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|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
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|Washington,
 D.C. 20549           

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|Form
 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2010

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from______________to________________

Commission file number 0-5703

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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
 incorporation or organization) |  | (I.R.S. Employer
 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 pursuant to Section 12(b) of the Exchange Act:

|                                       |  |                                           
|-------------------------------------- |  | ------------------------------------------
|Title
 of each class                   |  | Name
 of each exchange on which registered
|COMMON STOCK, PAR VALUE $.01 PER SHARE |  | THE NASDAQ STOCK MARKET LLC               

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

NONE(Title of class)

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

Indicate by check mark 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 check mark
whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days. YES x NO o

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

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

Indicate by check mark
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. (Check one):

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

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







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, 2010)), was $2,216,886.

The
number of shares of the registrants outstanding Common Stock, as of March 22,
2011, was 22,122,855 shares.

Documents
Incorporated by Reference: Definitive Proxy Statement to be filed pursuant to
Regulation 14A of the Exchange Act on or before April 30, 2011 is incorporated
by reference into Part III.

Special Note Regarding Forward-Looking Statements

Statements
in this Annual Report on Form 10-K, as well as oral statements that may be made
by the Company or by officers, directors or employees of the Company acting on
the Companys behalf, that are not statements of historical or current fact
constitute forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward looking statements
involve risks and uncertainties and known and unknown factors that could cause
the actual results of the Company to be materially different from historical
results or from any future expressed or implied by such forward looking
statements, including without limitation: changes in general economic and
market conditions; changes and prospects for changes in interest rates;
fluctuations in volume and prices of securities; demand for brokerage and
investment banking services; competition within and without the discount
brokerage business, including the offer of broader services; competition from
electronic discount brokerage firms offering greater discounts on commissions
than the Company; the prevalence of a flat fee environment; decline in
participation in corporate or municipal finance underwritings; limited trading
opportunities; the method of placing trades by the Companys customers;
computer and telephone system failures; the level of spending by the Company on
advertising and promotion; trading errors and the possibility of losses from
customer non-payment of amounts due; other increases in expenses and changes in
net capital or other regulatory requirements.

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PART I

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|Item 1. | BUSINESS

General

Siebert
Financial Corp. is a holding company that conducts its retail discount
brokerage and investment banking business through its wholly-owned subsidiary,
Muriel Siebert & Co., Inc., a Delaware corporation. Muriel F. Siebert, the
first woman member of the New York Stock Exchange, is our Chairwoman, Chief
Executive Officer and President and owns approximately 90% of our outstanding
common stock, par value $.01 per share (the Common Stock). For purposes of
this Annual Report, the terms Siebert Company, we, us and our refer
to Siebert Financial Corp. and its consolidated subsidiaries, unless the
context otherwise requires.

Our
principal offices are located at 885 Third Avenue, New York, New York 10022,
and our phone number is (212) 644-2400. Our Internet address is
www.siebertnet.com. Our SEC filings are available through our website at www.siebertnet.com,
where you are able to obtain copies of the Companys public filings free of
charge. Our Common Stock trades on the Nasdaq Global Market under the symbol
SIEB.

Business Overview

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

The Retail Division

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

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

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

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

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

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

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

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

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

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

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

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

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

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

| |   |                                                                                                                                                                                                                                                                                                                            
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| | ▪ | Informative trading
 screens: Customers can stay in touch while trading, double-check balances,
 positions and order status, see real time quotes, intraday and annual charts
 and news headlines  automatically  as they place orders.                                                                                  
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| | ▪ | Multiple orders: Customers
 can place as many as 10 orders at one time.                                                                                                                                                                                                                                                    
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| | ▪ | Tax-lot trading: Our
 online equity order entry screen allows customers to specify tax lots which
 display with cost basis and current gain/loss on a real-time positions page.                                                                                                                                            
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| | ▪ | Trailing stop orders:
 Customers can enter an order that trails the market as a percentage of share
 price or with a flat dollar value and the system will execute their
 instructions automatically.                                                                                                                      
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| | ▪ | Contingent orders:
 Customers can place One-Triggers-Two Bracket and One-Cancels-Other Bracket
 orders.                                                                                                                                                                                                                    
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| | ▪ | Options Wizard and
 Strategy Builder: Customers can review single and complex options
 combinations and components of each along with profit/risk potential and
 impact of time. The Strategy Builder presents real-time debit/credit amounts,
 potential maximum gain/loss and potential breakeven points by strike price.
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| | ▪ | An easy-to-install desktop
 security program that may be installed to help protect against certain types
 of online fraud such as keylogging and phishing.                                                                                                                                                             

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

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The Capital Markets Division

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

Siebert, Brandford, Shank & Co., L.L.C.

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

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

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

Advertising, Marketing and Promotion

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

Competition

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

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.

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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.

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

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

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

Net Capital Requirements

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

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

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

Under
applicable regulations, Siebert is required to maintain regulatory net capital
of at least $250,000. At December 31, 2010 and 2009, Siebert had net capital of
$20.4 million and $21.1 million, respectively. Siebert claims exemption from
the reserve requirement under Section 15c3-3(k)(2)(ii).

Employees

As
of March 15, 2011, we had approximately 70 full-time employees, six of whom
were corporate officers. None of our employees is represented by a union, and
we believe that relations with our employees are good.

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|Item 1A. | RISK FACTORS

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

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

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

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

There is intense competition in the
brokerage industry.

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

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

We are subject to extensive government
regulation.

Our
business is subject to extensive regulation in the United States, at both the
Federal and state level. We are also subject to regulation by selfregulatory
organizations and other regulatory bodies in the United 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.

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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.

We are subject to net capital requirements.

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

Our customers may fail to pay us.

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

We face risks relating to our investment
banking activities.

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

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

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

During
2010, we received and processed 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. There can be no assurance that our network structure will
operate appropriately in the event of a subsystem, component or software
failure. In addition, we cannot assure you that we will be able to prevent an
extended systems failure in the event of a power or telecommunications failure,
an earthquake, terrorist attack, fire or any act of God. Any systems failure
that causes interruptions in our operations could have a material adverse
effect on our business, financial condition and operating results.

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

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

- 8 -

---



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

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

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

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

Our principal
shareholder may control many key decisions.

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

There may be no
public market for our common stock.

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

On January
4, 2011, we received notice from The Nasdaq Stock Market stating that for more
than 30 consecutive business days, the Market Value of Publicly Held Shares
closed below the minimum $5 million required for continued listing on The
Nasdaq Global Market under Nasdaq Rule 5450(b)(1)(C). Market Value of Publicly
Held Shares is calculated by multiplying the publicly held shares, which is
total shares outstanding less any shares held by officers, directors, or
beneficial owners of more than 10%, by the closing bid price. Ms. Muriel F.
Siebert currently owns approximately 90% of our outstanding common stock.
Therefore, the value of shares beneficially owned by Ms. Siebert, and the value
of shares beneficially owned by other officers and directors of the Company, is
excluded from the Market Value of Publicly Held Shares of the Company.

Nasdaq Rule
5810(c)(3)(D) provides the Company a grace period of 180 calendar days, or
until July 5, 2011, to regain compliance with the Market Value of Publicly Held
Shares. In order to regain compliance, the Market Value of Publicly Held Shares
must close at $5 million or more for a minimum of ten consecutive business days
during the grace period.

The Company
intends to actively monitor the Market Value of Publicly Held Shares between
now and July 5, 2011. The Company has not yet determined whether to take other
action in response to the notification letter.

If the
Company is not able to comply with the listing standards of The Nasdaq Global
Market, our common stock may be transferred to The Nasdaq Capital Market or
delisted from Nasdaq and an associated decrease in liquidity in the market for
the Companys common stock will occur.

|                |                          
|--------------- | -------------------------
|Item 1B.        | UNRESOLVED STAFF COMMENTS
|               
|Not applicable.
|               
|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.

- 9 -

---



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                             |  |                                          | 8,514 |                                    |  | 1/14/13         |  |  | None | 
|                                                               |  |                                          |       |                                    |  |                 |  |  |      | 
|Retail Offices                                                 |  |                                          |       |                                    |  |                 |  |  |      | 
|                                                               |  |                                          |       |                                    |  |                 |  |  |      | 
|9701 Wilshire Boulevard, Suite 1111
 Beverly Hills, CA 90212   |  |                                          | 1,189 |                                    |  | 10/31/10        |  |  | None | 
|                                                               |  |                                          |       |                                    |  |                 |  |  |      | 
|4400 North Federal Highway 
 Boca Raton, FL 33431              |  |                                          | 2,438 |                                    |  | Month to  Month |  |  | None | 
|                                                               |  |                                          |       |                                    |  |                 |  |  |      | 
|111 Pavonia Avenue(1)Jersey City, NJ 07310                     |  |                                          | 8,141 |                                    |  | 6/30/12         |  |  | None | 
|                                                               |  |                                          |       |                                    |  |                 |  |  |      | 
|400 Fifth Avenue South, Suite 100
 Naples, FL 34102            |  |                                          | 1,008 |                                    |  | 4/30/11         |  |  | None | 
|                                                               |  |                                          |       |                                    |  |                 |  |  |      | 
|1217 South Flager Drive, 3rdFloor
 
 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.

- 10 -

---



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 - 2009  |  | $    | 2.00 |     | $ | 1.27 | 
|                       |  |      |      |     |   |      | 
|Second
 Quarter - 2009 |  | $    | 2.52 |     | $ | 1.30 | 
|                       |  |      |      |     |   |      | 
|Third
 Quarter - 2009  |  | $    | 2.92 |     | $ | 1.63 | 
|                       |  |      |      |     |   |      | 
|Fourth
 Quarter - 2009 |  | $    | 2.79 |     | $ | 2.24 | 
|                       |  |      |      |     |   |      | 
|First
 Quarter  2010  |  | $    | 2.49 |     | $ | 2.25 | 
|                       |  |      |      |     |   |      | 
|Second
 Quarter  2010 |  | $    | 2.37 |     | $ | 2.12 | 
|                       |  |      |      |     |   |      | 
|Third
 Quarter  2010  |  | $    | 2.20 |     | $ | 1.31 | 
|                       |  |      |      |     |   |      | 
|Fourth
 Quarter  2010 |  | $    | 2.49 |     | $ | 1.59 | 

On March
14, 2011, the closing price of our common stock on the Nasdaq Global Market was
$1.92 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 14, 2011.

On January
4, 2011, we received notice from The Nasdaq Stock Market stating that for more
than 30 consecutive business days, the Market Value of Publicly Held Shares closed
below the minimum $5 million required for continued listing on The Nasdaq
Global Market under Nasdaq Rule 5450(b)(1)(C). Market Value of Publicly Held
Shares is calculated by multiplying the publicly held shares, which is total
shares outstanding less any shares held by officers, directors, or beneficial
owners of more than 10%, by the closing bid price. Ms. Muriel F. Siebert
currently owns approximately 90% of our outstanding common stock. Therefore,
the value of shares beneficially owned by Ms. Siebert, and the value of shares
beneficially owned by other officers and directors of the Company, is excluded
from the Market Value of Publicly Held Shares of the Company.

Nasdaq Rule
5810(c)(3)(D) provides the Company a grace period of 180 calendar days, or
until July 5, 2011, to regain compliance with the Market Value of Publicly Held
Shares. In order to regain compliance, the Market Value of Publicly Held Shares
must close at $5 million or more for a minimum of ten consecutive business days
during the grace period.

The Company
intends to actively monitor the Market Value of Publicly Held Shares between
now and July 5, 2011. The Company has not yet determined whether to take other
action in response to the notification letter.

Dividend Policy

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

Issuer Purchases Of Equity Securities

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

On January
23, 2008, our Board of Directors authorized the repurchase of up to 300,000
shares of our common stock. We will purchase shares from time to time, in our
discretion, in the open market and in private transactions. We purchased 49,497
shares at an average price of $2.11 in the fourth quarter of 2010.

- 11 -

---



A summary of our repurchase activity for the three months ended
December 31, 2010 is as follows:

|               |  |                                     |        |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|-------------- |  | ----------------------------------- | ------ | ------------------------------ | - | ----------------------------------------------------------------------------- |  | ---------------------------------------------------------------------- | ------ |  |  | ------- | 
|Period         |  | Total
 Number
 Of Shares
 Purchased |        | Average Price
 Paid Per
 Share |   | Cumulative Number
 of
 Shares Purchased
 as Part of Publicly
 Announced Plans |  | Maximum
 Number of
 Shares
 That May Yet Be
 Purchased Under
 The Plan |       
|               |  |                                     |        |                                |   |                                                                               |  |                                                                        |       
|October 2010   |  |                                     | 39,914 |                                | $ | 2.05                                                                          |  |                                                                        | 82,002 |  |  | 217,998 | 
|               |  |                                     |        |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|November
 2010 |  |                                     | 9,326  |                                | $ | 2.38                                                                          |  |                                                                        | 91,328 |  |  | 208,672 | 
|               |  |                                     |        |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|December
 2010 |  |                                     | 257    |                                | $ | 1.91                                                                          |  |                                                                        | 91,585 |  |  | 208,415 | 
|               |  |                                     |        |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|               |  |                                     |        |                                |   |                                                                               |  |                                                                        |        |  |  |         | 
|Total          |  |                                     | 49,497 |                                | $ | 2.11                                                                          |  |                                                                        | 91,585 |  |  | 208,415 | 

- 12 -

---



Equity Compensation Plan Information

The following table sets forth information as of December 31, 2010 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)     |  |                                                                                                | 1,503,200 |                                                                                    | $ | 4.14                                                                                                                                      |  |  | 1,700,000 | 
|                                                               |  |                                                                                                |           |                                                                                    |   |                                                                                                                                           |  |  |           | 
|Equity compensation plans not approved by
 security holders(2) |  |                                                                                                | 41,400    |                                                                                    |   |                                                                                                                                          |  |  |          | 
|                                                               |  |                                                                                                |           |                                                                                    |   |                                                                                                                                           |  |  |           | 
|Total                                                          |  |                                                                                                | 1,544,600 |                                                                                    | $ | 4.14                                                                                                                                      |  |  | 1,700,000 | 

| | 
| | 
| | 

|    |                                                   
|--- | --------------------------------------------------
|(1) | Consists of
 our 2007 Long-Term Incentive Plan.   
|    |                                                   
|(2) | Consists of
 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, 2010, 41,400 shares of our common stock under
the Restricted Stock Award Plan had been awarded and were outstanding. As
provided in the plan and subject to restrictions, shares awarded may not be
disposed of by the recipients for a period of one year from the date of the
award. Cash dividends on shares awarded are held by us for the benefit of the
recipients, subject to the same restrictions as the award. These dividends,
without interest, are paid to the recipients upon lapse of the restrictions.

