 Owned Business Enterprise in certain municipalities.                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[2] | Securities transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Securities
 transactions, commissions, revenues and expenses are recorded on a trade date
 basis. Securities owned are valued at market value. The resulting unrealized gains and losses are reflected
in income.                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Securities owned, at December 31, 2007, consist of municipal bonds.                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Dividends
 are recorded on the ex-dividend date, and interest income and expense are
 recognized on an accrual basis.                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[3] | Investment banking:                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | 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
 offering date, sales concessions on settlement date, and underwriting fees at
 the time the underwriting is completed and the income is reasonably
 determinable.                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[4] | Furniture and equipment, net:                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Furniture
 and equipment are stated at cost and depreciation is calculated using the
 straight-line method over the lives of the assets, generally five years.                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[5] | Cash equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | For purposes
 of reporting cash flows, cash equivalents include money market funds.                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[6] | 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.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[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.                                                                                                                                                                                                                                

F-22

---



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

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[8] | New accounting pronouncement:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | In June
 2006, the Financial accounting Standards Board (FASB) issued FASB
 Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
 interpretation of FASB Statement No. 109 (FIN 48). FIN 48 clarifies the
 accounting for uncertainties in income taxes recognized in a companys financial
 statements in accordance with Statement 108 and prescribes a recognition
 threshold and measurement attributes for tax positions taken or expected to
 be taken on a tax return. Additionally, FIN 48 provides guidance on
 derecognition, classification, interest and penalties, accounting in interim
 periods, disclosure and transition. The Company adopted the provisions of FIN 48 as of
 January 1, 2007. The adoption of FIN 48 did not impact the Companys financial
 position, results or operations or cash flows. Pursuant to FIN 48, the Company has opted
to classify interest and penalties that would accrue according to the provisions of relevant tax law as
interest and other general and administrative expenses.
The Company is not subject to
 any tax examination for any federal or major state tax jurisdiction for the
 years prior to 2004.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | In September 2006, the Financial Accounting Standards Board issued SFAS No. 157 (SFAS 157),
Fair Value Measurements. SFAS 157
defines fair value and established a framework for measuring fair value. It also expands the disclosures about the use of fair value
to measure assets and liabilities. SFAS 157 is effective the first fiscal year that begins after November 15, 2007. The Company
expects that adoption of SFAS 157 will not have a material effect on the Company's financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|[9] | Reclassification:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Certain
 previous years adjustments have been reclassified to conform with current
 year presentations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

NOTE B - SUBORDINATED BORROWINGS AND SECURED
DEMAND NOTE
RECEIVABLE

The
subordinated debt at December 31, 2007 and 2006 consists of a Secured Demand
Note Collateral Agreement payable to Muriel Siebert & Co., Inc. (Siebert), in the amount of $1,200,000,
bearing interest at 8% and due August 31, 2009. Interest expense paid to
Siebert for each of the years ended 2007, 2006 and 2005 amounts to $96,000, $96,000 and $96,000,
respectively.

The
subordinated borrowings are available in computing net capital under the
Securities and Exchange Commissions (the 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 $1,300,000 at December 31, 2007 and 2006. Interest
earned on the collateral amounted to approximately $74,000, $67,000 and $52,000
in 2007, 2006 and 2005, respectively.

NOTE C - FURNITURE AND EQUIPMENT,
NET

Furniture and
equipment consist of the following:

|                                                |  |      |          |      |   |          |  
|----------------------------------------------- |  | ---- | -------- | ---- | - | -------- | -
|                                                |  | 2007 |          | 2006 |  
|                                                |  |      |          |      |  
|                                                |  |      |          |      |   |          |  
|Equipment                                       |  | $    | 492,782  |      | $ | 437,684  |  
|Furniture
 and fixtures                         |  |      | 185,084  |      |   | 170,492  |  
|                                                |  |      |          |      |   |          |  
|                                                |  |      |          |      |   |          |  
|                                                |  |      | 677,866  |      |   | 608,176  |  
|Less
 accumulated depreciation and amortization |  |      | (473,676 | )    |   | (413,431 | )
|                                                |  |      |          |      |   |          |  
|                                                |  |      |          |      |   |          |  
|                                                |  | $    | 204,190  |      | $ | 194,745  |  
|                                                |  |      |          |      |   |          |  

F-23

---



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 requires that the ratio of aggregate
indebtedness to net capital, both as defined, shall not exceed 15 to 1. At
December 31, 2007 and 2006, the Company had net capital of $10,028,000 and
$10,965,000, respectively, which was $9,575,000 and $10,474,000, respectively,
in excess of its required net capital and its ratio of aggregate indebtedness
to net capital was .68 to 1 and .67 to 1, respectively. The Company claims
exemption from the reserve requirements under Section 15c-3-3(k)(2)(ii).

