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


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Form
10-K


(Mark One)

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|--------------------------------------------------------------------------------- | 
|x ANNUAL REPORT UNDER SECTION 13 OR
 15(d)OF THE SECURITIES EXCHANGE ACT OF
 1934

For
the fiscal year ended: December 31, 2008

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|----------------------------------------------------------------------------------- | 
|o TRANSITION REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to __________

Commission file number 0-5703

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

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

(212) 644-2400
Registrants telephone number

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|
|

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

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

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

COMMON STOCK, PAR VALUE $.01 PER SHARE(Title of class)

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

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

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

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

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

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

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The aggregate market value of the Common Stock
held by non-affiliates of the registrant (based upon the last sale price of the
Common Stock reported on the Nasdaq Stock Market as of the last business day of
the registrants most recently completed second fiscal quarter (June 30, 2008)),
was $6,551,775.

The
number of shares of the Registrants outstanding Common Stock, as of March 17,
2009, was 23,214,132 shares.

Documents
Incorporated by Reference: Definitive Proxy Statement to be filed pursuant to Regulation
14A of the Exchange Act on or before April 30, 2009, incorporated by reference
into Part III.

Special Note Regarding Forward-Looking Statements

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

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PART I

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

General

Siebert
Financial Corp. (the Company) is a holding company that conducts its retail
discount brokerage and investment banking business through its wholly-owned
subsidiary, Muriel Siebert & Co., Inc., a Delaware corporation (Siebert).
Muriel F. Siebert, the first woman member of the New York Stock Exchange, is our
Chairwoman and President and owns approximately 90% of our outstanding common
stock, par value $.01 per share (the Common Stock).

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

Business Overview

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

The Retail Division

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

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

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

Sieberts
listed orders are routed by its clearing agent in a manner intended to afford
its customers the opportunity for price improvement on all orders. Sieberts
over the counter orders are executed by its clearing agent through a network of
Nasdaq market makers with no single market maker executing all trades. The firm
also offers customers execution services through ARCA, Reuters Instinet
systems and other electronic communication networks (ECNs) for an additional
fee. These systems give customers access to all ECNs before and after regular
market hours. Siebert believes that its over-the counter executions
consistently afford its customers the opportunity for price improvement.

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

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

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

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

Siebert
has established policies with respect to maximum purchase commitments for new
customers or customers with inadequate collateral to support a requested
purchase. Managers have some flexibility in the allowance of certain
transactions. When transactions occur outside normal guidelines, 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 networks. 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.

In November 2008, we
launched a new website with a new design, easier navigation, and added
functionality such as:

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

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

The Capital Markets Division

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

-5-

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Siebert, Brandford, Shank handles Sieberts tax exempt underwriting activities. Two individuals, Mr. Napoleon Brandford
and Ms. Suzanne F. Shank, own 51% of the equity and are entitled to 51% of the
net profits of SBS and Siebert is entitled to the balance. During 2008, SBS served as the lead manager
of over $5 billion of negotiated municipal new issues and served as a
co-manager in over $65 billion of negotiated municipal new issues. Clients include the States of
California, Texas, New York, Ohio and Michigan and the Cities of Chicago, Detroit,
Los Angeles, Houston, Dallas, Denver and New York.

We
entered into an Operating Agreement, effective as of April 19, 2005 (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. We consider operations from
SBSFPC to be integral to our operations.

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

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

Advertising, Marketing and Promotion

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

Competition

Siebert
encounters significant competition from full-commission, online and discount
brokerage firms, as well as from financial institutions, mutual fund sponsors
and other organizations, many of which are significantly larger and better
capitalized than Siebert. 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.

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Under
applicable regulations, Siebert is required to maintain regulatory net capital
of at least $250,000. At December 31, 2008, and 2007, Siebert had net capital of
$25.6 million and $29.5 million, respectively. Siebert claims exemption from
the reserve requirement under Section 15c3-3(k)(2)(ii).

Employees

As
of March 13, 2009, we had approximately 82 full-time employees, six of whom were
corporate officers. None of our employees is represented by a union, and we
believe that relations with our employees are good.

|         |              
|-------- | -------------
|Item 1A. | RISK
 FACTORS

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

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

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

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

There is intense competition in the
discount brokerage industry.

Siebert
encounters significant competition from full-commission, online and other
discount brokerage firms, as well as from financial institutions, mutual fund
sponsors and other organizations many of which are significantly larger and
better capitalized than Siebert. 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.

-8-

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

We are subject to extensive government
regulation.

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

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

-9-

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We are subject to net capital requirements.

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

Our customers may fail to pay us.

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

We face risks relating to our investment
banking activities.

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

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

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

We
presently receive and process up to 65% of our trade orders electronically.
This method of trading is heavily dependent on the integrity of the electronic
systems supporting it. While we have never experienced a significant failure of
our trading systems, heavy stress placed on our systems during peak trading
times could cause our systems to operate at unacceptably low speeds or fail
altogether. Any significant degradation or failure of our systems or the
systems of third parties involved in the trading process (e.g., online and
Internet service providers, record keeping and data processing functions
performed by third parties, and third party software), even for a short time,
could cause customers to suffer delays in trading. These delays could cause
substantial losses for customers and could subject us to claims from these
customers for losses. We cannot assure you that our network structure will
operate appropriately in the event of a subsystem, component or software
failure. In addition, we cannot assure you that we will be able to prevent an
extended systems failure in the event of a power or telecommunications failure,
an earthquake, terrorist attack, fire or any act of God. Any systems failure
that causes interruptions in our operations could have a material adverse
effect on our business, financial condition and operating results.

-10-

---



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

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

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

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

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

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

Our principal shareholder may control many
key decisions.

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

There may be no public market for our
common stock.

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

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

Not applicable.

-11-

---



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

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

|                                                              |  |                                          |  |                                     |  |               
|------------------------------------------------------------- |  | ---------------------------------------- |  | ----------------------------------- |  | --------------
|                                                              |  |                                          |  |                                     |  |               
|Location                                                      |  | Approximate
 Office Area in
 Square Feet |  | Expiration
 Date
 of
 Current Lease |  | Renewal
 Terms
|                                                              |  |                                          |  |                                     |  |               
|                                                             
|Corporate Headquarters, Retail and
 Investment Banking Office |  |                                          |  |                                     |  |               
|885 Third Ave.New York, NY 10022                              |  | 7,828                                    |  | 1/14/11                             |  | None          
|                                                              |  |                                          |  |                                     |  |               
|Retail Offices                                                |  |                                          |  |                                     |  |               
|                                                              |  |                                          |  |                                     |  |               
|9701 Wilshire Boulevard, Suite 1111Beverly
 Hills, CA 90212   |  | 1,200                                    |  | 10/31/10                            |  | None          
|                                                              |  |                                          |  |                                     |  |               
|4400 North Federal HighwayBoca Raton, FL
 33431               |  | 2,438                                    |  | 5/31/09                             |  | None          
|                                                              |  |                                          |  |                                     |  |               
|111 Pavonia Avenue(1)Jersey
 City, NJ 07310                   |  | 7,768                                    |  | 6/30/09                             |  | None          
|                                                              |  |                                          |  |                                     |  |               
|400 Fifth Avenue South, Suite 100Naples,
 FL 34102            |  | 1,008                                    |  | 4/30/11                             |  | None          
|                                                              |  |                                          |  |                                     |  |               
|1217 South Flager Drive, 3rd
 Floor West Palm Beach, FL 33401 |  | 3,000                                    |  | 9/30/12                             |  | None          
|                                                              |  |                                          |  |                                     |  |               
|9569 Harding AvenueSurfside, FL 33154                         |  | 1,150                                    |  | 8/30/10                             |  | None          

|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(1) | Certain of
 our administrative and back office functions are performed at this location.   
|    |                                                                                            
|    | We believe
 that our properties are in good condition and are suitable for our
 operations.

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

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

Siebert terminated a clearing agreement with Pershing LLC (Pershing) in 2003. Based on consultation with counsel, Siebert believes
that $1,500,000 that it advanced to Pershing in January 2003 should have been returned. Pershing expressed its belief that it was
entitled to retain the advance and receive a minimum of $3 million for its unreimbursed costs, a termination fee of $500,000 and $5
million for lost revenues. Siebert received a release for the $3 million related to disputed claims for unreimbursed fees and costs.
In 2004, Siebert decided not to commence proceedings against Pershing and charged off the $1,500,000 advance to Pershing. Siebert
believes the Pershing claims are without merit and that the ultimate outcome of this matter will not have a material adverse effect
on the Companys results of operations or financial position.

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

No
matter was submitted to a vote of shareholders during the fourth quarter of the
fiscal year ended December 31, 2008.

-12-

---



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 - 2007             |  | $    | 4.50 |     | $ | 3.26 | 
|                                  |  |      |      |     |   |      | 
|Second
 Quarter - 2007            |  | $    | 5.37 |     | $ | 3.37 | 
|                                  |  |      |      |     |   |      | 
|Third
 Quarter - 2007             |  | $    | 4.50 |     | $ | 3.06 | 
|                                  |  |      |      |     |   |      | 
|Fourth
 Quarter - 2007            |  | $    | 5.76 |     | $ | 3.13 | 
|                                  |  |      |      |     |   |      | 
|First
 Quarter  2008             |  | $    | 4.00 |     | $ | 2.96 | 
|                                  |  |      |      |     |   |      | 
|Second Quarter
  2008            |  | $    | 3.73 |     | $ | 2.90 | 
|                                  |  |      |      |     |   |      | 
|Third
 Quarter  2008             |  | $    | 3.42 |     | $ | 3.00 | 
|                                  |  |      |      |     |   |      | 
|Fourth
 Quarter  2008            |  | $    | 3.30 |     | $ | 1.00 | 
|                                  |  |      |      |     |   |      | 
|January 1,
 2009 - March 17, 2009 |  | $    | 2.00 |     | $ | 1.27 | 

On
March 17, 2009, the closing price of our common stock on the Nasdaq Global
Market was $1.39 per share. There were 130 holders of record of our common
stock and more than 1,500 beneficial owners of our common stock on March 13,
2009.