- 13 -

---



|                 |                                                                                                                                                                                                                                                                                                                         
|---------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Our Performance: | The graph
 below compares our performance from December 31, 2005 through December 31,
 2010 against the performance of the Nasdaq Market Index and a peer group. The
 peer group consists of A.B. Watley Group Inc., Ameritrade Holding
 Corporation, E*Trade Financial Corporation and The Charles Schwab
 Corporation.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*Among Siebert Financial Corp., the NASDAQ Composite
Index
and a Peer Group

(LINE GRAPH)

*$100 invested on 12/31/05 in stock or index, including reinvestment of
dividends. Fiscal year ending December 31.

* $100 invested on December 31, 2005 in stock, in peer group and NASDAQ
Composite Index, including reinvestment of dividends. Fiscal year ending
December 31.

- 14 -

---



|        |                        
|------- | -----------------------
|Item 6. | SELECTED FINANCIAL DATA

(In thousands
except share and per share data)

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

|                                                       |  |      |            |      |   |            |   |      |            |      |   |            |  |   |            | 
|------------------------------------------------------ |  | ---- | ---------- | ---- | - | ---------- | - | ---- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                       |  | 2010 |            | 2009 |   | 2008       |   | 2007 |            | 2006 |  
|                                                       |  |      |            |      |   |            |   |      |            |      |  
|                                                       |  |      |            |      |   |            |   |      |            |      |   |            |  |   |            | 
|Income statement data:                                 |  |      |            |      |   |            |   |      |            |      |   |            |  |   |            | 
|Total Revenues                                         |  | $    | 20,770     |      | $ | 25,390     |   | $    | 29,750     |      | $ | 31,890     |  | $ | 28,818     | 
|Net (loss) income                                      |  | $    | (2,640     | )    | $ | (1,183     | ) | $    | (1,760     | )    | $ | 2,258      |  | $ | 3,425      | 
|                                                       |  |      |            |      |   |            |   |      |            |      |   |            |  |   |            | 
|Net (loss) income per share of common stock            |  |      |            |      |   |            |   |      |            |      |   |            |  |   |            | 
|Basic                                                  |  | $    | (0.12      | )    | $ | (0.05      | ) | $    | (0.08      | )    | $ | 0.10       |  | $ | 0.15       | 
|Diluted                                                |  | $    | (0.12      | )    | $ | (0.05      | ) | $    | (0.08      | )    | $ | 0.10       |  | $ | 0.15       | 
|                                                       |  |      |            |      |   |            |   |      |            |      |   |            |  |   |            | 
|Weighted average shares outstanding (basic)            |  |      | 22,167,218 |      |   | 22,193,845 |   |      | 22,208,372 |      |   | 22,206,346 |  |   | 22,129,566 | 
|Weighted average shares outstanding
 (diluted)         |  |      | 22,167,218 |      |   | 22,193,845 |   |      | 22,208,372 |      |   | 22,273,550 |  |   | 22,252,851 | 
|                                                       |  |      |            |      |   |            |   |      |            |      |   |            |  |   |            | 
|Statement of financial condition data (at
 year- end): |  |      |            |      |   |            |   |      |            |      |   |            |  |   |            | 
|                                                       |  |      |            |      |   |            |   |      |            |      |   |            |  |   |            | 
|Total assets                                           |  | $    | 40,103     |      | $ | 44,083     |   | $    | 45,579     |      | $ | 47,924     |  | $ | 46,869     | 
|Total liabilities excluding subordinated
 borrowings   |  | $    | 3,477      |      | $ | 4,695      |   | $    | 4,995      |      | $ | 5,704      |  | $ | 6,460      | 
|Stockholders equity                                   |  | $    | 36,626     |      | $ | 39,388     |   | $    | 40,584     |      | $ | 42,220     |  | $ | 40,409     | 
|Cash dividends declared on common shares
 (1)          |  | $    | 0          |      | $ | 0          |   | $    | 466        |      | $ | 559        |  | $ | 359        | 

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

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

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

The
financial crisis affecting the global economy has created historic volatility
in the market place. Our working capital is invested primarily in money market
funds, so that liquidity has not been materially affected. The crisis did have
the effect of reducing participation in the securities market by our retail and
institutional customers, which has had an adverse effect on our revenues. Our
affiliate, Siebert, Brandford, Shank & Co., L.L.C. had a record year in
2010 by increasing its market share and participating in more transactions as
senior and co-managers. Our expenses include the costs of an arbitration
proceeding commenced by a former employee following the termination of his
employment, which remains unresolved. The Company believes that the action is
without merit, but the costs of defense, which are included as professional
expenses, have adversely affected the Companys results of operations and may
continue to affect the results of operations until the action is completed.

The
following table sets forth certain metrics as of December 31, 2010 and 2009 and
for the twelve months ended December 31,
2010 and 2009, respectively, which we use in evaluating our business.

|                                                        |  |                                           |         |      |   |         | 
|------------------------------------------------------- |  | ----------------------------------------- | ------- | ---- | - | ------- | 
|                                                        |  | For the Twelve Months 
ended December 31, |        
|Retail
Customer Activity:                               |  | 2010                                      |         | 2009 |  
|                                                        |  |                                           |        
|                                                        |  |                                           |         |      |   |         | 
|Total retail
 trades:                                   |  |                                           | 414,485 |      |   | 463,797 | 
|Average
 commission per retail trade:                   |  | $                                         | 20.92   |      | $ | 22.04   | 
|                                                        |  |                                           |         |      |   |         | 
|                                                        |  | As of December 31,                        |        
|                                                        |  |                                           |        
|                                                        |  | 2010                                      |         | 2009 |  
|                                                        |  |                                           |         |      |  
|Retail
 customer balances:                             
|Retail
 customer net worth (in billions):               |  | $                                         | 6.7     |      | $ | 6.1     | 
|Retail
 customer money market fund value (in billions): |  | $                                         | 1.0     |      | $ | 1.1     | 
|Retail
 customer margin debit balances (in millions):   |  | $                                         | 204.8   |      | $ | 150.2   | 
|Retail
 customer accounts with positions:               |  |                                           | 49,296  |      |   | 53,306  | 

- 15-

---



Description:

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

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

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

- 16 -

---



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

On
January 23, 2008, our Board of Directors authorized a buy back of up to 300,000
shares of our common stock. Under this program, shares are purchased from time
to time, at our discretion, in the open market and in private transactions.
During 2010 we repurchased 62,647 shares of common stock for an average price
of $2.10.

Critical Accounting Policies

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

Results of Operations

Year Ended December
31, 2010 Compared To Year Ended December 31, 2009

Revenues.
Total revenues for 2010 were $20.8 million, a decrease of $4.6 million, or
18.2%, from 2009. Commission and fee income decreased $1.1 million, or 6.0%,
from the prior year to $17.1 million due to a decrease in revenues from
institutional trading, commission recapture and retail customer trading.
Institutional equity trading decreased due to a reduction of institutional
customers participating in fewer buyback programs and an overall decrease in
institutional customer transactions. Retail customer volumes decreased as well
as the average retail commission charged per trade due to price compression to
maintain and attract new retail customers offset by an increase in fees from
margin debits due to increased customer margin debits balances and 12b-1 fees
and due to recording $3 million as commission and fee income as part of our
negotiations with our primary clearing firm for a three year Fully Disclosed
Clearing Agreement in the second quarter of 2010.

Investment
banking revenues decreased $3.2 million or 58.5%, from the prior year to $2.2
million in 2010 due to our participation in fewer new issues in the equity and
debt capital markets and the loss of a debt investment banker.

Trading
profits decreased $399,000 or 24.4%, from the prior year to $1.2 million
primarily due to the loss of a debt sales-trader and an overall decrease in
customer trading volume in the debt markets.

Income
from interest and dividends increased $28,000 or 22.8%, from the prior year to
$151,000 primarily due to slightly higher yields on investments in money market
funds.

Expenses.
Total expenses for 2010 were $25.9 million, a decrease of $6.2 million, or
19.4%, from the prior year.

Employee
compensation and benefit costs decreased $3.0 million or 24.8%, from the prior
year to $9.2 million. This decrease was due to decreases in commissions paid
based on production, a reduction in headcount for registered representatives
and staff and the elimination of the staff bonus program.

Clearing
and floor brokerage fees decreased $2.4 million or 43.4%, from the prior year
to $3.1 million primarily due to the execution of a Fully Disclosed Clearing
Agreement with our primary clearing firm in the second quarter of 2010 which
reduced our fees for clearing costs as well as a decrease in volume of trade
executions for retail customers and a decrease in execution charges for
institutional debt and equity customers.

Professional
fees decreased $466,000 or 6.7%, from the prior year to $6.5 million primarily
due to a decrease in consulting fees relating to the commission recapture
business and Sarbanes-Oxley compliance.

Advertising
and promotion expense decreased $413,000 or 50.8%, from the prior year to
$400,000 primarily due to a decrease in print advertising, production and
airing of television commercials in the Florida region.

Communications
expense decreased $247,000 or 9.5%, from the prior year to $2.4 million
primarily due to a decrease in hosting and communication costs associated with
our website.

- 17 -

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Occupancy
costs decreased $5,000 from the prior year to $1.3 million due to a decrease in
rents in the New Jersey office and electric costs offset by an increase in
rents in our Florida branches.

Impairment
of intangibles were the result of the Company writing down the carrying value of
its unamortized intangible assets to fair value and recorded a related impairment
loss in 2010.

Other
general and administrative expenses increased $182,000 or 6.8%, from the prior
year to $2.9 million primarily due to an increase in office expense, computer costs, placement fees,
depreciation, registration fees and dues relating to the Securities Investor
Protection Corporation offset by decreases in travel and entertainment,
supplies and transportation.

Income
from our equity investment in Siebert, Brandford, Shank & Co., L.L.C., an
entity in which Siebert holds a 49% equity interest (SBS), for 2010 was $4.1
million compared to income of $4.3 million for 2009, a decrease of $185,000, or
4.3%, primarily due to increased employee compensation offset by increased
revenues as SBS participated in more and larger municipal bond offerings as
senior and co-manager. Loss from our equity investment in SBS Financial
Products Company, LLC, an entity in which we hold a 33% equity interest
(SBSFPC) for 2010 was $24,000 as compared to a loss of $63,000 from the same
period in 2009. This decrease was due to a change in mark to market loss in
positions in 2010. Results of operations of equity investees is considered to
be integral to our operations and material to the results of operations.

Taxes.
The tax provision for the year ended December 31, 2010 was $1.6 million and a
tax benefit for the year ended December 31, 2009 was $1.3 million. The tax
provision for the year ended December 31, 2010 was incurred due to the
recording of a full valuation allowance on deferred taxes of $2,140,000 based
on recent losses and the likelihood of realization. The tax benefit for the
year ended December 31, 2009 was due to our loss before benefit of $2.5
million. Such benefits represented effective tax rates of 53% in 2009,
primarily due to the recording of a tax benefit of $330,000 for the adjustment
of prior year accruals.

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

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

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

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

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

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

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

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

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

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

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

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

- 18 -

---



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

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

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

Liquidity and
Capital Resources

Our
assets are highly liquid, consisting generally of cash, money market funds,
municipal securities and securities freely saleable in the open market. Our
total assets at December 31, 2010 were $40 million, of which we regarded $24.2
million, or 60%, as highly liquid.

Siebert
is subject to the net capital requirements of the SEC, the NYSE and other
regulatory authorities. At December 31, 2010, Sieberts regulatory net capital
was $20.4 million, which was $20.1 million in excess of its minimum capital
requirement of $250,000.

Siebert
has entered into a Secured Demand Note Collateral Agreement with SBS under
which it is obligated to loan to SBS up to $1.2 million on a subordinated basis
collateralized by cash equivalents of approximately $1.5 million as of December
31, 2010. Amounts obligated to be loaned by Siebert under the facility are
reflected on our balance sheet as cash equivalents - restricted. SBS pays
Siebert interest on this amount at the rate of 4% per annum. The facility
expires on August 31, 2012 at which time SBS is obligated to repay to Siebert
any amounts borrowed by SBS thereunder.