NOTE E - COMMITMENTS

The Company
rents office space under long-term operating leases expiring through 2013.
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 |          
|     |  |        |          
|     |  |        |          
|2008 |  | $      | 510,000   | 
|2009 |  |        | 477,000   | 
|2010 |  |        | 311,000   | 
|2011 |  |        | 188,000   | 
|2012 |  |        | 190,000   | 
|2013 |  |        | 165,000   | 
|     |  |        |           | 
|     |  |        |           | 
|     |  | $      | 1,841,000 | 
|     |  |        |           | 

Rent expense
including taxes and operating expenses for 2007, 2006 and 2005 amounted to
$661,172, $655,677 and $640,666, respectively.

NOTE F - OTHER

During each of
2007, 2006 and 2005, the Company was charged $240,000 by Siebert for general
and administrative services.

F-24

---



SIGNATURES

In
accordance with Section 13 or 15(d) of the Exchange Act, 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,
 2008       

In accordance
with the Exchange Act, 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(principal
 executive officer) |  | March 31,
 2008
|                          |  |                                                              | 
|Muriel F.
 Siebert        |  |                                                              | 
|                          |  |                                                              |  |                
|/s/ Jeanne
 Rosendale     |  | Executive
 Vice President,                                   |  | March 31,
 2008
|Jeanne
 Rosendale         |  | and General
 Counsel                                         |  |                
|                          |  |                                                              |  |                
|/s/ Joseph
 M. Ramos, Jr. |  | Chief
 Financial Officer                                     |  | March 31,
 2008
|Joseph M.
 Ramos, Jr.     |  | and
 Assistant Secretary                                     |  |                
|                          |  | (principal
 financial and                                    |  |                
|                          |  | accounting
 officer)                                         |  |                
|                          |  |                                                              |  |                
|/s/ Patricia
 L. Francy   |  | Director                                                     |  | March 31,
 2008
|                          |  |                                                              |  |                
|Patricia L.
 Francy       |  |                                                              |  |                
|                          |  |                                                              |  |                
|/s/ Leonard
 M. Leiman    |  | Director                                                     |  | March 31,
 2008
|                          |  |                                                              |  |                
|Leonard M.
 Leiman        |  |                                                              |  |                
|                          |  |                                                              |  |                
|/s/ Jane H.
 Macon        |  | Director                                                     |  | March 31,
 2008
|                          |  |                                                              |  |                
|Jane H.
 Macon            |  |                                                              |  |                
|                          |  |                                                              |  |                
|/s/ Robert
 P. Mazzarella |  | Director                                                     |  | March 31,
 2008
|                          |  |                                                              |  |                
|Robert P. Mazzarella      |  |                                                              |  |                
|                          |  |                                                              |  |                
|/s/ Nancy S.
 Peterson    |  | Director                                                     |  | March 31,
 2008
|                          |  |                                                              |  |                
|Nancy S.
 Peterson        |  |                                                              |  |                

---



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)                                                    
|            |      |                          |                                                                                                                                                                                                                                                                                                   
|            | 10.5 |                          | 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)                                                                                                                        
|            |      |                          |                                                                                                                                                                                                                                                                                                   
|            | 10.6 |                          | Strategic
 Alliance Agreement, dated as of April 29, 2002, by and between Intuit Inc,
 Muriel Siebert & Co., Inc. and Investment Solutions, Inc. (incorporated by
 reference to Siebert Financial Corp.s Form 10-Q for the quarter ended June
 30, 2002.)                                        
|            |      |                          |                                                                                                                                                                                                                                                                                                   
|            | 10.7 |                          | Fully
 Disclosed Clearing Agreement, dated April 30, 2002, by and between the
 Pershing Division of Donaldson, Lufkin and Jenrette Securities Corporation and
 Muriel Siebert & Co., Inc. (incorporated by reference to Siebert
 Financial Corp.s Form 10-Q for the quarter ended June 30, 2002.)

---



|            |      |                          |                                                                                                                                                                                                                                                                                                                                             
|----------- | ---- | ------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      | Description
 Of Document
|            |      |                         
|            | 10.8 |                          | 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)
|            |      |                          |                                                                                                                                                                                                                                                                                                                                             
|            | 10.9 |                          | 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                                                                                                                                                                                                                   
|            |      |                          |                                                                                                                                                                                                                                                                                                                                             

---