Dividend Policy

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

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

On
June 4, 2007, the Board of Directors declared a dividend of twelve cents per
share on our common stock, which was paid on June 29, 2007 to shareholders of
record at the close of business on June 20, 2007. The total amount paid on this
dividend declaration was $559,000. Ms. Muriel F. Siebert, the Chief Executive
Officer and majority shareholder waived the right to receive the dividend in
excess of the aggregate amount paid to other shareholders. Other shareholders
were paid dividends of $280,000.

On
August 9, 2006, the Board of Directors declared a dividend of eight cents per
share on our common stock, which was paid on August 30, 2006 to shareholders of
record at the close of business on August 21, 2006. The total amount paid on
this dividend declaration was $359,000. Ms. Muriel F. Siebert, the Chief Executive
Officer and majority shareholder waived the right to receive the dividend in
excess of the aggregate amount paid to other shareholders. Other shareholders
were paid dividends of $180,000.

-13-

---



Issuer Purchase Of Equity Securities

On
May 15, 2000, our Board of Directors authorized a buy back of up to one million
shares of our common stock. 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 2,119 shares at an average price of $1.99 in the fourth
quarter of 2008.

Issuer Purchases of Equity Securities

A summary of
our repurchase activity for the three months ended December 31, 2008 is as
follows:

|               |  |                                     |       |                                |  |                                                                         |      |                                                                        |  |  |        |  |  |         | 
|-------------- |  | ----------------------------------- | ----- | ------------------------------ |  | ----------------------------------------------------------------------- | ---- | ---------------------------------------------------------------------- |  |  | ------ |  |  | ------- | 
|Period         |  | Total
 Number
 Of Shares
 Purchased |       | Average Price
 Paid Per
 Share |  | Total Number of
 Shares Purchased
 as Part of Publicly
 Announced Plans |      | Maximum
 Number of
 Shares
 That May Yet Be
 Purchased Under
 The Plan | 
|               |  |                                     |       |                                |  |                                                                         |      |                                                                        | 
|October 2008   |  |                                     | 0     |                                |  |                                                                         |      |                                                                        |  |  | 9,731  |  |  | 290,269 | 
|               |  |                                     |       |                                |  |                                                                         |      |                                                                        |  |  |        |  |  |         | 
|November
 2008 |  |                                     | 156   |                                |  | $                                                                       | 2.03 |                                                                        |  |  | 9,887  |  |  | 290,113 | 
|               |  |                                     |       |                                |  |                                                                         |      |                                                                        |  |  |        |  |  |         | 
|December
 2008 |  |                                     | 1,963 |                                |  | $                                                                       | 1.99 |                                                                        |  |  | 11,850 |  |  | 288,150 | 
|               |  |                                     |       |                                |  |                                                                         |      |                                                                        |  |  |        |  |  |         | 
|               |  |                                     |       |                                |  |                                                                         |      |                                                                        |  |  |        |  |  |         | 
|Total          |  |                                     | 2,119 |                                |  | $                                                                       | 1.99 |                                                                        |  |  | 11,850 |  |  | 288,150 | 

Equity Compensation Plan Information

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

|                                                               |  |                                                                                                 |  |                                                                                    |  |                                                                                                                                            |      |  |  |           |  | 
|-------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ | ---- |  |  | --------- |  | 
|Plan
 Category                                                 |  | Number
 of Securities to be
 issued upon exercise of
 outstanding options,
 warrants and rights |  | Weighted-
 average
 exercise price of
 outstanding
 options,
 warrants and
 rights |  | Number
 of Securities
 remaining available for
 issuance under equity
 compensation plans
 (excluding securities
 reflected in column (a)) |     
|                                                               |  |                                                                                                 |  |                                                                                    |  |                                                                                                                                            |      |  | 
|                                                               |  | (a)                                                                                             |  | (b)                                                                                |  | (c)                                                                                                                                        |     
|Equity compensation plans approved by
 security holders(1)     |  | 1,767,200                                                                                       |  |                                                                                    |  | $                                                                                                                                          | 4.07 |  |  | 1,700,000 |  | 
|                                                               |  |                                                                                                 |  |                                                                                    |  |                                                                                                                                            |      |  |  |           |  | 
|Equity compensation plans not approved by
 security holders(2) |  | 41,400                                                                                          |  |                                                                                    |  |                                                                                                                                            |     |  |  | 18,600    |  | 
|                                                               |  |                                                                                                 |  |                                                                                    |  |                                                                                                                                            |      |  |  |           |  | 
|Total                                                          |  | 1,808,600                                                                                       |  |                                                                                    |  | $                                                                                                                                          | 4.07 |  |  | 1,718,600 |  | 

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

Material Terms of the 1998 Restricted Stock
Award Plan

Our 1998
Restricted Stock Award Plan provides for awards to key employees of not more
than an aggregate of 60,000 shares of our common stock, subject to adjustments
for stock splits, stock dividends and other changes in our capitalization, to
be issued either immediately after the award or at a future date. As of
December 31, 2008, 41,400 shares of our common stock under the Restricted Stock
Award Plan had been awarded and were outstanding. As provided in the plan and
subject to restrictions, shares awarded may not be disposed of by the
recipients for a period of one year from the date of the award. Cash dividends
on shares awarded are held by us for the benefit of the recipients, subject to
the same restrictions as the award. These dividends, without interest, are paid
to the recipients upon lapse of the restrictions.

-14-

---



|                 |                                                                                                                                                                                                                                                                                                                         
|---------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Our Performance: | The graph below
 compares our performance from December 31, 2003 through December 31, 2008,
 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 12/31/03 in stock & index-including reinvestment of dividends.

Fiscal year ending December 31.

-15-

---



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

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

|                                                      |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|----------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- |  | ---- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                      |  | 2008 |            | 2007 |   | 2006       |  | 2005 |            | 2004 |  
|                                                      |  |      |            |      |   |            |  |      |            |      |  
|Income statement data:                                |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Total Revenues                                        |  | $    | 29,750     |      | $ | 33,914     |  | $    | 28,818     |      | $ | 29,323     |  | $ | 26,392     | 
|Net (loss) income                                     |  | $    | (1,760     | )    | $ | 2,258      |  | $    | 3,425      |      | $ | 1,863      |  | $ | 533        | 
|                                                      |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Net (loss) income per share of common stock           |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Basic                                                 |  | $    | (0.08      | )    | $ | 0.10       |  | $    | 0.15       |      | $ | 0.08       |  | $ | 0.02       | 
|Diluted                                               |  | $    | (0.08      | )    | $ | 0.10       |  | $    | 0.15       |      | $ | 0.08       |  | $ | 0.02       | 
|                                                      |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Weighted average shares outstanding
(basic)           |  |      | 22,208,372 |      |   | 22,206,346 |  |      | 22,129,566 |      |   | 22,093,369 |  |   | 22,113,228 | 
|Weighted average shares outstanding
 (diluted)        |  |      | 22,208,372 |      |   | 22,273,550 |  |      | 22,252,851 |      |   | 22,127,940 |  |   | 22,276,562 | 
|                                                      |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|Statement of financial condition data (at
 year-end): |  |      |            |      |   |            |  |      |            |      |   |            |  |   |            | 
|                                                     
|Total assets                                          |  | $    | 45,579     |      | $ | 47,924     |  | $    | 46,869     |      | $ | 43,027     |  | $ | 41,560     | 
|Total liabilities excluding subordinated
 borrowings  |  | $    | 4,995      |      | $ | 5,704      |  | $    | 6,460      |      | $ | 5,975      |  | $ | 6,460      | 
|Stockholders equity                                  |  | $    | 40,584     |      | $ | 42,220     |  | $    | 40,409     |      | $ | 37,052     |  | $ | 35,100     | 
|Cash dividends declared per common share (1)          |  | $    | 466        |      | $ | 559        |  | $    | 359        |      | $ | 0          |  | $ | 0          | 

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

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

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

The
financial crisis affecting the global economy has created historic volatility
in the market place. Our working capital is invested in short term United States
Treasury Bills, and to date the financial crisis has not had a material effect
on our liquidity or financial position.

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. To date our revenues have not been  adversely affected as a result of the financial crisis.

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

We
entered into an Operating Agreement, effective as of April 19, 2005 (the
Operating Agreement), with Suzanne Shank and Napoleon Brandford III, the two
individual principals (the Principals) of SBS Financial Products
Company LLC, a Delaware limited liability company (SBSFPC). Pursuant to the
terms of the Operating Agreement, the Company and each of the Principals made
an initial capital contribution of $400,000 in exchange for a 33.33% initial
interest in SBSFPC. SBSFPC engages in derivatives transactions related to the
municipal underwriting business. The Operating Agreement provides that profit
and loss will be shared 66.66% by the Principals and 33.33% by us. Operations from
SBSFPC is considered to be integral to our operation.

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

-16-

---



On
January 23, 2008, our Board of Directors authorized a buy back of up to 300,000
shares of our common stock. Under this program, shares are purchased from time
to time, at our discretion, in the open market and in private transactions.
During 2008 we repurchased 10,231shares of common stock for an average price of $3.03.

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, 2008 Compared To Year Ended December 31, 2007

Revenues. Total revenues for
2008 were $29.8 million, a decrease of $4.2 million, or 12.3%, from 2007. Commission and
fee income decreased $1.9 million, or 7.3%, from the prior year to $24.2
million due to a decrease in revenues from institutional trading and retail customer trading.
Retail customer volumes increased; however, the average commission charged per
trade decreased due to more retail customers executing trades online via the
Internet, which has a lower commission charge per ticket.