Contractual
Obligations

Below
is a table that presents our obligations and commitments at December 31, 2010:

|                             |  |                       |           |                   |   |           |  |           |         |                       |   |   |  |   |   | 
|---------------------------- |  | --------------------- | --------- | ----------------- | - | --------- |  | --------- | ------- | --------------------- | - | - |  | - | - | 
|                             |  | Payment Due By Period |          
|Contractual
 Obligations     |  | Total                 |           | Less Than
 1 Year |   | 1-3 Years |  | 3-5 Years |         | More Than
 Five Years |  
|Operating
 lease obligations |  | $                     | 1,376,000 |                   | $ | 781,000   |  | $         | 595,000 |                       | $ | 0 |  | $ | 0 | 

Off-Balance Sheet Arrangements

Retail
customer transactions are cleared through clearing brokers on a fully disclosed
basis. If customers do not fulfill their contractual obligations, the clearing
broker may charge Siebert for any loss incurred in connection with the purchase
or sale of securities at prevailing market prices to satisfy the customer
obligations. Siebert regularly monitors the activity in its customer accounts
for compliance with its margin requirements. Siebert is exposed to the risk of
loss on unsettled customer transactions if customers and other counterparties
are unable to fulfill their contractual obligations. There were no material
losses for unsettled customer transactions in 2010.

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

Financial Instruments Held For Trading
Purposes:

Through
Siebert, we maintain inventories in exchange-listed equity securities and municipal
securities on both a long and short basis. We did not have any short positions
at December 31, 2010. The Company does not directly engage in derivative
transactions, has no interest in any special purpose entity and has no
liabilities, contingent or otherwise, for the debt of another entity except for
Sieberts obligation under its Secured Demand Note Collateral Agreement of $1.2
million executed in favor of SBS. SBS pays Siebert interest on this amount at
the rate of 4% per annum. Siebert earned interest of $48,000 in 2010 and 2009
and $64,000 in 2008 from SBS.

- 19 -

---



Financial Instruments Held For Purposes Other
Than Trading:

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

Retail
customer transactions are cleared through clearing brokers on a fully disclosed
basis. If customers do not fulfill their contractual obligations, the clearing
broker may charge Siebert for any loss incurred in connection with the purchase
or sale of securities at prevailing market prices to satisfy the customers
obligations. Siebert regularly monitors the activity in its customer accounts
for compliance with its margin requirements. Siebert is exposed to the risk of
loss on unsettled customer transactions if customers and other counterparties
are unable to fulfill their contractual obligations. There were no material
losses for unsettled customer transactions in 2010.

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

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, 2010.

Changes in Internal Controls over Financial
Reporting

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

Limitation of the Effectiveness of Internal
Controls

None

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

None

- 20 -

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PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

(a)
Identification of Directors

This
information is incorporated by reference from our definitive proxy statement to
be filed by the Company pursuant to Regulation 14A on or prior to April 30,
2011.

(b)
Identification of Executive Officers

| |                       |  |     |  |                                                               
| | --------------------- |  | --- |  | --------------------------------------------------------------
| | Name                  |  | Age |  | Position                                                      
| |                       |  |     |  |                                                               
| |                       |  |     |  |                                                               
| | Muriel F.
 Siebert    |  | 78  |  | Chairwoman,
 Chief Executive Officer and President            
| |                       |  |     |  |                                                               
| | Ameen Esmail          |  | 52  |  | Executive
 Vice President and Director of Business Development
| |                       |  |     |  |                                                               
| | Joseph M.
 Ramos, Jr. |  | 52  |  | Executive
 Vice President and Chief Financial Officer         
| |                       |  |     |  |                                                               
| | Jeanne
 Rosendale     |  | 46  |  | Executive
 Vice President and General Counsel                 
| |                       |  |     |  |                                                               
| | Timothy O
 Leary     |  | 48  |  | Executive
 Vice President                                     
| |                       |  |     |  |                                                               
| | Daniel Iesu           |  | 51  |  | Secretary                                                     

Certain
information regarding each executive officers business experience is set forth
below.

Muriel
F. Sieberthas
been Chairwoman, Chief Executive Officer, President and a director of Muriel
Siebert & Co., Inc. since 1969 and of Siebert Financial Corp. (the
Company) since November 8, 1996. She is a director of the New York State
Business Council, and the Greater New York Council of the Boy Scouts of
America. On December 28, 1967, Ms. Siebert became the first woman member of the
New York Stock Exchange. Ms. Siebert served as Superintendent of Banks of the
State of New York from 1977 to 1982. In March 2009, Ms. Siebert was inducted
into the U.S. Business Hall of Fame. Ms. Siebert previously served on the
executive committee of the Economic Club of New York, of which she is still a member,
and formerly served on the New York State Commission on Judicial Nomination,
which is involved in the selection of Associate Judges for the Court of
Appeals. She is a member of the Council on Foreign Relations, Committee of 200
(an international organization of pre-eminent businesswomen), the International
Womens Forum and the New York Womens Forum of which she was a founder and
former president. Ms. Siebert provides expertise on financial brokerage
matters, and is a sought-after speaker on current financial matters and a
frequent commentator on the major financial news networks.

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

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

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

Timothy
O Learyjoined Siebert on June 6, 2007 and was
appointed an Executive Vice President in April 2008. Mr. OLeary oversees
Capital Markets, Retail and Branch Operations, Marketing, Business Development
and the Technology group. From March 2006 to June 2007, Mr. OLeary was a
financial consultant with Smith Barney and from January 2003 to January 2006,
Mr. OLeary was the President/Owner of Ironvilla Development Corporation, a
residual real estate development company. From November 2001 to January 2003,
Mr. OLeary was the Senior Vice President at Datek Online, Inc. From October
2000 to November 2001, Mr. OLeary

- 21 -

---



was the
Managing Director of Operations at Josephthal & Co., Inc. where he was
responsible for all facets of the brokerage operations. From March 1985 to
October 2000, Mr. OLeary was with TD Waterhouse, Inc., the last five years as
the Senior Vice President of Retail Management.

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

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

This
information is incorporated by reference from our definitive proxy statement to
be filed pursuant to Regulation 14A on or prior to April 30, 2011.

(d)
Code of Ethics

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

The
information required by this item not set forth herein is incorporated by
reference to our definitive proxy statement to be filed pursuant to Regulation
14A on or prior to April 30, 2011.

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

The
information required by this item is incorporated by reference from our definitive
proxy statement to be filed pursuant to Regulation 14A on or prior to April 30,
2011.

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

The
information required by this item is incorporated by reference from our
definitive proxy statement to be filed pursuant to Regulation 14A on or prior
to April 30, 2011.

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

The
information required by this item is incorporated by reference from our
definitive proxy statement to be filed pursuant to Regulation 14A on or prior
to April 30, 2011.

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

The
information required in this item is incorporated by reference from our
definitive proxy statement to be filed pursuant to Regulation 14A on or prior
to April 30, 2011.

- 22 -

---



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, 2010 commence
on page F-1 of this report on Form 10-K.

| |    |                               
| | -- | ------------------------------
| | 2. | Financial
 Statement Schedules
| |    |                               
| |    | None.                         
| |    |                               
| | 3. | Exhibits                      

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

- 23 -

---



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, 2010 and 2009                                                      |  | F-2 
|                                                                                                                                   |  |     
|Consolidated Statements of Operations for each of
 the years in the three-year period ended December 31, 2010                      |  | F-3 
|                                                                                                                                   |  |     
|Consolidated Statements of Changes in Stockholders
 Equity for each of the years in the three-year period ended December 31, 2010 |  | F-4 
|                                                                                                                                   |  |     
|Consolidated Statements of Cash Flows for each of
 the years in the three-year period ended December 31, 2010                      |  | F-5 
|                                                                                                                                   |  |     
|Notes to Consolidated Financial Statements                                                                                         |  | F-6 
|                                                                                                                                   |  |     
|SIEBERT, BRANDFORD, SHANK & CO., L.L.C.                                                                                            |  |     
|                                                                                                                                   |  |     
|Report of Independent Registered Public Accounting
 Firm                                                                           |  | F-15
|                                                                                                                                   |  |     
|Statements of Financial Condition at December 31,
 2010 and 2009                                                                   |  | F-16
|                                                                                                                                   |  |     
|Statements of Operations for each of the years in
 the three-year period ended December 31, 2010                                   |  | F-17
|                                                                                                                                   |  |     
|Statements of Changes in Members Capital for each
 of the years in the three-year period ended December 31, 2010                  |  | F-18
|                                                                                                                                   |  |     
|Statements of Changes in Subordinated Borrowings                                                                                   |  | F-19
|                                                                                                                                   |  |     
|Statements of Cash Flows for each of the years in
 the three-year period ended December 31, 2010                                   |  | F-20
|                                                                                                                                   |  |     
|Notes to Financial Statements                                                                                                      |  | F-21

---



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

Board of Directors and
Shareholders 
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, 2010 and
2009, and the related consolidated statements of operations, changes in
stockholders equity and cash flows for each of the years in the three-year
period ended December 31, 2010. 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. We were not engaged to perform an audit of the Companys
internal control over financial reporting. Our audits include consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Companys internal control
over financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, 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, 2010 and 2009, and the consolidated results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 2010 in conformity with accounting principles
generally accepted in the United States of America.

/s/
EisnerAmper LLP

New York, New York 
March 31, 2011

F-1

---



SIEBERT FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION

|                                                                                                                                                                                 |  |               |            |      |   |            |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | ---- | - | ---------- | -
|                                                                                                                                                                                 |  | December
 31, |           
|                                                                                                                                                                                 |  |               |           
|                                                                                                                                                                                 |  | 2010          |            | 2009 |  
|                                                                                                                                                                                 |  |               |            |      |  
|ASSETS                                                                                                                                                                           |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Cash and cash equivalents                                                                                                                                                        |  | $             | 22,646,000 |      | $ | 24,184,000 |  
|Cash equivalents - restricted                                                                                                                                                    |  |               | 1,532,000  |      |   | 1,532,000  |  
|Receivable from brokers                                                                                                                                                          |  |               | 1,563,000  |      |   | 1,954,000  |  
|Securities owned, at fair value                                                                                                                                                  |  |               | 1,116,000  |      |   | 1,607,000  |  
|Furniture, equipment and leasehold improvements, net                                                                                                                             |  |               | 1,246,000  |      |   | 1,569,000  |  
|Investments in and advances to affiliates                                                                                                                                        |  |               | 9,816,000  |      |   | 9,040,000  |  
|Income tax refund receivable                                                                                                                                                     |  |               | 795,000    |      |   | 1,074,000  |  
|Prepaid expenses and other assets                                                                                                                                                |  |               | 741,000    |      |   | 1,050,000  |  
|Intangibles, net                                                                                                                                                                 |  |               | 648,000    |      |   | 750,000    |  
|Deferred taxes                                                                                                                                                                   |  |               |           |      |   | 1,323,000  |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  | $             | 40,103,000 |      | $ | 44,083,000 |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                             |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Liabilities:                                                                                                                                                                     |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Accounts payable and accrued liabilities                                                                                                                                         |  | $             | 3,477,000  |      | $ | 4,695,000  |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Commitments and contingent liabilities - Note I                                                                                                                                  |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Stockholders equity:                                                                                                                                                            |  |               |            |      |   |            |  
|Common stock, $.01 par value; 49,000,000 shares authorized,
 23,211,846 shares issued, 22,122,678 and 22,185,325 shares outstanding at
 December 31, 2010 and 2009, respectively |  |               | 232,000    |      |   | 232,000    |  
|Additional paid-in capital                                                                                                                                                       |  |               | 19,484,000 |      |   | 19,474,000 |  
|Retained earnings                                                                                                                                                                |  |               | 21,609,000 |      |   | 24,249,000 |  
|Less: 1,089,168 and 1,026,521 shares of treasury stock, at cost, at
 December 31, 2010 and 2009, respectively                                                                    |  |               | (4,699,000 | )    |   | (4,567,000 | )
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               | 36,626,000 |      |   | 39,388,000 |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  | $             | 40,103,000 |      | $ | 44,083,000 |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  

See notes to consolidated financial statements.

F-2

---



CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                        |  |                          |            |      |   |            |   |   |            |  
|------------------------------------------------------- |  | ------------------------ | ---------- | ---- | - | ---------- | - | - | ---------- | -
|                                                        |  | Year
 Ended December 31, |           
|                                                        |  |                          |           
|                                                        |  | 2010                     |            | 2009 |   | 2008       |  
|                                                        |  |                          |            |      |   |            |  
|Revenue:                                                |  |                          |            |      |   |            |   |   |            |  
|Commissions and fees                                    |  | $                        | 17,144,000 |      | $ | 18,244,000 |   | $ | 24,224,000 |  
|Investment banking                                      |  |                          | 2,238,000  |      |   | 5,387,000  |   |   | 3,481,000  |  
|Trading profits                                         |  |                          | 1,237,000  |      |   | 1,636,000  |   |   | 1,232,000  |  
|Interest and dividends                                  |  |                          | 151,000    |      |   | 123,000    |   |   | 813,000    |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|                                                        |  |                          | 20,770,000 |      |   | 25,390,000 |   |   | 29,750,000 |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|Expenses:                                               |  |                          |            |      |   |            |   |   |            |  
|Employee compensation and benefits                      |  |                          | 9,189,000  |      |   | 12,219,000 |   |   | 12,318,000 |  
|Clearing fees, including floor brokerage                |  |                          | 3,139,000  |      |   | 5,545,000  |   |   | 6,464,000  |  
|Professional fees                                       |  |                          | 6,517,000  |      |   | 6,983,000  |   |   | 8,070,000  |  
|Advertising and promotion                               |  |                          | 400,000    |      |   | 813,000    |   |   | 809,000    |  
|Communications                                          |  |                          | 2,359,000  |      |   | 2,606,000  |   |   | 2,567,000  |  
|Occupancy                                               |  |                          | 1,274,000  |      |   | 1,279,000  |   |   | 1,319,000  |  
|Impairment of intangibles                               |  |                          | 150,000    |      |   |           |   |   |           |  
|Other general and administrative                        |  |                          | 2,851,000  |      |   | 2,669,000  |   |   | 2,693,000  |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|                                                        |  |                          | 25,879,000 |      |   | 32,114,000 |   |   | 34,240,000 |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|Income from equity investees                            |  |                          | 4,078,000  |      |   | 4,224,000  |   |   | 1,699,000  |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|Loss before income taxes                                |  |                          | (1,031,000 | )    |   | (2,500,000 | ) |   | (2,791,000 | )
|Income tax expense (benefit)                            |  |                          | 1,609,000  |      |   | (1,317,000 | ) |   | (1,031,000 | )
|                                                        |  |                          |            |      |   |            |   |   |            |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|Net loss                                                |  | $                        | (2,640,000 | )    | $ | (1,183,000 | ) | $ | (1,760,000 | )
|                                                        |  |                          |            |      |   |            |   |   |            |  
|                                                        |  |                          |            |      |   |            |   |   |            |  
|Net loss per share of common stock  basic and diluted  |  | $                        | (0.12      | )    | $ | (0.05      | ) | $ | (0.08      | )
|                                                        |  |                          |            |      |   |            |   |   |            |  
|Weighted average shares outstanding  basic and diluted |  |                          | 22,167,218 |      |   | 22,193,845 |   |   | 22,208,372 |  

See notes to consolidated financial statements.