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

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

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

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

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

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

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

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

-17-

---



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

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

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

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

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

Year Ended December
31, 2007 Compared To Year Ended December 31, 2006

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

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

-18-

---



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

Siebert
commenced a lawsuit against Intuit, Inc. (Intuit) in 2003 seeking expenses
and damages arising from the Joint Brokerage Service conducted under the
Strategic Alliance Agreement between Siebert and Intuit. Intuit counterclaimed
against Siebert for expenses and damages. A Stipulation and Order of Dismissal
with Prejudice entered into by the parties was filed in October 2007,
terminating the litigation without any payments by either party. The parties
also exchanged general releases. As a result of the settlement, $2,024,000 of
liabilities recorded by Siebert for expenses prior to December 31, 2003, were
reversed in the fourth quarter of 2007.

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

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

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

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

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

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

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

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

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

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

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

Liquidity and
Capital Resources

Our
assets are highly liquid, consisting generally of cash, money market funds,
U.S. Treasury Bills and securities freely saleable in the open market. Our
total assets at December 31, 2008 were $46 million, of which we regarded $31.3 million, or
69%, as highly liquid.

Siebert
is subject to the net capital requirements of the SEC, the NYSE and other
regulatory authorities. At December 31, 2008, Sieberts regulatory net capital
was $25.6 million, which was $25.3 million in excess of its minimum capital requirement
of $250,000.

-19-

---



Siebert
has entered into a Secured Demand Note Collateral Agreement with SBS under
which it is obligated to loan to SBS up to $1.2 million on a subordinated basis. Amounts obligated to be loaned by
Siebert under the facility are reflected on our balance sheet as cash
equivalents - restricted. SBS pays Siebert interest on this amount at the rate
of 8% per annum. The facility expires on August 31, 2010 at which time SBS is
obligated to repay to Siebert any amounts borrowed by SBS thereunder.

Below
is a table that presents our obligations and commitments at December 31, 2008:

|                            |  |                       |           |                   |   |           |  |           |         |                       |   |   |  |   |   | 
|--------------------------- |  | --------------------- | --------- | ----------------- | - | --------- |  | --------- | ------- | --------------------- | - | - |  | - | - | 
|                            |  | Payment Due By Period |          
|Contractual
 Obligations    |  | Total                 |           | Less Than
 1 Year |   | 1-3 Years |  | 3-5 Years |         | More Than
 Five Years |  
|Operating lease obligations |  | $                     | 1,851,000 |                   | $ | 902,000   |  | $         | 949,000 |                       | $ | 0 |  | $ | 0 | 

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

Financial Instruments Held For Trading
Purposes:

Through
Siebert, we maintain inventories in exchange-listed and Nasdaq equity
securities and municipal securities on both a long and short basis. We did not
have any short positions at December 31, 2008. 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 $64,000 from SBS in
each of the years that Sieberts commitment has been outstanding.

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.

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

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

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

|            |                                                                                      
|----------- | -------------------------------------------------------------------------------------
|Item 9.     | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
 FINANCIAL DISCLOSURE
|None.       |                                                                                      
|            |                                                                                      
|Item 9A(T). | CONTROLS AND PROCEDURES                                                              

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

-20-

---



Managements Report on Internal Control over
Financial Reporting

Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as that term is defined in Exchange Act
Rule 13a-15(f)). To evaluate the effectiveness of our internal
control over financial reporting, we use the framework in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the COSO Framework). Using the
COSO Framework, our management, including our Chief Executive Officer and Chief
Financial Officer, evaluated our internal control over financial reporting and
concluded that our internal control over financial reporting was effective as
of December 31, 2008.

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

Changes in Internal Controls over Financial
Reporting

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

Limitation of the Effectiveness of Internal
Controls

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

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

None

-21-

---



PART III

|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|         |                                                       
|(a)      | Identification
 of Directors                          

This
information is incorporated by reference from our definitive proxy statement to
be filed by the Company pursuant to Regulation 14A on or prior to April 30,
2009.

|    |                                      
|--- | -------------------------------------
|(b) | Identification
 of Executive Officers

|                      |  |     |  |                                                               
|--------------------- |  | --- |  | --------------------------------------------------------------
|Name                  |  | Age |  | Position                                                      
|                      |  |     |  |                                                               
|                      |  |     |  |                                                               
|Muriel F.
 Siebert    |  | 76  |  | Chairwoman
 and President                                     
|                      |  |     |  |                                                               
|Ameen Esmail          |  | 50  |  | Executive
 Vice President and Director of Business Development
|                      |  |     |  |                                                               
|Joseph M.
 Ramos, Jr. |  | 50  |  | Executive
 Vice President and Chief Financial Officer         
|                      |  |     |  |                                                               
|Jeanne
 Rosendale     |  | 44  |  | Executive
 Vice President and General Counsel                 
|                      |  |     |  |                                                               
|Daniel Iesu           |  | 49  |  | Secretary                                                     

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

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

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

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

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

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

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

This
information is incorporated by reference from our definitive proxy statement to
be filed pursuant to Regulation 14A on or prior to April 30, 2009.

(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

-22-

---



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, 2009.

|         |                       
|-------- | ----------------------
|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, 2009.

|         |                                                                                                
|-------- | -----------------------------------------------------------------------------------------------
|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, 2009.

|         |                                                                           
|-------- | --------------------------------------------------------------------------
|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, 2009.

|         |                                       
|-------- | --------------------------------------
|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, 2009.

-23-

---



PART IV

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

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

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

The
consolidated Financial statements for the year ended December 31, 2008 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.

-24-

---



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                                    |  |     
|----------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                    |  | Page
|                                                                                                                                    |  |     
|SIEBERT FINANCIAL CORP.                                                                                                             |  |     
|                                                                                                                                    |  |     
|Report of Independent Registered Public
 Accounting Firm                                                                            |  | F-1 
|                                                                                                                                    |  |     
|Consolidated Statements of Financial
 Condition at December 31, 2008 and 2007                                                       |  | F-2 
|                                                                                                                                    |  |     
|Consolidated Statements of Operations for each
 of the years in the three-year period ended December 31, 2008                       |  | F-3 
|                                                                                                                                    |  |     
|Consolidated Statements of Changes in
 Stockholders Equity for each of the years in the three-year period ended
 December 31, 2008 |  | F-4 
|                                                                                                                                    |  |     
|Consolidated Statements of Cash Flows for
 each of the years in the three-year period ended December 31, 2008                       |  | F-5 
|                                                                                                                                    |  |     
|Notes to Consolidated Financial
Statements                                                                                          |  | F-6 
|                                                                                                                                    |  |     
|SIEBERT, BRANDFORD, SHANK & CO., LLC                                                                                                |  |     
|                                                                                                                                    |  |     
|Report of Independent Registered Public
 Accounting Firm                                                                            |  | F-18
|                                                                                                                                    |  |     
|Statements of Financial Condition at December
 31, 2008 and 2007                                                                    |  | F-19
|                                                                                                                                    |  |     
|Statements of Operations for each of the
 years in the three-year period ended December 31, 2008                                    |  | F-20
|                                                                                                                                    |  |     
|Statements of Changes in Members Capital
 for each of the years in the three-year period ended December 31, 2008                   |  | F-21
|                                                                                                                                    |  |     
|Statements of Cash Flows for each of the
 years in the three-year period ended December 31, 2008                                    |  | F-23
|                                                                                                                                    |  |     
|Notes to Financial Statements                                                                                                       |  | F-24

---



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

Board of
Directors and Stockholders
Siebert Financial Corp.

We have
audited the accompanying consolidated statements of financial condition of
Siebert Financial Corp. and subsidiaries (the Company) as of December 31,
2008 and 2007, 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, 2008. These financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our
opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Siebert Financial
Corp. and subsidiaries as of December 31, 2008 and 2007, and the consolidated
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2008 in conformity with accounting principles
generally accepted in the United States of Amercia.

/s/ Eisner LLP

New York, New York
March 31, 2009

F-1

---



SIEBERT FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION

|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | -
|                                                                                                                                                                                                                                |  | December 31, |           
|                                                                                                                                                                                                                                |  |              |           
|                                                                                                                                                                                                                                |  | 2008         |            | 2007 |  
|                                                                                                                                                                                                                                |  |              |            |      |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|ASSETS                                                                                                                                                                                                                          |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|Cash and cash
equivalents                                                                                                                                                                                                       |  | $            | 29,617,000 |      | $ | 34,589,000 |  
|Cash equivalents -
restricted                                                                                                                                                                                                   |  |              | 1,300,000  |      |   | 1,300,000  |  
|Receivable from clearing
broker                                                                                                                                                                                                 |  |              | 1,682,000  |      |   | 1,683,000  |  
|Securities owned, at fair
value                                                                                                                                                                                                 |  |              | 758,000    |      |   | 739,000    |  
|Furniture, equipment and
leasehold
 improvements, net                                                                                                                                                                           |  |              | 1,481,000  |      |   | 1,037,000  |  
|Investments in and advances to
affiliates                                                                                                                                                                                       |  |              | 6,480,000  |      |   | 5,902,000  |  
|Income tax refund receivable                                                                                                                                                                                                    |  |              | 1,312,000  |      |   |            |  
|Prepaid expenses and other
assets                                                                                                                                                                                               |  |              | 1,026,000  |      |   | 936,000    |  
|Intangibles, net                                                                                                                                                                                                                |  |              | 775,000    |      |   | 871,000    |  
|Deferred taxes                                                                                                                                                                                                                  |  |              | 1,148,000  |      |   | 867,000    |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  | $            | 45,579,000 |      | $ | 47,924,000 |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|LIABILITIES AND STOCKHOLDERS
EQUITY                                                                                                                                                                                            |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|Liabilities:                                                                                                                                                                                                                    |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|Accounts payable and accrued
liabilities                                                                                                                                                                                        |  | $            | 4,995,000  |      | $ | 5,704,000  |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|Commitments and contingent
liabilities -
 Note J                                                                                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|Stockholders
equity:                                                                                                                                                                                                           |  |              |            |      |   |            |  
|Common stock, $.01 par value;
49,000,000
 shares authorized, 23,211,846 shares issued and 22,202,115 shares outstanding
 at December 31, 2008 and 23,211,846,shares issued and 22,212,346 shares
 outstanding December 31, 2007 |  |              | 232,000    |      |   | 232,000    |  
|Additional paid-in
capital                                                                                                                                                                                                      |  |              | 19,454,000 |      |   | 18,832,000 |  
|Retained earnings                                                                                                                                                                                                               |  |              | 25,432,000 |      |   | 27,660,000 |  
|Less: 1,009,731 and 999,500
shares of
 treasury stock at cost at December 31, 2008 and 2007                                                                                                                                     |  |              | (4,534,000 | )    |   | (4,504,000 | )
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              | 40,584,000 |      |   | 42,220,000 |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  
|                                                                                                                                                                                                                                |  | $            | 45,579,000 |      | $ | 47,924,000 |  
|                                                                                                                                                                                                                                |  |              |            |      |   |            |  

See notes to consolidated financial
statements.