F-3

---



CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS EQUITY

|                                           |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|------------------------------------------ |  | ------------------ | ---------- | ---------------- | - | ----------------------------- |  | ------------------ | ---------- | ------------------ | - | ---------- | - | ----- | --------- |  | - | ---------- | - | - | ---------- | -
|                                           |  | Common
 Stock      |            | Treasury
 Stock  |   |                              
|                                           |  |                    |            |                  |   |                              
|                                           |  | Number
 Of
 Shares |            | $.01
 Par
 Value |   | Additional
 Paid -In
 Capital |  | Retained
 Earnings |            | Number
 Of
 Shares |   | Amount     |   | Total |          
|                                           |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |          
|Balance
 - January 1, 2008                 |  |                    | 23,211,846 |                  | $ | 232,000                       |  | $                  | 18,832,000 |                    | $ | 27,660,000 |   |       | 999,500   |  | $ | (4,504,000 | ) | $ | 42,220,000 |  
|Net loss                                   |  |                    |            |                  |   |                               |  |                    |            |                    |   | (1,760,000 | ) |       |           |  |   |            |   |   | (1,760,000 | )
|Treasury share
 purchases                  |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       | 10,231    |  |   | (30,000    | ) |   | (30,000    | )
|Dividend on
 common stock ($.10 per share) |  |                    |            |                  |   |                               |  |                    |            |                    |   | (468,000   | ) |       |           |  |   |            |   |   | (468,000   | )
|Stock based
 compensation                  |  |                    |            |                  |   |                               |  |                    | 622,000    |                    |   |            |   |       |           |  |   |            |   |   | 622,000    |  
|                                           |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|                                           |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|Balance
 - December 31, 2008               |  |                    | 23,211,846 |                  |   | 232,000                       |  |                    | 19,454,000 |                    |   | 25,432,000 |   |       | 1,009,731 |  |   | (4,534,000 | ) |   | 40,584,000 |  
|Net loss                                   |  |                    |            |                  |   |                               |  |                    |            |                    |   | (1,183,000 | ) |       |           |  |   |            |   |   | (1,183,000 | )
|Treasury share
 purchases                  |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       | 16,790    |  |   | (33,000    | ) |   | (33,000    | )
|Stock based
 compensation                  |  |                    |            |                  |   |                               |  |                    | 20,000     |                    |   |            |   |       |           |  |   |            |   |   | 20,000     |  
|                                           |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|                                           |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|Balance -
December 31, 2009                |  |                    | 23,211,846 |                  |   | 232,000                       |  |                    | 19,474,000 |                    |   | 24,249,000 |   |       | 1,026,521 |  |   | (4,567,000 | ) |   | 39,388,000 |  
|Net loss                                   |  |                    |            |                  |   |                               |  |                    |            |                    |   | (2,640,000 | ) |       |           |  |   |            |   |   | (2,640,000 | )
|Treasury share
 purchases                  |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       | 62,647    |  |   | (132,000   | ) |   | (132,000   | )
|Stock based
 compensation                  |  |                    |            |                  |   |                               |  |                    | 10,000     |                    |   |            |   |       |           |  |   |            |   |   | 10,000     |  
|                                           |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|Balance
 - December 31, 2010               |  |                    | 23,211,846 |                  | $ | 232,000                       |  | $                  | 19,484,000 |                    | $ | 21,609,000 |   |       | 1,089,168 |  | $ | (4,699,000 | ) | $ | 36,626,000 |  
|                                           |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  

See notes to consolidated financial statements.

F-4

---



CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                             |  |                          |             |      |   |            |   |   |            |  
|---------------------------------------------------------------------------- |  | ------------------------ | ----------- | ---- | - | ---------- | - | - | ---------- | -
|                                                                             |  | Year
 Ended December 31, |            
|                                                                             |  |                          |            
|                                                                             |  | 2010                     |             | 2009 |   | 2008       |  
|                                                                             |  |                          |             |      |   |            |  
|Cash Flows From Operating Activities:                                        |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Net loss                                                                     |  | $                        | (2,640,000  | )    | $ | (1,183,000 | ) | $ | (1,760,000 | )
|Adjustments to reconcile net loss to net cash used in operating
 activities: |  |                          |             |      |   |            |   |   |            |  
|Depreciation and amortization                                                |  |                          | 525,000     |      |   | 482,000    |   |   | 479,000    |  
|Income from equity investees                                                 |  |                          | (4,078,000  | )    |   | (4,224,000 | ) |   | (1,699,000 | )
|Distribution from equity investees                                           |  |                          | 3,346,000   |      |   | 1,539,000  |   |   | 1,099,000  |  
|Impairment of intangibles                                                    |  |                          | 150,000     |      |   |            |   |   |            |  
|Deferred taxes                                                               |  |                          | 1,323,000   |      |   | (175,000   | ) |   | (281,000   | )
|Stock based compensation                                                     |  |                          | 10,000      |      |   | 20,000     |   |   | 622,000    |  
|Changes in:                                                                  |  |                          |             |      |   |            |   |   |            |  
|Cash and cash equivalents  restricted                                       |  |                          |             |      |   | (232,000   | ) |   |            |  
|Securities owned, at fair value                                              |  |                          | 491,000     |      |   | (849,000   | ) |   | (19,000    | )
|Receivable from clearing broker                                              |  |                          | 391,000     |      |   | (272,000   | ) |   | 1,000      |  
|Income tax refund receivable                                                 |  |                          | 279,000     |      |   | 238,000    |   |   | (1,312,000 | )
|Prepaid expenses and other assets                                            |  |                          | 309,000     |      |   | (24,000    | ) |   | (90,000    | )
|Accounts payable and accrued liabilities                                     |  |                          | (1,218,000  | )    |   | (300,000   | ) |   | (709,000   | )
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Net cash used in operating activities                                        |  |                          | (1,112,000  | )    |   | (4,980,000 | ) |   | (3,669,000 | )
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Cash Flows From Investing Activities:                                        |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Purchase of customer list                                                    |  |                          | (50,000     | )    |   |            |   |   |            |  
|Purchase of furniture, equipment and leasehold improvements                  |  |                          | (200,000    | )    |   | (545,000   | ) |   | (827,000   | )
|Subordinated loan to investee                                                |  |                          | (10,000,000 | )    |   |            |   |   |            |  
|Repayment of subordinated loan to investee                                   |  |                          | 10,000000   |      |   |            |   |   |            |  
|(Payment) collection of advances made to equity investees                    |  |                          | (44,000     | )    |   | 125,000    |   |   | 22,000     |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Net cash used in investing activities                                        |  |                          | (294,000    | )    |   | (420,000   | ) |   | (805,000   | )
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Cash Flows From Financing Activities:                                        |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Dividend on common stock                                                     |  |                          |             |      |   |            |   |   | (468,000   | )
|Purchase of treasury shares                                                  |  |                          | (132,000    | )    |   | (33,000    | ) |   | (30,000    | )
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Net cash used in financing activities                                        |  |                          | (132,000    | )    |   | (33,000    | ) |   | (498,000   | )
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Net decrease cash and cash equivalents                                       |  |                          | (1,538,000  | )    |   | (5,433,000 | ) |   | (4,972,000 | )
|Cash and cash equivalents - beginning of year                                |  |                          | 24,184,000  |      |   | 29,617,000 |   |   | 34,589,000 |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Cash and cash equivalents - end of year                                      |  | $                        | 22,646,000  |      | $ | 24,184,000 |   | $ | 29,617,000 |  
|                                                                             |  |                          |             |      |   |            |   |   |            |  
|Supplemental Cash Flow Disclosures:                                          |  |                          |             |      |   |            |   |   |            |  
|Cash for:                                                                    |  |                          |             |      |   |            |   |   |            |  
|Income taxes (received) paid, net                                            |  | $                        | (341,000    | )    | $ | 239,000    |   | $ | 575,000    |  

See notes to consolidated financial statements.

F-5

---



SIEBERT FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A - Summary Of Significant Accounting Policies

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] | Business and Principles of Consolidation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Siebert
 Financial Corp. (Financial), through its wholly owned subsidiary, Muriel
 Siebert & Co., Inc. (Siebert), engages in the business of providing
 discount brokerage services for customers, investment banking services for
 institutional clients and trading securities for its own account, and,
 through its wholly owned subsidiary, Siebert Womens Financial Network, Inc.
 (WFN), engages in providing products, services and information devoted to
 womens financial needs. The accompanying consolidated financial statements
 includes the accounts of Financial and its subsidiaries. All significant
 intercompany accounts and transactions have been eliminated. Financial,
 Siebert and WFN collectively are referred to herein as the Company.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The
 municipal bond investment banking business is conducted by Siebert,
 Brandford, Shank & Co., L.L.C. (SBS), and related derivatives
 transactions are conducted by SBS Financial Products Company, LLC (SBSFP),
 investees not controlled or majority-owned, which are accounted for by the
 equity method of accounting (see Note B). The equity method provides that the
 Company records its share of the investees earnings or losses in its results
 of operations with a corresponding adjustment to the carrying value of its
 investment. In addition, the investment is adjusted for capital contributions to
 and distributions from the investees. Operations of equity investees are
 considered integral to Sieberts operations.                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|[2] | Securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Securities
 owned are carried at fair value with realized and unrealized gains and losses
 reflected in trading profits. Security transactions are recorded on a
 trade-date basis. Siebert clears all its security transactions through
 unaffiliated clearing firms on a fully disclosed basis. Accordingly, Siebert
 does not hold funds or securities for, or owe funds or securities to, its
 customers. Those functions are performed by the clearing firms.                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|[3] | Fair value of financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Authoritative
 accounting guidance defines fair value, establishes a framework for measuring
 fair value and establishes a fair value hierarchy. Fair value is the price
 that would be received to sell an asset or paid to transfer a liability in an
 orderly transaction between participants at the measurement date. Fair value
 measurements are not adjusted for transaction costs. The fair value hierarchy
 prioritizes inputs to valuation techniques used to measure fair value into
 three levels:                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Level 1 
 unadjusted quoted prices in active markets for identical assets or
 liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Level 2 
 Inputs other than quoted market prices that are observable, either directly
 or indirectly, and reasonably available.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Level 3 
 Unobservable inputs reflect the assumptions that management develops based on
 available information about the assumptions market participants would use in
 valuing the asset or liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The
 classification of financial instruments valued at fair value as of December
 31, 2010 and 2009 is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |                      |  |         |            |         |   |         |  |   |            | 
| | -------------------- |  | ------- | ---------- | ------- | - | ------- |  | - | ---------- | 
| |                      |  | 2010    |            |         |   |        
| |                      |  |         |            |         |   |        
| | Financial Instrument |  | Level 1 |            | Level 2 |   | Total   | 
| |                      |  |         |            |         |   |         | 
| | Cash equivalents     |  | $       | 20,896,000 |         |   |        |  | $ | 20,896,000 | 
| | Securities           |  |         | 242,000    |         | $ | 874,000 |  | $ | 1,116,000  | 
| |                      |  |         |            |         |   |         |  |   |            | 
| |                      |  | $       | 21,138,000 |         | $ | 874,000 |  | $ | 22,012,000 | 
| |                      |  |         |            |         |   |         |  |   |            | 

| |                  |  |         |            |         |   |           |  |   |            | 
| | ---------------- |  | ------- | ---------- | ------- | - | --------- |  | - | ---------- | 
| |                  |  | 2009    |            |         |   |          
| |                  |  |         |            |         |   |          
| |                  |  | Level 1 |            | Level 2 |   | Total     | 
| |                  |  |         |            |         |   |          
| | Cash equivalents |  | $       | 21,230,000 |         |   |          |  | $ | 21,230,000 | 
| | Securities       |  |         | 202,000    |         | $ | 1,405,000 |  |   | 1,607,000  | 
| |                  |  |         |            |         |   |           |  |   |            | 
| |                  |  | $       | 21,432,000 |         | $ | 1,405,000 |  | $ | 22,837,000 | 
| |                  |  |         |            |         |   |           |  |   |            | 

Securities
include common stock of $242,000 and $202,000 at December 31, 2010 and 2009,
respectively, valued on the last business day of the year at the last available
reported sales price on the primary securities exchange (Level 1) and municipal
bonds of $874,000 and $1,405,000 at December 31, 2010 and 2009, respectively,
valued based on prices obtained from pricing sources, which derive values from
observable inputs (Level 2).