F-2

---



CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                       |  |                         |            |      |   |            |  |   |            | 
|------------------------------------------------------ |  | ----------------------- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                       |  | Year Ended December 31, |           
|                                                       |  |                         |           
|                                                       |  | 2008                    |            | 2007 |   | 2006       | 
|                                                       |  |                         |            |      |   |            | 
|Revenue:                                               |  |                         |            |      |   |            |  |   |            | 
|Commissions and fees                                   |  | $                       | 24,224,000 |      | $ | 26,119,000 |  | $ | 24,713,000 | 
|Investment banking                                     |  |                         | 3,481,000  |      |   | 3,369,000  |  |   | 1,704,000  | 
|Trading profits                                        |  |                         | 1,232,000  |      |   | 624,000    |  |   | 754,000    | 
|Settlement of lawsuit                                  |  |                         |            |      |   | 2,024,000  |  |   |            | 
|Interest and dividends                                 |  |                         | 813,000    |      |   | 1,778,000  |  |   | 1,647,000  | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|                                                       |  |                         | 29,750,000 |      |   | 33,914,000 |  |   | 28,818,000 | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|Expenses:                                              |  |                         |            |      |   |            |  |   |            | 
|Employee compensation and
benefits                     |  |                         | 12,318,000 |      |   | 11,957,000 |  |   | 10,977,000 | 
|Clearing fees, including floor
brokerage               |  |                         | 6,464,000  |      |   | 5,693,000  |  |   | 5,203,000  | 
|Professional fees                                      |  |                         | 8,070,000  |      |   | 6,667,000  |  |   | 3,798,000  | 
|Advertising and
promotion                              |  |                         | 809,000    |      |   | 725,000    |  |   | 920,000    | 
|Communications                                         |  |                         | 2,567,000  |      |   | 2,017,000  |  |   | 1,711,000  | 
|Occupancy                                              |  |                         | 1,319,000  |      |   | 1,314,000  |  |   | 1,146,000  | 
|Other general and
administrative                       |  |                         | 2,693,000  |      |   | 2,942,000  |  |   | 2,955,000  | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|                                                       |  |                         | 34,240,000 |      |   | 31,315,000 |  |   | 26,710,000 | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|Income from equity investees                           |  |                         | 1,699,000  |      |   | 1,432,000  |  |   | 3,801,000  | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|(Loss) income before income taxes                      |  |                         | (2,791,000 | )    |   | 4,031,000  |  |   | 5,909,000  | 
|Income taxes (benefit) provision                       |  |                         | (1,031,000 | )    |   | 1,773,000  |  |   | 2,484,000  | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|Net (loss) income                                      |  | $                       | (1,760,000 | )    | $ | 2,258,000  |  | $ | 3,425,000  | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|Net (loss) income per share of common stock -
 basic   |  | $                       | (0.08      | )    | $ | 0.10       |  | $ | 0.15       | 
|Net (loss) income per share of common stock -
 diluted |  | $                       | (0.08      | )    | $ | 0.10       |  | $ | 0.15       | 
|                                                       |  |                         |            |      |   |            |  |   |            | 
|Weighted average shares outstanding -
basic            |  |                         | 22,208,372 |      |   | 22,206,346 |  |   | 22,129,566 | 
|Weighted average shares outstanding -
 diluted         |  |                         | 22,208,372 |      |   | 22,273,550 |  |   | 22,252,851 | 

See notes to consolidated financial
statements.

F-3

---



CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS EQUITY

|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|------------------------------------------------------------------------- |  | ------------------ | ---------- | -------------- | - | ----------------------------- |  | ------------------ | ---------- | ------------------ | - | ---------- | - | ----- | --------- |  | - | ---------- | - | - | ---------- | -
|                                                                          |  | Common Stock       |            | Treasury Stock |  
|                                                                          |  |                    |            |                |  
|                                                                          |  | Number
 Of
 Shares |            | $.01 ParValue  |   | Additional
 Paid -In
 Capital |  | Retained
 Earnings |            | Number
 Of
 Shares |   | Amount     |   | Total |          
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |          
|Balance - January 1, 2006                                                 |  |                    | 23,039,402 |                | $ | 230,000                       |  | $                  | 18,063,000 |                    | $ | 22,896,000 |   |       | 916,434   |  | $ | (4,137,000 | ) | $ | 37,052,000 |  
|Net income                                                                |  |                    |            |                |   |                               |  |                    |            |                    |   | 3,425,000  |   |       |           |  |   |            |   |   | 3,425,000  |  
|Treasury share purchases                                                  |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       | 83,066    |  |   | (367,000   | ) |   | (367,000   | )
|Issuance of shares in connection with exercise of
employee stock
 options |  |                    | 162,644    |                |   | 2,000                         |  |                    | 447,000    |                    |   |            |   |       |           |  |   |            |   |   | 449,000    |  
|Dividend on common stock ($.08 per
share)                                 |  |                    |            |                |   |                               |  |                    |            |                    |   | (359,000   | ) |       |           |  |   |            |   |   | (359,000   | )
|Tax benefit arising from exercise of employee
stock options               |  |                    |            |                |   |                               |  |                    | 51,000     |                    |   |            |   |       |           |  |   |            |   |   | 51,000     |  
|Stock based compensation                                                  |  |                    |            |                |   |                               |  |                    | 158,000    |                    |   |            |   |       |           |  |   |            |   |   | 158,000    |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|Balance - December 31, 2006                                               |  |                    | 23,202,046 |                |   | 232,000                       |  |                    | 18,719,000 |                    |   | 25,962,000 |   |       | 999,500   |  |   | (4,504,000 | ) |   | 40,409,000 |  
|Net income                                                                |  |                    |            |                |   |                               |  |                    |            |                    |   | 2,258,000  |   |       |           |  |   |            |   |   | 2,258,000  |  
|Issuance of shares in connection with exercise of
employee stock
 options |  |                    | 9,800      |                |   |                               |  |                    | 27,000     |                    |   |            |   |       |           |  |   |            |   |   | 27,000     |  
|Dividend on common stock ($.12 per
share)                                 |  |                    |            |                |   |                               |  |                    |            |                    |   | (560,000   | ) |       |           |  |   |            |   |   | (560,000   | )
|Tax benefit arising from exercise of employee
stock options               |  |                    |            |                |   |                               |  |                    | 2,000      |                    |   |            |   |       |           |  |   |            |   |   | 2,000      |  
|Stock based compensation                                                  |  |                    |            |                |   |                               |  |                    | 84,000     |                    |   |            |   |       |           |  |   |            |   |   | 84,000     |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|Balance - December 31, 2007                                               |  |                    | 23,211,846 |                |   | 232,000                       |  |                    | 18,832,000 |                    |   | 27,660,000 |   |       | 999,500   |  |   | (4,504,000 | ) |   | 42,220,000 |  
|Net loss                                                                  |  |                    |            |                |   |                               |  |                    |            |                    |   | (1,760,000 | ) |       |           |  |   |            |   |   | (1,760,000 | )
|Treasury share purchases                                                  |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       | 10,231    |  |   | (30,000    | ) |   | (30,000    | )
|Dividend on common stock ($.10 per
share)                                 |  |                    |            |                |   |                               |  |                    |            |                    |   | (468,000   | ) |       |           |  |   |            |   |   | (468,000   | )
|Stock based compensation                                                  |  |                    |            |                |   |                               |  |                    | 622,000    |                    |   |            |   |       |           |  |   |            |   |   | 622,000    |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|Balance - December 31, 2008                                               |  |                    | 23,211,846 |                | $ | 232,000                       |  | $                  | 19,454,000 |                    | $ | 25,432,000 |   |       | 1,009,731 |  | $ | (4,534,000 | ) | $ | 40,584,000 |  
|                                                                          |  |                    |            |                |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  

See notes to consolidated financial
statements.

F-4

---



CONSOLIDATED
STATEMENTS OF
CASH FLOWS

|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|--------------------------------------------------------------------------------------------------- |  | ----------------------- | ---------- | ---- | - | ---------- | - | - | ---------- | -
|                                                                                                    |  | Year Ended December 31, |           
|                                                                                                    |  |                         |           
|                                                                                                    |  | 2008                    |            | 2007 |   | 2006       |  
|                                                                                                    |  |                         |            |      |   |            |  
|Cash Flows From Operating
Activities:                                                               |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Net (loss) income                                                                                   |  | $                       | (1,760,000 | )    | $ | 2,258,000  |   | $ | 3,425,000  |  
|Adjustments to reconcile net (loss) income to net
 cash (used in) provided by operating activities: |  |                         |            |      |   |            |   |   |            |  
|Depreciation and amortization                                                                       |  |                         | 479,000    |      |   | 690,000    |   |   | 780,000    |  
|Income from equity investees                                                                        |  |                         | (1,699,000 | )    |   | (1,432,000 | ) |   | (3,801,000 | )
|Distribution from equity investees                                                                  |  |                         | 1,099,000  |      |   | 2,428,000  |   |   | 1,427,000  |  
|Deferred taxes                                                                                      |  |                         | (281,000   | )    |   | (40,000    | ) |   | (226,000   | )
|Stock based compensation                                                                            |  |                         | 622,000    |      |   | 84,000     |   |   | 158,000    |  
|Changes in:                                                                                         |  |                         |            |      |   |            |   |   |            |  
|Securities owned, at market value                                                                   |  |                         | (19,000    | )    |   | (739,000   | ) |   |            |  
|Receivable from clearing broker                                                                     |  |                         | 1,000      |      |   | 785,000    |   |   | (64,000    | )
|Income tax refund receivable                                                                        |  |                         | (1,312,000 | )    |   |            |   |   |            |  
|Prepaid expenses and other assets                                                                   |  |                         | (90,000    | )    |   | 275,000    |   |   | (219,000   | )
|Accounts payable and accrued
liabilities                                                            |  |                         | (709,000   | )    |   | (756,000   | ) |   | 485,000    |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Net cash (used in) provided by operating
 activities                                                |  |                         | (3,669,000 | )    |   | 3,553,000  |   |   | 1,965,000  |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Cash Flows From Investing
Activities:                                                               |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Purchase of furniture, equipment and
 leasehold improvements                                        |  |                         | (827,000   | )    |   | (906,000   | ) |   | (150,000   | )
|Collection (Payment) of advances made to
 equity investees                                          |  |                         | 22,000     |      |   | (133,000   | ) |   | 37,000     |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Net cash used in investing
activities                                                               |  |                         | (805,000   | )    |   | (1,039000  | ) |   | (113,000   | )
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Cash Flows From Financing
Activities:                                                               |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Dividend on common stock                                                                            |  |                         | (468,000   | )    |   | (560,000   | ) |   | (359,000   | )
|Purchase of treasury shares                                                                         |  |                         | (30,000    | )    |   |            |   |   | (367,000   | )
|Proceeds from exercise of options                                                                   |  |                         |            |      |   | 27,000     |   |   | 449,000    |  
|Tax benefit of exercised employee stock
 options                                                    |  |                         |            |      |   | 2,000      |   |   | 51,000     |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Net cash used in financing
activities                                                               |  |                         | (498,000   | )    |   | (531,000   | ) |   | (226,000   | )
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Net (decrease) increase in cash and cash
 equivalents                                               |  |                         | (4,972,000 | )    |   | 1,983,000  |   |   | 1,626,000  |  
|Cash and cash equivalents - beginning of
 year                                                      |  |                         | 34,589,000 |      |   | 32,606,000 |   |   | 30,980,000 |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Cash and cash equivalents - end of
year                                                             |  | $                       | 29,617,000 |      | $ | 34,589,000 |   | $ | 32,606,000 |  
|                                                                                                    |  |                         |            |      |   |            |   |   |            |  
|Supplemental Cash Flow
Disclosures:                                                                 |  |                         |            |      |   |            |   |   |            |  
|Cash paid for:                                                                                      |  |                         |            |      |   |            |   |   |            |  
|Income taxes                                                                                        |  | $                       | 575,000    |      | $ | 2,087,000  |   | $ | 2,444,000  |  

See notes to consolidated financial
statements.

F-5

---



SIEBERT FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

NOTE
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] | Business:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Siebert
 Financial Corp. (Financial), through its wholly owned subsidiary, Muriel
 Siebert & Co., Inc. (Siebert), engages in the business of providing
 discount brokerage services for customers, investment banking services for
 institutional clients and trading securities for its own account, and,
 through its wholly owned subsidiary, Siebert Womens Financial Network, Inc.
 (WFN), engages in providing products, services and information all uniquely
 devoted to womens financial needs. All significant intercompany accounts and
 transactions have been eliminated. Financial, Siebert and WFN collectively
 are referred to herein as the Company.                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The
 municipal bond investment banking business and related derivatives transactions
 is being conducted by Siebert Brandford Shank & Co., LLC (SBS), and SBS
 Financial Products Company, LLC (SBSFP), investees, which are accounted for
 by the equity method of accounting (see Note C). The equity method provides
 that Siebert record its share of the investees earnings or losses in its
 results of operations. Operations of equity investees are considered integral
 to Sieberts operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|[2] | Securities Transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Securities
 transactions trading profits, commission revenues and related clearing
 expenses are recorded on a trade date basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Marketable
 securities are valued at fair value. Interest is recorded on an accrual
 basis. Dividends are recorded on the ex-dividend date. Siebert clears all its
 security transactions through two unaffiliated clearing firms on a fully
 disclosed basis. Accordingly, Siebert does not hold funds or securities for,
 or owe funds or securities to, its customers. Those functions are performed by
 the clearing firms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company
 adopted SFAS No. 157, Fair Value Measurements, effective January 1, 2008.
 SFAS No. 157 defines fair value, establishes a framework for measuring
 fair value and requires enhanced disclosures about fair value measurements.
 As defined in SFAS No. 157, 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. In determining fair value, the
 Company often utilizes certain assumptions that market participants would use
 in pricing the asset or liability, including assumptions about risk and or
 the risks inherent in the inputs to the valuation technique. These inputs can
 be readily observable, market corroborated, or generally unobservable firm
 inputs. The fair value hierarchy ranks the quality and reliability of the
 information used to determine fair values. Financial assets and liabilities
 carried at fair value will be classified and disclosed in one of the
 following three categories:
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Level 1 
 valued based on quoted prices at the measurement date for identical assets or
 liabilities trading in active markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Level 2 
 quoted prices in active markets for similar assets and liabilities and inputs
 that are observable for the asset or liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Level 3 
 valuations derived from valuation techniques in which one or more significant
 inputs is not readily observable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

As of December 31, 2008, securities owned are classified as follows:

|                                        |  |         |         |         |   |         |  |   |        
|--------------------------------------- |  | ------- | ------- | ------- | - | ------- |  | - | -------
|Securities
 owned                       |  | Level 1 |         | Level 2 |   | Total  
|                                        |  |         |         |         |   |        
|New York State
 Dormitory Revenue Bonds |  |         |        |         | $ | 504,000 |  | $ | 504,000
|Common stock                            |  | $       | 254,000 |         |   |        |  | $ | 254,000
|                                        |  |         |         |         |   |        
|                                        |  | $       | 254,000 |         | $ | 504,000 |  | $ | 758,000

| |                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Common
 stocks held long classified within Level 1 of the fair value hierarchy are
 valued on the last business day of the year at the last available reported
 sales price on the primary securities exchange.

F-6

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Municipal
 Bonds held long classified within Level 2 of the fair value hierarchy are
 valued based on prices obtained from pricing sources, which derive values
 from observable inputs.                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[3] | Income Taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company
 accounts for income taxes utilizing the asset and liability approach
 requiring the recognition of deferred tax assets and liabilities for the
 expected future tax consequences of temporary differences between the basis
 of assets and liabilities for financial reporting purposes and tax purposes.
 Financial files a consolidated federal income tax return, which includes
 Siebert and WFN.                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[4] | Furniture, Equipment and Leasehold Improvements:                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Property and
 equipment is stated at cost less accumulated depreciation. Depreciation is
 calculated using the straight-line method over the estimated useful lives of
 the assets, generally five years. Leasehold improvements are amortized over
 the shorter of the estimated useful life or period of the lease.                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[5] | Cash Equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Cash
 equivalents consist of highly liquid investments purchased with original
 maturity of three months or less including money market funds and commercial
 paper.                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[6] | Advertising Costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Advertising
 costs are charged to expense as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[7] | Use Of Estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The
 preparation of financial statements in conformity with accounting principles
 generally accepted in the United States of America requires management to make
 estimates and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent assets and liabilities at the date
 of the financial statements and the reported amounts of revenues and expenses
 during the reporting period. Actual results could differ from those
 estimates.