F-6

---



Note A - Summary Of Significant Accounting Policies (Continued)

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[4]  | 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 net operating loss carryforwards and
 temporary differences between the basis of assets and liabilities for
 financial reporting purposes and tax purposes.                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[5]  | Furniture, Equipment and Leasehold Improvements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Furniture,
 equipment and leasehold improvements are stated at cost, net of accumulated
 depreciation and amortization. Depreciation is calculated using the straight-line
 method over the estimated useful lives of the assets, generally five years.
 Leasehold improvements are amortized over the shorter of the estimated useful
 life of the improvements or period of the lease.                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[6]  | Cash Equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Cash equivalents
 consist of highly liquid investments purchased with an original maturity of
 three months or less. Cash equivalents are carried at fair value and amount
 to $20,896,000 and $21,230,000 at December 31, 2010 and 2009, respectively,
 consisting of money market funds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Cash
 equivalents  restricted represents $1,532,000 of cash invested in a money
 market account which serves as collateral for a secured demand note payable
 in the amount of $1,200,000 to SBS (See Note I).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[7]  | Advertising Costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Advertising
 costs are charged to expense as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[8]  | 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.                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[9]  | Per Share Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Basic
 earnings (loss) per share is calculated by dividing net income (loss) by the
 weighted average outstanding common shares during the year. 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 Company incurred a net loss for each of the
 years ended December 31, 2010, 2009 and 2008. Accordingly, basic and diluted
 net loss per common share are the same for each year as the effect of stock
 options is anti-dilutive. In 2010, 2009 and 2008, 1,503,200, 1,719,700 and
 1,767,200 common shares, respectively, issuable upon the exercise of options
 were not included in the computation.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[10] | Revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Commission
 revenues and fees earned on customer trades together with related clearing
 expenses are recorded on a trade-date basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Trading
 profits are also recorded on a trade-date basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Investment
 banking revenue includes gains and fees, net of syndicate expenses, arising
 from underwriting syndicates in which the Company participates. Investment
 banking management fees are recorded on the offering date, sales concessions
 on the settlement date and underwriting fees at the time the underwriting is
 completed and the income is reasonably determinable.                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Interest is
 recorded on an accrual basis and dividends are recorded on the ex-dividend
 date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[11] | Stock-Based Compensation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Share-based
 payments to employees, including grants of employee stock options, are
 recognized in the statement of operations as an operating expense, based on
 their fair values on the grant date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-7

---



Note A- Organization And Summary of Significant Accounting Policies (Continued)

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Share-based
 compensation costs are recognized on a straight-line basis over the requisite
 service periods of awards which would normally be the vesting period of the
 options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | Cash flows
 resulting from the tax benefits of the tax deduction in excess of the
 compensation cost recognized for these options are classified as financing
 cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[12] | Intangibles:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | Purchased
 intangibles which have finite useful lives are principally being amortized
 using the straight-line method over estimated useful lives of three to five
 years (see Note D). Domain names and other intellectual property which are
 deemed to have an indefinite useful life are not amortized but are tested for
 impairment annually or more frequently if events or changes in circumstances
 indicate that the asset might be impaired. The impairment test for
 indefinite-lived intangibles consists of a comparison of their fair value with
 their carrying amount.                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[13] | Valuation of Long-Lived Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | The Company
 evaluates the recoverability of its long-lived assets including amortizable intangibles and recognizes an
 impairment loss 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 events or
 changes in circumstances indicate that its carrying value may not be
 recoverable. 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 2009, the Financial Accounting
 Standards Board (FASB) finalized guidance in determining whether an
 enterprise has a controlling financial interest in a variable interest
 entity. This determination identifies the primary beneficiary of a variable
 interest entity as the enterprise that has both the power to direct the
 activities of a variable interest entity that most significantly impacts the
 entitys economic performance, and the obligation to absorb losses or the
 right to receive benefits of the entity that could potentially be significant
 to the variable interest entity. This guidance also requires ongoing
 reassessments of whether an enterprise is the primary beneficiary and
 eliminates the quantitative approach previously required for determining the
 primary beneficiary. New provisions of this guidance were effective January
 1, 2010. The adoption of the new guidance did not have any impact on the
 Companys financial statements.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | In June 2009, the FASB issued guidance to
 improve transparency about transfers of financial assets and a transferors
 continuing involvement, if any, with transferred financial assets. This
 guidance removes the concept of a qualifying special-purpose entity and
 removes the exception from applying previous guidance to variable interest
 entities that are qualifying special-purpose entities; limits the
 circumstances in which a transferor derecognizes a portion or component of a
 financial asset; defines a participating interest; requires a transferor to
 recognize and initially measure at fair value all assets obtained and
 liabilities incurred as a result of a transfer accounted for as a sale; and
 requires enhanced disclosures. This guidance was adopted by the Company
 beginning January 1, 2010 and did not have any impact on the Companys
 financial statements.                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | In January 2010, the FASB issued guidance
 that requires some new disclosures and clarifies some existing disclosure
 requirements about fair value measurements which is effective for interim and
 annual reporting periods beginning after December 15, 2009. The guidance was
 adopted by the Company as of January 1, 2010 and did not have any impact on
 the Companys disclosures. Additionally, these amended standards require
 presentation of disaggregated activity within the reconciliation for fair
 value measurements using significant unobservable inputs (Level 3) and is
 effective for fiscal years beginning after December 15, 2010. The Company
 does not expect the amended standards to have any impact on its disclosures.                                                                                                                                                                                                                                               

F-8

---



Note B - Investment In Affiliates

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

|                                     |  |  |     |           |        |   |         |   |   |           | 
|------------------------------------ |  |  | --- | --------- | ------ | - | ------- | - | - | --------- | 
|December
 31, 2010                   |  |  | SBS |           | SBSFPC |   | TOTAL   |  
|                                     |  |  |     |           |        |   |         |  
|                                     |  |  |     |           |        |   |         |   |   |           | 
|Investment and advances              |  |  | $   | 9,512,000 |        | $ | 304,000 |   | $ | 9,816,000 | 
|                                     |  |  |     |           |        |   |         |   |   |           | 
|Income (loss) from equity
 investees |  |  | $   | 4,102,000 |        | $ | (24,000 | ) | $ | 4,078,000 | 
|                                     |  |  |     |           |        |   |         |   |   |           | 
|Distributions                        |  |  | $   | 3,344,000 |        | $ | 2,000   |   | $ | 3,346,000 | 
|                                     |  |  |     |           |        |   |         |   |   |           | 

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

|                                     |  |  |     |           |        |   |          |   |   |           | 
|------------------------------------ |  |  | --- | --------- | ------ | - | -------- | - | - | --------- | 
|December
 31, 2008                   |  |  | SBS |           | SBSFPC |   | TOTAL    |  
|                                     |  |  |     |           |        |   |          |  
|                                     |  |  |     |           |        |   |          |   |   |           | 
|Income (loss) from equity
 investees |  |  | $   | 2,134,000 |        | $ | (435,000 | ) | $ | 1,699,000 | 
|                                     |  |  |     |           |        |   |          |   |   |           | 
|Distributions                        |  |  | $   | 1,078,000 |        | $ | 21,000   |   | $ | 1,099,000 | 
|                                     |  |  |     |           |        |   |          |   |   |           | 

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

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

Summarized financial data of
SBS is as follows:

|                                                                                              |  |      |            |      |   |            |  |   |            | 
|--------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                                                              |  | 2010 |            | 2009 |   | 2008       | 
|                                                                                              |  |      |            |      |   |            | 
|                                                                                              |  |      |            |      |   |            |  |   |            | 
|Total assets, including secured demand note of 1,200,000 in each year
 due from Siebert       |  | $    | 37,741,000 |      | $ | 36,018,000 |  |   |            | 
|Total liabilities, including subordinated liabilities $1,200,000 in
 each year due to Siebert |  |      | 18,530,000 |      |   | 18,355,000 |  |   |            | 
|Total members capital                                                                        |  |      | 19,211,000 |      |   | 17,663,000 |  |   |            | 
|Regulatory minimum net capital requirement                                                    |  |      | 1,122,000  |      |   | 1,111,000  |  |   |            | 
|Total revenue                                                                                 |  |      | 48,769,000 |      |   | 45,391,000 |  | $ | 31,562,000 | 
|Net income                                                                                    |  |      | 8,372,000  |      |   | 8,749,000  |  |   | 4,354,000  | 

During 2010, 2009 and 2008,
Siebert charged SBS $75,000, $75,000 and $103,000, respectively for general and
administrative services, which Siebert believes approximates the cost of
furnishing such services. In addition, during each of the years 2010, 2009 and
2008, Siebert earned interest income of $48,000, $48,000 and $64,000,
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 $4,000, $10,000 and
$46,000 (see Note I). Further, on November 1, 2010, Siebert entered into
a temporary subordinated loan agreement with SBS in the amount of $10 million bearing
interest at 2% and maturing on December 15, 2010. The note was repaid in
December 2010 and interest received from SBS amounted to $25,000.

Sieberts share of
undistributed earnings from SBS amounts to $9,021,000 and $8,263,000 at
December 31, 2010 and 2009, 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:

| |                        |  |      |             |      |   |             |   |   |            |   
| | ---------------------- |  | ---- | ----------- | ---- | - | ----------- | - | - | ---------- | --
| |                        |  | 2010 |             | 2009 |   | 2008        |  
| |                        |  |      |             |      |   |             |  
| |                        |  |      |             |      |   |             |   |   |            |   
| | Total assets           |  | $    | 165,308,000 |      | $ | 134,144,000 |   |   |            |   
| | Total liabilities      |  |      | 164,396,000 |      |   | 133,154,000 |   |   |            |   
| | Total members capital |  |      | 913,000     |      |   | 990,000     |   |   |            |   
| | Total revenue          |  |      | 124,000     |      |   | 23,000      |   | $ | (1,008,000 | )*
| | Net loss               |  |      | (72,000     | )    |   | (188,000    | ) |   | (1,305,000 | ) 

|  |                                                          
|- | ---------------------------------------------------------
|* | Attributable to unrealized
 loss on derivative contracts.

At December 31, 2010 and
2009, SBSFPC had an accumulated loss of $287,000 and $210,000, respectively of
which Sieberts share was $96,000 and $70,000, respectively.

F-9

---



Note C - Furniture, Equipment And Leasehold Improvements, Net

Furniture, equipment and
leasehold improvements consist of the following:

|                                                |  |              |            |      |   |           |  
|----------------------------------------------- |  | ------------ | ---------- | ---- | - | --------- | -
|                                                |  | December 31, |           
|                                                |  |              |           
|                                                |  | 2010         |            | 2009 |  
|                                                |  |              |            |      |  
|                                                |  |              |            |      |   |           |  
|Equipment                                       |  | $            | 2,524,000  |      | $ | 2,450,000 |  
|Leasehold improvements                          |  |              | 36,000     |      |   | 62,000    |  
|Furniture and fixtures                          |  |              | 28,000     |      |   | 34,000    |  
|                                                |  |              |            |      |   |           |  
|                                                |  |              |            |      |   |           |  
|                                                |  |              | 2,588,000  |      |   | 2,546,000 |  
|Less accumulated
 depreciation and amortization |  |              | (1,342,000 | )    |   | (977,000  | )
|                                                |  |              |            |      |   |           |  
|                                                |  |              |            |      |   |           |  
|                                                |  | $            | 1,246,000  |      | $ | 1,569,000 |  
|                                                |  |              |            |      |   |           |  

Depreciation and amortization expense for the
years ended December 31, 2010, 2009 and 2008 amounted to $523,000, $457,000 and
$383,000, respectively.

Note D - Intangible Assets

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 E).

Intangible assets consist of
the following:

|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|---------------------------------- |  | ----------------------- | --------- | ------------------------- | - | ----------------------- |  | ------------------------- | --------- |  | - | --------- | 
|                                   |  | December 31, 2010       |           | December 31, 2009         |  
|                                   |  |                         |           |                           |  
|                                   |  | Gross
 Carrying
 Amount |           | Accumulated
 Amortization |   | Gross
 Carrying
 Amount |  | Amortization
 Accumulated |          
|                                   |  |                         |           |                           |   |                         |  |                           |          
|Amortizable assets:                |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Website, content and
 non-compete  |  | $                       | 1,850,000 |                           | $ | 1,850,000               |  | $                         | 1,850,000 |  | $ | 1,850,000 | 
|Retail brokerage accounts          |  |                         | 2,638,000 |                           |   | 2,590,000               |  |                           | 2,588,000 |  |   | 2,588,000 | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  | $                       | 4,488,000 |                           | $ | 4,440,000               |  | $                         | 4,438,000 |  | $ | 4,438,000 | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Unamortized intangible
 assets:    |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Domain name/intellectual
 property |  | $                       | 600,000   |                           |   |                         |  | $                         | 750,000   |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Amortization expense               |  |                         |           |                           | $ | 2,000                   |  |                           |           |  | $ | 25,000    | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 

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

During 2010,
the Company recorded an impairment charge and wrote down the carrying value of
its unamortized intangible assets by $150,000 representing the excess of
carrying value over its fair value. Such write down was due to a continuing decline in the
Companys revenue. The Company valued the domain name using
the income approach methodology known as the relief from royalty method. The
premise behind the valuation of these assets is that a buyer would be willing
to pay a royalty for the right to use an established or recognized trade name
in order to gain market acceptance, which a product or service otherwise might
not enjoy.