F-7

---



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

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[8]  | Per Share Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | Basic
 earnings (loss) per share is calculated by dividing net income (loss) by the weighted average
 outstanding shares during the period. Diluted earnings per share is
 calculated by dividing net income by the number of shares outstanding under
 the basic calculation and adding all dilutive securities, which consist of
 options. The treasury stock method is used to reflect the dilutive effect of
 outstanding options, which, for 2007 and 2006 amounted to 67,204 and 123,285
 additional shares, respectively, added to the basic weighted average
 outstanding shares of 22,206,346 and 22,129,566 in those respective years.
 The Company recognized a net loss for the year ended December 31, 2008.
 Accordingly, basic and diluted loss per common share are the same as the
 effect of stock options is anti-dilutive to loss per share. In
 2008, 2007 and 2006, 1,767,200, 1,162,500 and 1,288,466 common shares,
 respectively, issuable upon the exercise of options were not included in the
 computation of diluted income (loss) per share as the effect would have been
 anti-dilutive.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|[9]  | Investment Banking:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | Investment
 banking revenue includes gains and fees, net of syndicate expenses, arising
 from underwriting syndicates in which the Company participates. Investment
 banking management fees are recorded on the offering date, sales concessions
 on the settlement date and underwriting fees at the time the underwriting is
 completed and the income is reasonably determinable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|[10] | Cash Equivalents - Restricted:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | Cash
 equivalents - restricted represents $1,300,000 of cash invested in a money
 market account which Siebert is obligated to lend to SBS on a subordinated
 basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | Any
 outstanding amounts loaned bear interest at 4% per annum and are repayable on
 August 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|[11] | Stock-Based Compensation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | In December
 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123R
 Share-Based Payment (SFAS 123R), which requires all share-based payments
 to employees, including grants of employee stock options, to be recognized in
 the statement of operations as an operating expense, based on their fair
 values on grant date. The
 Company adopted the provision of SFAS No. 123R effective January 1, 2006,
 using the modified prospective transition method. Under the modified
 prospective method, non-cash compensation expense is recognized for the
 portion of outstanding stock option awards granted prior to the adoption of
 SFAS 123R for which service has not been rendered, and for any future stock
 option grants. The Company recognizes share-based compensation costs on a straight-line
 basis over the requisite service periods of awards which would normally be the vesting period of the options.                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | As required by SFAS No. 123R, cash flows resulting from the tax benefits of the
 tax deduction in excess of the compensation cost recognized for these options
 are classified as financing cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|[12] | Intangibles:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | Purchased
 intangibles are principally being amortized using the straight-line method
 over estimated useful lives of three to five years (see Note E).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|[13] | Valuation of Long-Lived Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | The Company
 evaluates the recoverability of its long-lived assets and requires the
 recognition of impairment of long-lived assets in the event the net book
 value of these assets exceeds the estimated future undiscounted cash flows
 attributable to these assets. The Company assesses potential impairment to
 its long-lived assets when there is evidence that events or changes in
 circumstances have made recovery of the assets carrying value unlikely.
 Should impairment exist, the impairment loss would be measured based on the
 excess of the carrying value of the assets over the assets fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-8

---



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[14] | New Accounting Standards:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | In December
 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations, (FAS
 141R). FAS 141R establishes principles and requirements for how an acquirer
 recognizes and measures in its financial statements the identifiable assets
 acquired, including goodwill, the liabilities assumed and any non-controlling
 interest in the acquiree. The Statement also establishes disclosure
 requirements to enable users of the financial statements to evaluate the
 nature and financial effects of the business combination. FAS 141R is
 effective for business combinations for which the acquisition date is on or
 after the beginning of the first annual reporting period beginning on or
 after December 15, 2008. The impact of adopting FAS 141R will be dependent on
 the future business combinations that the Company may pursue after its
 effective date.

In April 2008, the FASB
issued FASB Staff Position FAS 142-3, Determination
of the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3
amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset
under Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (FAS
142). The intent of FSP 142-3 is
to improve the consistency between the useful life of a recognized intangible
asset under FAS 142 and the period of expected cash flows used to measure the
fair value of the asset under FAS 141R, and other U.S. generally accepted
accounting principles. FSP 142-3 is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. Early adoption is prohibited. The Company is currently
assessing what the impact of the adoption of FSP 142-3 will be on the Companys
financial position and results of operations.

F-9

---



NOTE
B - INTUIT LAWSUIT

Siebert
commenced a lawsuit against Intuit, Inc. (Intuit) in 2003 seeking expenses
and damages arising from the Joint Brokerage Service conducted under the
Strategic Alliance Agreement between Siebert and Intuit. Intuit counterclaimed
against Siebert for expenses and damages. A Stipulation and Order of Dismissal
with Prejudice entered into by the parties was filed in October 2007,
terminating the litigation without any payments by either party. The parties
also exchanged general releases. As a result of the settlement, $2,024,000 of
liabilities recorded by Siebert for expenses prior to December 31, 2003, were
reversed in the fourth quarter of 2007.

NOTE C - INVESTMENT IN AFFILIATES

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

|                              |  |     |           |        |   |          |   |   |          
|----------------------------- |  | --- | --------- | ------ | - | -------- | - | - | ---------
|December
 31, 2008            |  | SBS |           | SBSFPC |   | TOTAL   
|                              |  |     |           |        |   |         
|                              |  |     |           |        |   |          |   |   |          
|Investment
 and advances      |  | $   | 6,087,000 |        | $ | 393,000  |   | $ | 6,480,000
|                              |  |     |           |        |   |          |   |   |          
|Income from
 equity investees |  | $   | 2,134,000 |        | $ | (435,000 | ) | $ | 1,699,000
|                              |  |     |           |        |   |          |   |   |          
|Distributions                 |  | $   | 1,078,000 |        | $ | 21,000   |   | $ | 1,099,000
|                              |  |     |           |        |   |          |   |   |          
|                              |  |     |           |        |   |          |   |   |          
|December
 31, 2007            |  | SBS |           | SBSFPC |   | TOTAL   
|                              |  |     |           |        |   |         
|                              |  |     |           |        |   |          |   |   |          
|Investment
 and advances      |  | $   | 5,055,000 |        | $ | 847,000  |   | $ | 5,902,000
|                              |  |     |           |        |   |          |   |   |          
|Income from
 equity investees |  | $   | 1,391,000 |        | $ | 41,000   |   | $ | 1,432,000
|                              |  |     |           |        |   |          |   |   |          
|Distributions                 |  | $   | 1,780,000 |        | $ | 648,000  |   | $ | 2,428,000
|                              |  |     |           |        |   |          |   |   |          
|                              |  |     |           |        |   |          |   |   |          
|December
 31, 2006            |  | SBS |           | SBSFPC |   | TOTAL   
|                              |  |     |           |        |   |         
|                              |  |     |           |        |   |          |   |   |          
|Income from
 equity investees |  | $   | 2,885,000 |        | $ | 916,000  |   | $ | 3,801,000
|                              |  |     |           |        |   |          |   |   |          
|Distributions                 |  | $   | 1,378,000 |        | $ | 49,000   |   | $ | 1,427,000
|                              |  |     |           |        |   |          |   |   |          

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

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

F-10

---



NOTE C - INVESTMENT IN AFFILIATES
(CONTINUED)

Summarized
financial data of SBS is as follows:

|                                                                                              |  |      |            |      |   |            |  |   |            | 
|--------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                                                              |  | 2008 |            | 2007 |   | 2006       | 
|                                                                                              |  |      |            |      |   |            | 
|                                                                                              |  |      |            |      |   |            |  |   |            | 
|Total assets, including secured demand note
 of 1,200,000 in each year due from Siebert       |  | $    | 21,508,000 |      | $ | 17,885,000 |  | $ |            | 
|Total liabilities, including subordinated
 liabilities $1,200,000 in each year due to Siebert |  |      | 9,453,000  |      |   | 7,984,000  |  |   |            | 
|Total members capital                                                                        |  |      | 12,055,000 |      |   | 9,901,000  |  |   |            | 
|Total revenue                                                                                 |  |      | 31,562,000 |      |   | 24,426,000 |  |   | 26,235,000 | 
|Net income                                                                                    |  |      | 4,354,000  |      |   | 2,840,000  |  |   | 5,888,000  | 
|Regulatory minimum net capital requirement                                                    |  |      | 550,000    |      |   | 452,000    |  |   |            | 

During 2008,
2007 and 2006, Siebert charged SBS $103,000, $240,000 and $240,000,
respectively for rent and general and administrative services, which Siebert
believes approximates the cost of furnishing such services. In addition, during
each of the years 2008, 2007 and 2006, Siebert earned interest income of
$64,000, $96,000 and $96,000, respectively from SBS in connection with
Sieberts obligation to make a subordinated loan for up to $1,200,000 available
to SBS and Siebert paid SBS interest earned on the restricted cash equivalents
of $46,000, $74,000 and $67,000. (See Note J)

Sieberts
share of undistributed earnings from SBS amounts to $5,515,000 and $4,459,000
at December 31, 2008 and 2007, 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:

|                        |  |      |             |      |   |            |  |   |           | 
|----------------------- |  | ---- | ----------- | ---- | - | ---------- |  | - | --------- | 
|                        |  | 2008 |             | 2007 |   | 2006       | 
|                        |  |      |             |      |   |            | 
|                        |  |      |             |      |   |            |  |   |           | 
|Total assets            |  | $    | 244,951,000 |      | $ | 82,772,000 |  |   |           | 
|Total liabilities       |  |      | 243,773,000 |      |   | 80,225,000 |  |   |           | 
|Total
 members capital |  |      | 1,178,000   |      |   | 2,546,000  |  |   |           | 
|Total
 revenue          |  |      | (1,008,000  | )*   |   | 680,000    |  | $ | 5,495,000 | 
|Net (loss) income       |  |      | (1,305,000  | )    |   | 123,000    |  |   | 2,750,000 | 

* Attributable to unrealized loss on derivative contracts.

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

At December 31, 2007, Sieberts  share of undistributed earnings of
SBSFPC amounts to $449,000.

F-11

---



NOTE D - FURNITURE, EQUIPMENT
AND LEASEHOLD IMPROVEMENTS, NET

Furniture,
equipment and leasehold improvements consist of the following:

|                                                |  |              |           |      |   |           |  
|----------------------------------------------- |  | ------------ | --------- | ---- | - | --------- | -
|                                                |  | December 31, |          
|                                                |  |              |          
|                                                |  | 2008         |           | 2007 |  
|                                                |  |              |           |      |  
|                                                |  |              |           |      |   |           |  
|Equipment                                       |  | $            | 2,039,000 |      | $ | 1,363,000 |  
|Leasehold
 improvements                         |  |              | 123,000   |      |   | 129,000   |  
|Furniture
 and fixtures                         |  |              | 39,000    |      |   | 41,000    |  
|                                                |  |              |           |      |   |           |  
|                                                |  |              |           |      |   |           |  
|                                                |  |              | 2,201,000 |      |   | 1,533,000 |  
|Less
 accumulated depreciation and amortization |  |              | (720,000  | )    |   | (496,000  | )
|                                                |  |              |           |      |   |           |  
|                                                |  |              |           |      |   |           |  
|                                                |  | $            | 1,481,000 |      | $ | 1,037,000 |  
|                                                |  |              |           |      |   |           |  

Depreciation
and amortization expense for the years ended December 31, 2008, 2007 and 2006
amounted to $383,000, $379,000 and $468,000, respectively.

NOTE E - INTANGIBLE ASSETS,
NET

In several
transactions during September and October of 2000, WFN acquired the stock of
WFN Womens Financial Network, Inc. (WFNI) and HerDollar.com, Inc.,
respectively, companies in the development stage which had yet to commence
principal operations, had no significant revenue and had assets consisting
principally of websites, content and domain names, for aggregate consideration
of $2,310,000 including costs. The transactions have been accounted for as
purchases of assets consisting of domain name, website and content, and a
non-compete agreement (the Acquired Intangible Assets). Related deferred tax
assets attributable to net operating loss carryforwards of the acquired
companies and deferred tax liabilities attributable to the excess of the statement
bases of the acquired assets over their tax bases have been reflected in the
accompanying consolidated financial statements as an adjustment to the carrying
amount of such intangibles (see Note F).

Intangible
assets consist of the following:

|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|---------------------------------- |  | ----------------------- | --------- | ------------------------- | - | ----------------------- |  | ------------------------- | --------- |  | - | --------- | 
|                                   |  | December 31, 2008       |           | December 31, 2007         |  
|                                   |  |                         |           |                           |  
|                                   |  | Gross
 Carrying
 Amount |           | Accumulated
 Amortization |   | Gross
 Carrying
 Amount |  | Amortization
 Accumulated |          
|                                   |  |                         |           |                           |   |                         |  |                           |          
|Amortizable
 assets:               |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Website,
 content and non-compete  |  | $                       | 2,350,000 |                           | $ | 2,350,000               |  | $                         | 2,350,000 |  | $ | 2,350,000 | 
|Retail
 brokerage accounts         |  |                         | 2,588,000 |                           |   | 2,563,000               |  |                           | 2,588,000 |  |   | 2,467,000 | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  | $                       | 4,938,000 |                           | $ | 4,913,000               |  | $                         | 4,938,000 |  | $ | 4,817,000 | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Unamortized
 intangible assets:    |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Domain
 name/intellectual property |  | $                       | 750,000   |                           |   |                         |  | $                         | 750,000   |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Amortization
 expense              |  |                         |           |                           | $ | 96,000                  |  |                           |           |  | $ | 311,000   | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 

Estimated
amortization expense is as follows:

|                           |  |   |        | 
|-------------------------- |  | - | ------ | 
|Year
 Ending
 December 31, |  |   |        | 
|                           |  |   |        | 
|2009                       |  | $ | 25,000 | 

F-12

---



NOTEF - INCOMETAXES

Income tax provision
consists of the following:

|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ---------- | ---- | ------------ | ---------- | ---- | - | --------- | -
|                                                                                                                                                                                                                                                               |  | Year Ended December 31, |           
|                                                                                                                                                                                                                                                               |  |                         |           
|                                                                                                                                                                                                                                                               |  | 2008                    |            | 2007 |              | 2006       |     
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |     
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|Federal income tax
 (benefit) provision:                                                                                                                                                                                                                       |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|Current                                                                                                                                                                                                                                                        |  | $                       | (787,000   | )    | $            | 1,356,000  |      | $ | 2,049,000 |  
|Deferred                                                                                                                                                                                                                                                       |  |                         |           |      |              | (32,000    | )    |   | (183,000  | )
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         | (787,000   | )    |              | 1,324,000  |      |   | 1,866,000 |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|State and local tax
 (benefit) provision:                                                                                                                                                                                                                      |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|Current                                                                                                                                                                                                                                                        |  |                         | 37,000     |      |              | 456,000    |      |   | 661,000   |  
|Deferred                                                                                                                                                                                                                                                       |  |                         | (281,000   | )    |              | (7,000     | )    |   | (43,000   | )
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         | (244,000   | )    |              | 449,000    |      |   | 618,000   |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|Total tax (benefit)
 provision:                                                                                                                                                                                                                                |  |                         |            |      |              |            |      |   |           |  
|Current                                                                                                                                                                                                                                                        |  |                         | (750,000   | )    |              | 1,812,000  |      |   | 2,710,000 |  
|Deferred                                                                                                                                                                                                                                                       |  |                         | (281,000   | )    |              | (39,000    | )    |   | (226,000  | )
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  | $                       | (1,031,000 | )    | $            | 1,773,000  |      | $ | 2,484,000 |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|A reconciliation between
 the income tax provision and income taxes computed by applying the statutory
 Federal income tax rate to income before taxes is as follows:                                                                                         
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  | Year Ended December 31, |           
|                                                                                                                                                                                                                                                               |  |                         |           
|                                                                                                                                                                                                                                                               |  | 2008                    |            | 2007 |              | 2006       |     
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |     
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|Expected income tax
 provision at statutory Federal tax rate (34%)                                                                                                                                                                                             |  | $                       | (949,000   | )    | $            | 1,370,000  |      | $ | 2,009,000 |  
|State and local taxes, net
 of Federal tax benefit                                                                                                                                                                                                             |  |                         | (160,000   | )    |              | 296,000    |      |   | 408,000   |  
|Permanent difference                                                                                                                                                                                                                                           |  |                         | 40,000     |      |              | 72,000     |      |   | 100,000   |  
|Other                                                                                                                                                                                                                                                          |  |                         | 38,000     |      |              | 35,000     |      |   | (33,000   | )
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|Income tax (benefit) expense                                                                                                                                                                                                                                   |  | $                       | (1,031,000 | )    | $            | 1,773,0000 |      | $ | 2,484,000 |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|Deferred income taxes
 reflect the impact of temporary differences between the amounts of assets and
 liabilities for financial reporting purposes and their tax basis. The
 principal items giving rise to deferred tax assets (liabilities) are as
 follows:
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      | December 31, |           
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |           
|                                                                                                                                                                                                                                                               |  |                         |            |      | 2008         |            | 2007 |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|Net operating losses                                                                                                                                                                                                                                           |  |                         |            |      | $            | 600,000    |      | $ | 339,000   |  
|Employee
 stock based compensation                                                                                                                                                                                                                             |  |                         |            |      |              | 237,000    |      |   |           |  
|Acquired Intangible assets                                                                                                                                                                                                                                     |  |                         |            |      |              | (308,000   | )    |   | (304,000  | )
|Furniture, equipment and
 leasehold improvements                                                                                                                                                                                                               |  |                         |            |      |              | (6,000     | )    |   | 182,000   |  
|Retail brokerage accounts                                                                                                                                                                                                                                      |  |                         |            |      |              | 625,000    |      |   | 650,000   |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  
|                                                                                                                                                                                                                                                               |  |                         |            |      | $            | 1,148,000  |      | $ | 867,000   |  
|                                                                                                                                                                                                                                                               |  |                         |            |      |              |            |      |   |           |  

F-13

---



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

Net operating loss
carryforwards of $775,000 at December 31, 2008, which are attributable to WFN,
expire through 2020. Utilization of such net operating loss carryforwards is
subject to annual limitations under Section 382 of the Internal Revenue Code.

In 2007 and 2006, the Company reduced current taxes payable by $2,000 and $51,000, respectively, resulting
from the deductibility of the difference between the exercise price of
nonqualifying stock options granted by the Company and the market value of the
stock on the dates of exercise. The tax benefit was recorded as a credit to
additional paid-in capital.

On January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes
(FIN 48). FIN 48 clarifies the criteria for recognizing tax benefits related to uncertain tax positions
and requires additional financial statement disclosure. As  required by FIN 48, the Company applied the more-likely-than-not
recognition threshold to all tax positions commencing at the adoption date which resulted in no unrecognized tax benefits in the
accompanying financial statements.

The Company is not subject
to any tax examinations for any federal or major state tax jurisdiction for
years prior to 2005.

The Company has elected to
record interest and penalties recognized in accordance with FIN 48 in the
financial statements as income taxes.

NOTEG - 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, 2008 and 2007, Siebert had net capital
of approximately $25,574,000 and $29,459,000, respectively, as compared with
net capital requirements of $250,000. Siebert claims exemption from the reserve
requirement under Section 15c3-3(k)(2)(ii).

On January 23, 2008, the
Board of Directors of the Company authorized a buy back of up to 300,000 shares
of common stock. Shares will be purchased from time to time in the open market
and in private transactions.

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

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

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

NOTEH - 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, 2008, options for 1,700,000
shares of common stock are available for grant under the Plan.