F-10

---



Note E - Income Taxes

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

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

|                                         |  |                         |           |      |   |            |   |   |            |  
|---------------------------------------- |  | ----------------------- | --------- | ---- | - | ---------- | - | - | ---------- | -
|                                         |  | Year Ended December 31, |          
|                                         |  |                         |          
|                                         |  | 2010                    |           | 2009 |   | 2008       |  
|                                         |  |                         |           |      |   |            |  
|                                        
|Federal income tax
 (benefit) provision: |  |                         |           |      |   |            |   |   |            |  
|                                         |  |                         |           |      |   |            |   |   |            |  
|Current                                  |  | $                       | 286,000   |      | $ | (656,000   | ) | $ | (787,000   | )
|Deferred                                 |  |                         | 731,000   |      |   | 85,000     |   |   |           |  
|                                         |  |                         |           |      |   |            |   |   |            |  
|                                         |  |                         |           |      |   |            |   |   |            |  
|                                         |  |                         | 1,017,000 |      |   | (571,000   | ) |   | (787,000   | )
|                                         |  |                         |           |      |   |            |   |   |            |  
|                                         |  |                         |           |      |   |            |   |   |            |  
|State and local:                         |  |                         |           |      |   |            |   |   |            |  
|                                         |  |                         |           |      |   |            |   |   |            |  
|Current                                  |  |                         |          |      |   | (486,000   | ) |   | 37,000     |  
|Deferred                                 |  |                         | 592,000   |      |   | (260,000   | ) |   | (281,000   | )
|                                         |  |                         |           |      |   |            |   |   |            |  
|                                         |  |                         |           |      |   |            |   |   |            |  
|                                         |  |                         | 592,000   |      |   | (746,000   | ) |   | (244,000   | )
|                                         |  |                         |           |      |   |            |   |   |            |  
|                                         |  |                         |           |      |   |            |   |   |            |  
|Total:                                   |  |                         |           |      |   |            |   |   |            |  
|Current                                  |  |                         | 286,000   |      |   | (1,142,000 | ) |   | (750,000   | )
|Deferred                                 |  |                         | 1,323,000 |      |   | (175,000   | ) |   | (281,000   | )
|                                         |  |                         |           |      |   |            |   |   |            |  
|                                         |  |                         |           |      |   |            |   |   |            |  
|                                         |  | $                       | 1,609,000 |      | $ | (1,317,000 | ) | $ | (1,031,000 | )
|                                         |  |                         |           |      |   |            |   |   |            |  

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

|                                                                 |  |                         |           |      |   |             |   |   |            |  
|---------------------------------------------------------------- |  | ----------------------- | --------- | ---- | - | ----------- | - | - | ---------- | -
|                                                                 |  | Year Ended December 31, |          
|                                                                 |  |                         |          
|                                                                 |  | 2010                    |           | 2009 |   | 2008        |  
|                                                                 |  |                         |           |      |   |             |  
|                                                                 |  |                         |           |      |   |             |   |   |            |  
|Expected income tax
 benefit at statutory Federal tax rate (34%) |  | $                       | (351,000  | )    | $ | (850,000    | ) | $ | (949,000   | )
|State and local taxes, net
 of Federal tax effect                |  |                         | (67,000   | )    |   | (163,000    | ) |   | (160,000   | )
|Reversal of overaccrual of
 prior years taxes                   |  |                         |           |      |   | (330,000    | ) |   |            |  
|Increase in valuation
 allowance                                 |  |                         | 1,980,000 |      |   |             |   |   |            |  
|Permanent difference                                             |  |                         | 47,000    |      |   | 51,000      |   |   | 40,000     |  
|Other                                                            |  |                         |           |      |   | (25,000     | ) |   | 38,000     |  
|                                                                 |  |                         |           |      |   |             |   |   |            |  
|                                                                 |  |                         |           |      |   |             |   |   |            |  
|Income tax expense
 (benefit)                                    |  | $                       | 1,609,000 |      | $ | (1,317,0000 | ) | $ | (1,031,000 | )
|                                                                 |  |                         |           |      |   |             |   |   |            |  

F-11

---



Note E - Income Taxes (Continued)

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, |           
|                                                 |  |              |           
|                                                 |  | 2010         |            | 2009 |  
|                                                 |  |              |            |      |  
|Deferred tax asset:                              |  |              |            |      |   |           |  
|Net operating loss
 carryforwards                |  | $            | 1,592,000  |      | $ | 657,000   |  
|Employee stock based
 compensation               |  |              | 234,000    |      |   | 234,000   |  
|Retail brokerage accounts                        |  |              | 515,000    |      |   | 595,000   |  
|Contribution carryover                           |  |              | 162,000    |      |   | 55,000    |  
|Accrued compensation and
 other                  |  |              | 47,000     |      |   | 228,000   |  
|                                                 |  |              |            |      |   |           |  
|                                                 |  |              |            |      |   |           |  
|                                                 |  |              | 2,550,000  |      |   | 1,769,000 |  
|Valuation
 allowance                             |  |              | (2,083,000 | )    |   |          |  
|                                                 |  |              |            |      |   |           |  
|                                                 |  |              |            |      |   |           |  
|                                                 |  |              | 467,000    |      |   | 1,769,000 |  
|Deferred tax
 liability:                         |  |              |            |      |   |           |  
|Acquired intangible assets                       |  |              | (243,000   | )    |   | (304,000  | )
|Furniture, equipment and
 leasehold improvements |  |              | (224,000   | )    |   | (142,000  | )
|                                                 |  |              |            |      |   |           |  
|                                                 |  |              |            |      |   |           |  
|                                                 |  | $            | 0          |      | $ | 1,323,000 |  
|                                                 |  |              |            |      |   |          

Due to cumulative losses
incurred by the Company during the current and prior two years, the Company is
unable to conclude that it is more likely than not that it will realize its net
deferred tax asset and, accordingly, has recorded a valuation allowance to
fully offset its deferred tax asset at December 31, 2010.

At December 31, 2010, the
Company has state net operating loss carryforwards aggregating $8.2 million
which expire through 2030 in various states. In addition, the Company has
federal net operating loss carryforwards of $2.2 million at December 31, 2010,
which expire in 2030. The Company also has additional federal net operating
loss carryforwards of $775,000 at December 31, 2010 which is attributable to
WFN and expires through 2020. Utilization of WFNs federal net operating loss
carryforwards is subject to annual limitations under Section 382 of the
Internal Revenue Code.

The Company applied the
more-likely-than not recognition threshold to all tax positions taken or
expected to be taken in a tax return which resulted in no unrecognized tax
benefits reflected in the 2010 financial statements. The Company classifies
interest and penalties that would accrue according to the provisions of
relevant tax law as income taxes. Tax years for 2007 and thereafter are subject
to tax examinations by federal and state authorities.

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

For federal and certain
state and local jurisdictions, the 2007 through 2010 tax years remain open for
examination by the taxing authorities. For other states the 2006 through 2010
tax years remain open for examination.

Note F - 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, 2010 and 2009, Siebert had net capital
of approximately $20,352,000 and $21,148,000, respectively, as compared with
net capital requirements of $250,000. Siebert claims exemption from the reserve
requirement under Section 15c3-3(k)(2)(ii).

On January 23, 2008, the
Board of Directors of the Company authorized a buy back of up to 300,000 shares
of common stock. Shares will be purchased from time to time in the open market
and in private transactions. During 2008, 2009 and 2010, the Company
repurchased 10,231, 16,790 and 62,647 shares of common stock for an average
price of $3.03, $1.99 and $2.10, respectively.

On June 9, 2008, the Board
of Directors declared a dividend of ten cents per share on the common stock of
the Company, which was paid on June 30, 2008 to shareholders of record at the
close of business on June 23, 2008. The Chief Executive Officer of the

F-12

---



Company waived the right to
receive the dividend in excess of the aggregate amount paid to other
shareholders which amounted to approximately $234,000.

Note G - Options

The Companys 2007 Long-Term
Incentive Plan (the Plan), authorizes the grant of options to purchase up to
an aggregate of 2,000,000 shares, subject to adjustment in certain
circumstances. Both non-qualified options and options intended to qualify as
Incentive Stock Options under Section 422 of the Internal Revenue Code, may
be granted under the Plan. A Stock Option Committee of the Board of Directors
administers the Plan. The committee has the authority to determine when options
are granted, the term during which an option may be exercised (provided no
option has a term exceeding 10 years), the exercise price and the exercise
period. The exercise price shall not be less than the fair market value on the
date of grant. No option may be granted under the Plan after December 2017. Generally,
employee options vest 20% per year for five years and expire ten years from the
date of grant. At December 31, 2010, options for 1,700,000 shares of common
stock are available for grant under the Plan.

A summary of the Companys
stock option transactions for the three years ended December 31, 2010 is
presented below:

|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|---------------------------------------------- | --- | ------ | --------- | ---------------------------------- | - | ------ |  | ---------------------------------- | --------- | ------ | - | ---------------------------------- |  |  | --------- |  | - | ---- | 
|                                               |     | 2010   |           | 2009                               |   | 2008   | 
|                                               |     |        |           |                                    |   |        | 
|                                               |     | Shares |           | Weighted
 Average
 Exercise
 Price |   | Shares |  | Weighted
 Average
 Exercise
 Price |           | Shares |   | Weighted
 Average
 Exercise
 Price | 
|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    | 
|                                              
|Outstanding - beginning of the year            |     |        | 1,719,700 |                                    | $ | 4.00   |  |                                    | 1,767,200 |        | $ | 4.07                               |  |  | 1,467,200 |  | $ | 4.28 | 
|Granted                                        |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  | 300,000   |  |   | 3.05 | 
|Forfeited                                      |     |        | (216,500  | )                                  | $ | 2.98   |  |                                    | (47,500   | )      | $ | 6.91                               |  |  |           |  |   |      | 
|Exercised                                      |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|Outstanding - end of year                      | (a) |        | 1,503,200 |                                    | $ | 4.14   |  |                                    | 1,719,700 |        | $ | 4.00                               |  |  | 1,767,200 |  | $ | 4.07 | 
|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|Fully vested and expected to vest at year end  | (a) |        | 1,498,200 |                                    | $ | 4.15   |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|Exercisable at end of year                     | (a) |        | 1,498,200 |                                    | $ | 4.15   |  |                                    | 1,709,700 |        | $ | 4.00                               |  |  | 1,742,200 |  | $ | 4.08 | 
|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|                                               |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  |   |      | 
|Weighted average fair value of options granted |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |  | $ | 0.53 | 

|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(a) | Weighted average remaining
 contractual terms of 2 years and aggregate intrinsic value of $0.

As of December 31, 2010,
there was $6,000 of unrecognized compensation costs related to unvested options
which is expected to be recognized over a weighted-average period of one year.

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

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

The weighted average
expected life reflects the alternative simplified method permitted under
authoritative accounting guidance, which defines the expected life as the
average of the contractual term of the options and the weighted-average vesting
period for all option tranches. The expected dividend yield is based on
historical dividends. The risk-free interest rate is based on the annual yield
on the measurement date of a ten year Unites States Treasury Bond, the maturity
of which equals the options expected life. Expected volatility is based on
historical volatility over a period commensurate with the options expected
life. There were no options granted during 2010 and 2009.

Note H  New Clearing Agreement

As part of the negotiations
with one of the Companys clearing brokers on a fully disclosed clearing
agreement which was entered into on May 5, 2010, the Company resolved at $3
million the amount due to the Company from the clearing firm on past
transactions cleared by the Company. This amount is included in commissions and
fees revenue for the year ended December 31, 2010.

F-13

---



Note I - Commitments, Contingencies And Other

Retail customer transactions
are cleared through clearing brokers on a fully disclosed basis. If customers
do not fulfill their contractual obligations, the clearing broker may charge
Siebert for any loss incurred in connection with the purchase or sale of
securities at prevailing market prices to satisfy the customer obligations.
Siebert regularly monitors the activity in its customer accounts for compliance
with its margin requirements. Siebert is exposed to the risk of loss on
unsettled customer transactions if customers are unable to fulfill their
contractual obligations. There were no material losses for unsettled customer
transactions in 2010, 2009 or 2008.

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

The Company rents discount
retail brokerage and other office space under long-term operating leases
expiring in various periods through 2013. 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 |          
|                          |  |        |          
|                          |  |        |           | 
|2011                      |  |        | 781,000   | 
|2012                      |  |        | 580,000   | 
|2013                      |  |        | 15,000    | 
|                          |  |        |           | 
|                          |  |        |           | 
|                          |  | $      | 1,376,000 | 
|                          |  |        |           | 

Rent expense, including
escalations for operating costs, amounted to approximately $1,274,000,
$1,279,000 and $1,319,000 for the years ended December 31, 2010, 2009 and 2008,
respectively. Rent is being charged to expense over the entire lease term on a
straight-line basis.

Siebert sponsors a defined
contribution retirement plan under Section 401(k) of the Internal Revenue Code
that covers substantially all employees. Participant contributions to the plan
are voluntary and are subject to certain limitations. Siebert may also make
discretionary contributions to the plan. No contributions were made by Siebert
in 2010, 2009 and 2008.

Siebert is party to a
Secured Demand Note Collateral Agreement with SBS which obligates Siebert to
lend SBS, on a subordinated basis, up to $1,200,000. The secured demand note
payable held by SBS and a related $1,200,000 receivable due from SBS are
included in investments in and advances to equity investees in the accompanying
consolidated statement of financial condition. Amounts that Siebert is
obligated to lend under this arrangement are collateralized by cash equivalents
of $1,532,000. Any amounts loaned will bear interest at 4% per annum and are
repayable on August 31, 2012.

Note J - Summarized Quarterly Financial Data (Unaudited)

|                           |  |                |            |                 |   |                |  |                 |            |                |   |                 |  |                |           |                 |   |           |  |   |           |   |   |           |  
|-------------------------- |  | -------------- | ---------- | --------------- | - | -------------- |  | --------------- | ---------- | -------------- | - | --------------- |  | -------------- | --------- | --------------- | - | --------- |  | - | --------- | - | - | --------- | -
|                           |  | 2010           |            | 2009            |  
|                           |  |                |            |                 |  
|                           |  | First
 Quarter |            | Second
 Quarter |   | Third
 Quarter |  | Fourth
 Quarter |            | First
 Quarter |   | Second
 Quarter |  | Third
 Quarter |           | Fourth
 Quarter |  
|                           |  |                |            |                 |   |                |  |                 |            |                |   |                 |  |                |           |                 |  
|Revenue                    |  | $              | 4,313,000  |                 | $ | 7,396,000      |  | $               | 3,742,000  |                | $ | 5,319,000       |  | $              | 7,000,000 |                 | $ | 7,274,000 |  | $ | 5,360,000 |   | $ | 5,756,000 |  
|Net (loss) income          |  | $              | (1,194,000 | )               | $ | 782,000        |  | $               | (3,558,000 | )              | $ | 1,330,000       |  | $              | (332,000  | )               | $ | 564,000   |  | $ | (451,000  | ) | $ | (964,000  | )
|Earnings (loss) per share: |  |                |            |                 |   |                |  |                 |            |                |   |                 |  |                |           |                 |   |           |  |   |           |   |   |           |  
|Basic                      |  | $              | (0.05      | )               | $ | 0.04           |  | $               | (0.16      | )              | $ | 0.06            |  | $              | (0.01     | )               | $ | 0.03      |  | $ | (0.02     | ) | $ | (0.05     | )
|Diluted                    |  | $              | (0.05      | )               | $ | 0.04           |  | $               | (0.16      | )              | $ | 0.06            |  | $              | (0.01     | )               | $ | 0.03      |  | $ | (0.02     | ) | $ | (0.05     | )

F-14

---



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

Board of
ManagersSiebert,
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. (the Company) as of December 31, 2010
and 2009, and the related statements of operations, changes in members
capital, changes in subordinated borrowings and cash flows for each of the
years in the three-year period ended December 31, 2010. 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
audits 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, 2010 and 2009, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 2010 in conformity with accounting principles generally
accepted in the United States of America.

/s/
EisnerAmper LLPNew York, New
YorkFebruary 18, 2011

F-15

---



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

Statements of Financial
Condition

|                                                      |  |              |            |      |   |            | 
|----------------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | 
|                                                      |  | December 31, |           
|                                                      |  |              |           
|                                                      |  | 2010         |            | 2009 |  
|                                                      |  |              |            |      |  
|                                                      |  |              |            |      |   |            | 
|ASSETS                                                |  |              |            |      |   |            | 
|Cash and cash equivalents                             |  | $            | 19,859,779 |      | $ | 28,196,681 | 
|Accounts receivable                                   |  |              | 2,478,545  |      |   | 2,336,532  | 
|Securities owned, at fair value                       |  |              | 11,816,604 |      |   |            | 
|Receivable from broker                                |  |              |            |      |   | 1,443,290  | 
|Receivable from affiliate                             |  |              | 25,354     |      |   | 25,286     | 
|Other receivable                                      |  |              |            |      |   | 491,441    | 
|Secured demand notes                                  |  |              | 1,200,000  |      |   | 1,200,000  | 
|Furniture, equipment and leasehold improvements,
 net |  |              | 1,418,348  |      |   | 1,274,347  | 
|Other assets                                          |  |              | 942,464    |      |   | 1,050,122  | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  | $            | 37,741,094 |      | $ | 36,017,699 | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|LIABILITIES AND MEMBERS CAPITAL                      |  |              |            |      |   |            | 
|Liabilities:                                          |  |              |            |      |   |            | 
|Payable to affiliate                                  |  | $            | 93,627     |      | $ | 50,130     | 
|Due to broker                                         |  |              | 505,605    |      |   |            | 
|Accounts payable and accrued expenses                 |  |              | 15,989,159 |      |   | 16,612,909 | 
|Deferred rent                                         |  |              | 741,551    |      |   | 491,441    | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              | 17,329,942 |      |   | 17,154,480 | 
|                                                      |  |              |            |      |   |            | 
|Subordinated debt                                     |  |              | 1,200,000  |      |   | 1,200,000  | 
|                                                      |  |              |            |      |   |            | 
|Members capital                                      |  |              | 19,211,152 |      |   | 17,663,219 | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  | $            | 37,741,094 |      | $ | 36,017,699 | 
|                                                      |  |              |            |      |   |            | 

See notes to
financial statements

F-16

---



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

Statements of Operations

|                                   |  |              |            |      |   |            |  |   |            | 
|---------------------------------- |  | ------------ | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                   |  | December 31, |           
|                                   |  |              |           
|                                   |  | 2010         |            | 2009 |   | 2008       | 
|                                   |  |              |            |      |   |            | 
|Revenues:                          |  |              |            |      |   |            |  |   |            | 
|Investment banking                 |  | $            | 41,275,623 |      | $ | 36,666,383 |  | $ | 20,880,695 | 
|Trading profits                    |  |              | 7,488,092  |      |   | 8,672,233  |  |   | 10,405,400 | 
|Interest and other                 |  |              | 5,429      |      |   | 52,765     |  |   | 275,923    | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              | 48,769,144 |      |   | 45,391,381 |  |   | 31,562,018 | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|Expenses:                          |  |              |            |      |   |            |  |   |            | 
|Employee compensation and benefits |  |              | 33,076,985 |      |   | 30,660,150 |  |   | 22,223,182 | 
|Clearing fees                      |  |              | 194,957    |      |   | 235,091    |  |   | 373,241    | 
|Communications                     |  |              | 880,792    |      |   | 772,021    |  |   | 730,755    | 
|Occupancy                          |  |              | 1,020,409  |      |   | 757,778    |  |   | 708,035    | 
|Professional fees                  |  |              | 680,673    |      |   | 344,838    |  |   | 153,025    | 
|Interest - related party           |  |              | 73,000     |      |   | 48,000     |  |   | 64,000     | 
|State and local income tax         |  |              | 435,187    |      |   | 225,363    |  |   | 130,518    | 
|General and administrative         |  |              | 4,035,029  |      |   | 3,599,343  |  |   | 2,824,879  | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              | 40,397,032 |      |   | 36,642,584 |  |   | 27,207,635 | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|Net income                         |  | $            | 8,372,112  |      | $ | 8,748,797  |  | $ | 4,354,383  | 
|                                   |  |              |            |      |   |            |  |   |            | 

See notes to
financial statements

F-17

---



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

Statements of Changes in
Members Capital

|                            |  |   |            |  
|--------------------------- |  | - | ---------- | -
|Balance - January 1, 2008   |  | $ | 9,900,469  |  
|Distributions
 to members   |  |   | (2,199,542 | )
|Net income                  |  |   | 4,354,383  |  
|                            |  |   |            |  
|                            |  |   |            |  
|Balance - December 31, 2008 |  |   | 12,055,310 |  
|Distributions
 to members   |  |   | (3,140,888 | )
|Net income                  |  |   | 8,748,797  |  
|                            |  |   |            |  
|                            |  |   |            |  
|Balance - December 31, 2009 |  |   | 17,663,219 |  
|Distributions
 to members   |  |   | (6,824,179 | )
|Net income                  |  |   | 8,372,112  |  
|                            |  |   |            |  
|                            |  |   |            |  
|Balance - December 31, 2010 |  | $ | 19,211,152 |  
|                            |  |   |            |  

See notes to
financial statements

F-18

---



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

Statements of Changes in Subordinated Borrowings

|                            |  |   |             |  
|--------------------------- |  | - | ----------- | -
|Balance - January 1, 2008   |  | $ | 1,200,000   |  
|Borrowings                  |  |   |             |  
|Repayments                  |  |   |             |  
|                            |  |   |             |  
|                            |  |   |             |  
|Balance - December 31, 2008 |  |   | 1,200,000   |  
|Borrowings                  |  |   |             |  
|Repayments                  |  |   |             |  
|                            |  |   |             |  
|                            |  |   |             |  
|Balance - December 31, 2009 |  |   | 1,200,000   |  
|Borrowings                  |  |   | 10,000,000  |  
|Repayments                  |  |   | (10,000,000 | )
|                            |  |   |             |  
|                            |  |   |             |  
|Balance - December 31, 2010 |  | $ | 1,200,000   |  
|                            |  |   |             |  

See notes to
financial statements

F-19

---



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

Statements of Cash Flows

|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|--------------------------------------------------------------------------------------------------------------- |  | ------------ | ----------- | ---- | - | ---------- | - | - | ---------- | -
|                                                                                                                |  | December 31, |            
|                                                                                                                |  |              |            
|                                                                                                                |  | 2010         |             | 2009 |   | 2008       |  
|                                                                                                                |  |              |             |      |   |            |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|Cash flows from operating activities:                                                                           |  |              |             |      |   |            |   |   |            |  
|Net income                                                                                                      |  | $            | 8,372,112   |      | $ | 8,748,797  |   | $ | 4,354,383  |  
|Adjustments to reconcile net income to net
 cash (used in) provided by operating activities:                    |  |              |             |      |   |            |   |   |            |  
|Depreciation and amortization                                                                                   |  |              | 237,045     |      |   | 99,962     |   |   | 77,935     |  
|Changes in:                                                                                                     |  |              |             |      |   |            |   |   |            |  
|Accounts receivable                                                                                             |  |              | (142,013    | )    |   | (920,947   | ) |   | (1,033,716 | )
|Due to/from broker                                                                                              |  |              | 1,948,895   |      |   | 2,324,508  |   |   | (61,363    | )
|Securities owned, at fair value                                                                                 |  |              | (11,816,604 | )    |   | 161,873    |   |   | 18,998     |  
|Other receivable                                                                                                |  |              | 491,441     |      |   |           |   |   |           |  
|Other assets                                                                                                    |  |              | 107,658     |      |   | (448,440   | ) |   | (33,835    | )
|Payable to (receivable from) affiliate                                                                          |  |              | 43,429      |      |   | (97,690    | ) |   | (73,941    | )
|Accounts payable and accrued expenses                                                                           |  |              | (623,750    | )    |   | 8,514,989  |   |   | 1,502,258  |  
|Deferred rent                                                                                                   |  |              | 250,110     |      |   |           |   |   |           |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|Net cash (used in) provided by operating
 activities                                                            |  |              | (1,131,677  | )    |   | 18,383,052 |   |   | 4,750,719  |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|Cash flows from investing activities:                                                                           |  |              |             |      |   |            |   |   |            |  
|Purchase of leasehold improvements and
 equipment                                                               |  |              | (381,046    | )    |   | (1,175,059 | ) |   | (72,995    | )
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|Cash flows from financing activities:                                                                           |  |              |             |      |   |            |   |   |            |  
|Distributions to members                                                                                        |  |              | (6,824,179  | )    |   | (3,140,888 | ) |   | (2,199,542 | )
|Subordinated borrowings                                                                                         |  |              | 10,000,000  |      |   |           |   |   |           |  
|Subordinated repayments                                                                                         |  |              | (10,000,000 | )    |   |           |   |   |           |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|Net cash used in financing activities                                                                           |  |              | (6,824,179  | )    |   | (3,140,888 | ) |   | (2,199,542 | )
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|Net (decrease) increase in cash and cash equivalents                                                            |  |              | (8,336,902  | )    |   | 14,067,105 |   |   | 2,478,182  |  
|Cash and
 cash equivalents - beginning of year                                                                  |  |              | 28,196,681  |      |   | 14,129,576 |   |   | 11,651,394 |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|Cash and cash equivalents - end of year                                                                         |  | $            | 19,859,779  |      | $ | 28,196,681 |   | $ | 14,129,576 |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|Supplemental disclosures of cash flow information:                                                              |  |              |             |      |   |            |   |   |            |  
|Taxes paid                                                                                                      |  |              |             |      |   |            |   | $ | 130,000    |  
|Interest paid                                                                                                   |  | $            | 73,000      |      | $ | 48,000     |   | $ | 64,000     |  
|                                                                                                                |  |              |             |      |   |            |   |   |            |  
|Non-cash investing activity:                                                                                    |  |              |             |      |   |            |   |   |            |  
|Receivable from landlord for reimbursement
 of leasehold improvements and corresponding deferred rent liability |  |              |             |      | $ | 491,441    |   |   |            |  

See notes to
financial statements

F-20

---



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

Notes to Financial Statements
December 31, 2010, 2009 and 2008

Note A - Organization and Summary of Significant Accounting Policies

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] | Organization:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|    | Siebert,
 Brandford, Shank & Co., L.L.C. (SBS or the Company) engages in the
 business of tax-exempt underwriting and related trading activities. The
 Company qualifies as a Minority and Women Owned Business Enterprise in
 certain municipalities.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|[2] | 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 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.                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|[3] | Investments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|    | Security
 transactions are recorded on a trade-date basis. Securities owned are valued
 at fair value. The resulting realized and unrealized gains and losses are
 reflected as trading profits.                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|    | Dividends
 are recorded on the ex-dividend date, and interest income is recognized on an
 accrual basis.                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|[4] | Fair value:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|    | Authoritative
 accounting guidance defines fair value, establishes a framework for measuring
 fair value and establishes a fair value hierarchy. Fair value is the price
 that would be received to sell an asset or paid to transfer a liability in an
 orderly transaction between market participants at the measurement date. Fair
 value measurements are not adjusted for transaction costs. The fair value
 hierarchy prioritizes inputs to valuation techniques used to measure fair
 value into three levels:
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|    | Level 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Unadjusted
 quoted prices in active markets for identical assets or liabilities.                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|    | Level 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Inputs other
 than quoted market prices that are observable, either directly or indirectly,
 and reasonably available.                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|    | Level 3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Unobservable
 inputs reflect the assumptions that the managing members develop based on
 available information about the assumptions market participants would use in
 valuing the asset or liability.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                       
|    | The
 classification of financial instruments valued at fair value as of December
 31, 2010 and 2009 is as follows:                                                                                                                                                                                                                                                                                                                                                                                                    

|                  |  |                   |            |         |   |            |  |   |            | 
|----------------- |  | ----------------- | ---------- | ------- | - | ---------- |  | - | ---------- | 
|                  |  | December 31, 2010 |           
|                  |  |                   |           
|                  |  | Level 1           |            | Level 2 |   | Total      | 
|                  |  |                   |            |         |   |            | 
|                  |  |                   |            |         |   |            |  |   |            | 
|Cash
 equivalents |  | $                 | 19,845,425 |         |   |            |  | $ | 19,845,425 | 
|Municipal
 bonds  |  |                   |            |         | $ | 11,816,604 |  | $ | 11,816,604 | 
|                  |  |                   |            |         |   |            |  |   |            | 
|                  |  | December 31, 2009 |           
|                  |  |                   |           
|                  |  | Level 1           |            | Level 2 |   | Total      | 
|                  |  |                   |            |         |   |            | 
|                  |  |                   |            |         |   |            |  |   |            | 
|Cash
 equivalents |  | $                 | 28,182,006 |         |   |            |  | $ | 28,182,006 | 

| |                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------
| | Municipal
 bonds are valued based on prices obtained from pricing sources, which derive
 values from observable inputs.

F-21

---



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

Notes to Financial Statements
December 31, 2010, 2009 and 2008

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[5] | Furniture, equipment and leasehold improvements, net:                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Furniture,
 equipment and leasehold improvements are stated at cost, net of accumulated
 depreciation and amortization. Depreciation is calculated using the
 straight-line method over the estimated useful lives of the assets, generally
 five years. Leasehold improvements are amortized over the period of the lease.                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[6] | Cash equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Cash
 equivalents represent short term, highly liquid investments which are readily
 convertible to cash and have maturities of three months or less at time of
 purchase. Cash equivalents, which are valued at fair value, consist of money
 market funds which amounted to $19,845,425 and $28,182,006 at
 December 31, 2010 and 2009, respectively.                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[7] | Use of estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The
 preparation of financial statements in conformity with accounting principles
 generally accepted in the United States of America requires management to
 make estimates and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent assets and liabilities at the date
 of the financial statements and the reported amounts of revenues and expenses
 during the reporting period. Actual results could differ from those
 estimates.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[8] | Income taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company
 is not subject to federal income taxes. Instead, the members are required to
 include in their income tax returns their respective share of the Companys
 income. The Company is subject to tax in certain state and local
 jurisdictions. Deferred taxes are not significant.                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[9] | Subsequent events:                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company
 has evaluated subsequent events through February 18, 2011, the date the
 financial statements were issued.                                                                                                                                                                                                                                                                                                                                                                 

Note B -
Subordinated Borrowings and Secured Demand Note Receivable

The
subordinated debt at December 31, 2010 and 2009 consists of a Secured
Demand Note Collateral Agreement payable to Muriel Siebert & Co., Inc.
(Siebert), a member of the Company, in the amount of $1,200,000 bearing 4%
interest and due August 31, 2012. On November 1, 2010, the Company entered
into a temporary subordinated loan agreement with Siebert in the amount of
$10,000,000 bearing interest at 2% and maturing on December 15, 2010. The note
was repaid in December 2010. Interest expense paid to Siebert for each of the
years ended December 31, 2010, 2009 and 2008 amounted to $73,000, $48,000 and $64,000,
respectively.

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

The secured
demand note receivable of $1,200,000 is collateralized by cash equivalents of
Siebert of approximately $1,536,000 at December 31, 2010 and $1,500,000 at
December 31, 2009. Interest earned on the collateral paid by Siebert to
SBS amounted to approximately $3,500, $10,000 and $46,000 in 2010, 2009 and
2008, respectively.

Note C - Furniture, Equipment and Leasehold
Improvements, Net

Furniture,
equipment and leasehold improvements consist of the following:

|                                                |  |              |           |      |   |           | 
|----------------------------------------------- |  | ------------ | --------- | ---- | - | --------- | 
|                                                |  | December 31, |          
|                                                |  |              |          
|                                                |  | 2010         |           | 2009 |  
|                                                |  |              |           |      |  
|                                                |  |              |           |      |   |           | 
|Equipment                                       |  | $            | 788,635   |      | $ | 675,406   | 
|Furniture and leasehold improvements            |  |              | 1,591,288 |      |   | 1,323,471 | 
|                                                |  |              |           |      |   |           | 
|                                                |  |              |           |      |   |           | 
|                                                |  |              | 2,379,923 |      |   | 1,998,877 | 
|Less accumulated depreciation and
 amortization |  |              | 961,575   |      |   | 724,530   | 
|                                                |  |              |           |      |   |           | 
|                                                |  |              |           |      |   |           | 
|                                                |  | $            | 1,418,348 |      | $ | 1,274,347 | 
|                                                |  |              |           |      |   |           | 

F-22

---



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

Notes to Financial Statements
December 31, 2010, 2009 and 2008

Note D - Net Capital

The Company is
subject to the SECs Uniform Net Capital Rule 15c3-1, which requires the
maintenance of minimum net capital and that the ratio of aggregate indebtedness
to net capital, both as defined, shall not exceed 15 to 1. At December 31,
2010 and 2009, the Company had net capital of $16,842,830 and $15,307,604,
respectively, which was $15,721,207 and $14,196,735, respectively, in excess of
its required net capital and its ratio of aggregate indebtedness to net capital
was 1.00 and 1.09 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 2020.
These leases call for base rent plus escalations for property taxes and other
operating expenses. Future minimum base rent under these operating leases as of
December 31, 2010 are as follows:

|              |  |        |           | 
|------------- |  | ------ | --------- | 
|Year 
 Ending |  | Amount |          
|              |  |        |          
|              |  |        |           | 
|2011          |  | $      | 901,000   | 
|2012          |  |        | 874,000   | 
|2013          |  |        | 773,000   | 
|2014          |  |        | 644,000   | 
|2015          |  |        | 564,000   | 
|Thereafter    |  |        | 1,976,000 | 
|              |  |        |           | 
|              |  |        |           | 
|              |  | $      | 5,732,000 | 
|              |  |        |           | 

Rent expense
including taxes and operating expenses for 2010, 2009 and 2008 amounted to
$1,020,409, $757,778 and $708,035, respectively.

During 2010,
the Company purchased leasehold improvements of approximately $129,000 which
were reimbursed by the landlord. The Company recorded such reimbursement as a
credit to deferred rent liability. Such amount, along with approximately
$491,000 recorded in 2009 (together an aggregate amount of $620,000), is being
recognized as a reduction of rental expense on a straight-line basis over the
term of the lease.

Rent expense is being
charged to operations on a straight-line basis resulting in a deferred rent
liability which, together with the deferred rent discussed above amounted to
$741,551 at December 31, 2010 and $491,441 at December 31, 2009.

The Company
purchased leasehold improvements of approximately $817,000 in the year ended
December 31, 2009 in connection with such lease and the landlord
reimbursed the Company $491,441 for a portion of such improvements in 2010. At
December 31, 2009, the Company recorded a receivable from the landlord of
$491,441 with a corresponding credit to deferred rent liability. Such amount
will be recognized as a reduction of rental expense on a straight-line basis
over the term of the lease.

F-23

---



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

Notes to Financial Statements
December 31, 2010, 2009 and 2008

Note F - Accounts
Payable and Accrued Expenses

Accounts
payable and accrued expenses consist of the following:

|                                               |  |              |            |      |   |            | 
|---------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | 
|                                               |  | December 31, |           
|                                               |  |              |           
|                                               |  | 2010         |            | 2009 |  
|                                               |  |              |            |      |  
|                                               |  |              |            |      |   |            | 
|Accounts payable                               |  | $            | 184,934    |      | $ | 1,360,512  | 
|Accrued bonus and other employee
 compensation |  |              | 15,341,035 |      |   | 14,800,638 | 
|Other accrued expenses                         |  |              | 463,190    |      |   | 451,759    | 
|                                               |  |              |            |      |   |            | 
|                                               |  |              |            |      |   |            | 
|                                               |  | $            | 15,989,159 |      | $ | 16,612,909 | 
|                                               |  |              |            |      |   |            | 

Note G - Other

During 2010,
2009 and 2008, the Company was charged $75,000, $75,000 and $102,500 by Siebert
for general and administrative services.

F-24

---



SIGNATURES

Pursuant to
the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

SIEBERT FINANCIAL
CORP.

| |       |                                              
| | ----- | ---------------------------------------------
| | By:   | /s/ MURIEL
 F. SIEBERT                       
| |       |                                              
| |       | Muriel F.
 Siebert                           
| |       | Chair, Chief
 Executive Officer and President
| |       |                                              
| | Date: | March 31,
 2011                              

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

|                          |  |                                                         |                
|------------------------- |  | ------------------------------------------------------- | ---------------
|Name                      |  | Title                                                   | Date           
|                          |  |                                                         |                
|/s/ Muriel
 F. Siebert    |  | Chair, Chief
 Executive Officer, President and Director | March 31,
 2011
|                          |  |                                                         |                
|Muriel F.
 Siebert        |  | (principal
 executive officer)                          |                
|                          |  |                                                         |                
|/s/ Jeanne
 Rosendale     |  | Executive
 Vice President,                              | March 31,
 2011
|                          |  |                                                         |                
|Jeanne
 Rosendale         |  | and General
 Counsel                                    |                
|                          |  |                                                         |                
|/s/ Joseph
 M. Ramos, Jr. |  | Chief
 Financial Officer                                | March 31,
 2011
|                          |  |                                                         |                
|Joseph M.
 Ramos, Jr.     |  | and
 Assistant Secretary                                |                
|                          |  | (principal
 financial and                               |                
|                          |  | accounting
 officer)                                    |                
|                          |  |                                                         |                
|/s/ Patricia
 L. Francy   |  | Director                                                | March 31,
 2011
|                          |  |                                                         |                
|Patricia L.
 Francy       |  |                                                         |                
|                          |  |                                                         |                
|/s/ Leonard
 M. Leiman    |  | Director                                                | March 31,
 2011
|                          |  |                                                         |                
|Leonard M.
 Leiman        |  |                                                         |                
|                          |  |                                                         |                
|/s/ Jane H.
 Macon        |  | Director                                                | March 31,
 2011
|                          |  |                                                         |                
|Jane H.
 Macon            |  |                                                         |                
|                          |  |                                                         |                
|/s/ Robert
 P. Mazzarella |  | Director                                                | March 31,
 2011
|                          |  |                                                         |                
|Robert P.
 Mazzarella     |  |                                                         |                
|                          |  |                                                         |                
|/s/ Nancy
 Peterson Hearn |  | Director                                                | March 31,
 2011
|                          |  |                                                         |                
|Nancy
 Peterson Hearn     |  |                                                         |                

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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., L.L.C.,
 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., L.L.C. 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  |                          | Operating
 Agreement of SBS Financial Products Company, LLC, dated effective as of April
 19, 2005, by and among Siebert Financial Corp., Napoleon Brandford III and
 Suzanne Shank. (incorporated by reference to Siebert Financial Corp.s
 Current Report on Form 8-K filed with the Securities and Exchange Commission
 on May 17, 2005)
|             |       |                          |                                                                                                                                                                                                                                                                                                                                             
|             | 10.6  |                          | Siebert
 Financial Corp. 2007 Long-Term Incentive Plan (incorporated by reference to
 Siebert Financial Corp.s Registration Statement on Form S-8 (File No.
 333-144680) filed with the Securities and Exchange Commission on July 18,
 2007)                                                                                              
|             |       |                          |                                                                                                                                                                                                                                                                                                                                             
|             | 10.7* |                          | Fully
 Disclosed Clearing Agreement, by and between National Financial Services LLC
 and Muriel Siebert & Co., Inc. dated May 5, 2010. (incorporated by
 reference to Siebert Financial Corp.s Quarterly Report on Form 10-Q filed
 with the Securities and Exchange Commission on August 16, 2010)                                        
|             |       |                          |                                                                                                                                                                                                                                                                                                                                             
|             | 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.                                                                                                                                                                  

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

|  |                                                                                                                                                                                                                                                                                          
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Portions of the indicated document have been afforded confidential
 treatment and have been filed separately with the Securities and Exchange
 Commission pursuant to Rule 24b-2 of the General Rules and Regulations
 promulgated under the Securities Exchange Act of 1934, as amended.

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