F-14

---



NOTE H  OPTIONS (CONTINUED)

A summary of the Companys
stock option transactions for the three years ended December 31, 2008 is
presented below:

|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|---------------------------------------------- | --- | ------ | --------- | ---------------------------------- | - | ------ | --- | ---------------------------------- | --------- | ------ | - | ---------------------------------- | --- |  | --------- | - | - | ---- | 
|                                               |     | 2008   |           | 2007                               |   | 2006   |    
|                                               |     |        |           |                                    |   |        |    
|                                               |     | Shares |           | Weighted
 Average
 Exercise
 Price |   | Shares |     | Weighted
 Average
 Exercise
 Price |           | Shares |   | Weighted
 Average
 Exercise
 Price |    
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |    
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|Outstanding - beginning of the year            |     |        | 1,467,200 |                                    | $ | 4.28   |     |                                    | 1,603,966 |        | $ | 4.16                               |     |  | 1,768,610 |   | $ | 4.16 | 
|Granted                                        |     |        | 300,000   |                                    | $ | 3.05   |     |                                    |           |        |   |                                    |     |  | 25,000    |   | $ | 2.75 | 
|Forfeited                                      |     |        |           |                                    |   |        |     |                                    | (126,966  | )      | $ | 4.36                               |     |  | (27,000   | ) | $ | 4.03 | 
|Exercised                                      |     |        |           |                                    |   |        | (d) |                                    | (9,800    | )      | $ | 2.70                               | (c) |  | (162,644  | ) | $ | 2.76 | 
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|Outstanding - end of year                      | (a) |        | 1,767,200 |                                    | $ | 4.07   |     |                                    | 1,467,200 |        | $ | 4.28                               |     |  | 1,603,966 |   | $ | 4.16 | 
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|Fully vested and expected to vest at year end  | (b) |        | 1,742,200 |                                    | $ | 4.08   |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|Exercisable at end of year                     | (b) |        | 1,742,200 |                                    | $ | 4.08   |     |                                    | 1,422,200 |        | $ | 4.30                               |     |  | 1,520,466 |   | $ | 4.32 | 
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|                                               |     |        |           |                                    |   |        |     |                                    |           |        |   |                                    |     |  |           |   |   |      | 
|Weighted average fair value of options granted |     |        |           |                                    | $ | 0.53   |     |                                    |           |        |   |                                    |     |  |           |   | $ | 1.85 | 

|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(a) | Weighted average remaining
 contractual terms of 4 years and aggregate intrinsic value of $0.
|    |                                                                                              
|(b) | Weighted average remaining
 contractual terms of 4 years and aggregate intrinsic value of $0.
|    |                                                                                              
|(c) | Intrinsic value of $123,000 at date of excercise.                                            
|    |                                                                                              
|(d) | Intrinsic value of $35,000 at date of excercise.                                             

As of December 31, 2008,
there was $35,000 of unrecognized compensation costs related to unvested
options which is expected to be recognized over a weighted-average period of 3
years.

The fair value of each
option award is estimated on the date of grant using the Black-Sholes option
pricing model using the following weighted-average assumptions for the years
ended December 31, 2008 and 2006:

|                         |  |        |   |      |       |   | 
|------------------------ |  | ------ | - | ---- | ----- | - | 
|                         |  | 2008   |   | 2006 |      
|                         |  |        |   |      |      
|                         |  |        |   |      |      
|Dividend yield           |  | 2.1    | % |      | 0.00  | % | 
|Expected volatility      |  | 104.69 | % |      | 50.40 | % | 
|Risk-free interest rate  |  | 3.18   | % |      | 4.82  | % | 
|Expected life (in years) |  | 4.1    |   |      | 7.5   |   | 

During 2008 and 2006, the Company
took into consideration guidance contained in SFAS No. 123R and SAB No. 107
when reviewing and developing assumptions for the option grants. The weighted
average expected life reflects the alternative simplified method permitted by
SAB No. 107, which defines the expected life as the average of the contractual
term of the options and the weighted-average vesting period for all option
tranches. Expected volatility is based on historical volatility over the
expected term. There were no options granted during 2007.

NOTE I - FINANCIAL INSTRUMENTS WITH OFF-BALANCESHEET RISKAND CONCENTRATIONS OF CREDIT RISK

In the normal course of
business, Siebert enters into transactions in various financial instruments
with off-balance sheet risk. This risk includes both market and credit risk,
which may be in excess of the amounts recognized in the statement of financial
condition. As of December 31, 2008 and 2007, no such financial instruments were
outstanding.

F-15

---



Retail customer transactions
are cleared through clearing brokers on a fully disclosed basis. In the event
that customers are unable to fulfill their contractual obligations, the
clearing broker may charge Siebert for any loss incurred in connection with the
purchase or sale of securities at prevailing market prices to satisfy
customers obligations. Securities transactions entered into as of December 31,
2008 settled with no adverse effect on Sieberts financial condition. Siebert
regularly monitors the activity in its customer accounts for compliance with
its margin requirements.

NOTE J - COMMITMENTS, CONTINGENCIES AND OTHER

Siebert terminated a clearing agreement with Pershing LLC
(Pershing) in 2003. Based on consultation with counsel, Siebert
believes that $1,500,000 that it advanced to Pershing in January 2003
should have been returned. Pershing
expressed its belief that it was entitled to retain the advance and receive a
minimum of $3 million for its unreimbursed costs, a termination fee of $500,000
and $5 million for lost revenues. Siebert received a release for the $3 million
related to disputed claims for unreimbursed fees and costs. In 2004, Siebert
decided not to commence proceedings against Pershing and charged off the
$1,500,000 advance to Pershing. Siebert believes the Pershing claims are
without merit and that the ultimate outcome of this matter will not have a
material adverse effect on the Companys results of operations or financial
position.

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

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

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

|                          |  |        |           | 
|------------------------- |  | ------ | --------- | 
|Year Ending
 December 31, |  | Amount |          
|                          |  |        |          
|                          |  |        |          
|2009                      |  |        | 902,000   | 
|2010                      |  |        | 709,000   | 
|2011                      |  |        | 172,000   | 
|2012                      |  |        | 68,000    | 
|                          |  |        |           | 
|                          |  |        |           | 
|                          |  | $      | 1,851,000 | 
|                          |  |        |           | 

Rent expense, including
escalations for operating costs, amounted to approximately $1,319,000,
$1,314,000 and $1,071,000 for the years ended December 31, 2008, 2007 and 2006,
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 2008, 2007 and 2006.

Siebert is party to a
Secured Demand Note Collateral Agreement with SBS which obligates Siebert to
lend SBS, on a subordinated basis, up to $1,200,000. The secured demand note
payable held by SBS and a related $1,200,000 receivable due from SBS are
included in investments in and advances to equity investees in the accompanying
consolidated statement of financial condition. Amounts that Siebert is
obligated to lend under this arrangement are collateralized by cash equivalents
of $1,300,000.

F-16

---



NOTE K  FAIR VALUE OF FINANCIALINSTRUMENTS

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

NOTE L - SUMMARIZED QUARTERLY FINANCIAL DATA(UNAUDITED)

|                           |  |                |           |                 |   |                |  |                 |           |                |   |                 |      |                |           |                 |   |           |  |   |           |   |   |            |    
|-------------------------- |  | -------------- | --------- | --------------- | - | -------------- |  | --------------- | --------- | -------------- | - | --------------- | ---- | -------------- | --------- | --------------- | - | --------- |  | - | --------- | - | - | ---------- | ---
|                           |  | 2008           |           | 2007            |  
|                           |  |                |           |                 |  
|                           |  | First
 Quarter |           | Second
 Quarter |   | Third
 Quarter |  | Fourth
 Quarter |           | First
 Quarter |   | Second
 Quarter |      | Third
 Quarter |           | Fourth
 Quarter |  
|                           |  |                |           |                 |   |                |  |                 |           |                |   |                 |      |                |           |                 |  
|Revenue                    |  | $              | 7,897,000 |                 | $ | 7,375,000      |  | $               | 7,165,000 |                | $ | 7,313,000       |      | $              | 8,072,000 |                 | $ | 8,139,000 |  | $ | 7,450,000 |   | $ | 10,253,000 | (a)
|Net (loss) income          |  | $              | (128,000  | )               | $ | 568,000        |  | $               | (931,000  | )              | $ | (1,269,000      | )(b) | $              | 985,000   |                 | $ | 716,000   |  | $ | (595,000  | ) | $ | 1,152,000  | (a)
|Earnings (loss) per share: |  |                |           |                 |   |                |  |                 |           |                |   |                 |      |                |           |                 |   |           |  |   |           |   |   |            |    
|Basic                      |  | $              | (0.01     | )               | $ | 0.03           |  | $               | (0.04     | )              | $ | (0.06           | )    | $              | 0.04      |                 | $ | 0.03      |  | $ | (0.03     | ) | $ | 0.05       |    
|Diluted                    |  | $              | (0.01     | )               | $ | 0.03           |  | $               | (0.04     | )              | $ | (0.06           | )    | $              | 0.04      |                 | $ | 0.03      |  | $ | (0.03     | ) | $ | 0.05       |    

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

(b) Includes $422,000 loss in the fourth quarter relating to
the  equity in losses of SBSFPC (See Note C).

F-17

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the
accompanying statements of financial condition of Siebert, Brandford, Shank
& Co., L.L.C. as of December 31, 2008 and 2007, 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, 2008. 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 generally accepted auditing standards as established by the Auditing Standards Board (United States) and
in accordance with the auditing standards of Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the
financial statements referred to above present fairly, in all material
respects, the financial position of Siebert, Brandford, Shank & Co., L.L.C.
as of December 31, 2008 and 2007, and the results of its operations changes in
members capital, changes in subordinated borrowings and its cash flows for each of the years in the three-year
period ended December 31, 2008 in conformity with accounting principles
generally accepted in the United States of America.

/s/ Eisner LLP

New York, New
York 
February 24, 2009

F-18

---



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

Statements of Financial Condition

|                                                      |  |              |            |      |   |            | 
|----------------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | 
|                                                      |  | December 31, |           
|                                                      |  |              |           
|                                                      |  | 2008         |            | 2007 |  
|                                                      |  |              |           
|                                                      |  |              |            |      |   |            | 
|ASSETS                                                |  |              |            |      |   |            | 
|Cash and cash equivalents                             |  | $            | 14,129,576 |      | $ | 11,651,394 | 
|Accounts receivable                                   |  |              | 1,415,585  |      |   | 1,354,222  | 
|Securities owned, at fair value                       |  |              | 161,873    |      |   | 180,871    | 
|Receivable from broker                                |  |              | 3,767,798  |      |   | 2,734,082  | 
|Receivable from affiliate                             |  |              | 32,212     |      |   | 55,345     | 
|Secured demand notes                                  |  |              | 1,200,000  |      |   | 1,200,000  | 
|Furniture, equipment and leasehold
 improvements, net |  |              | 199,250    |      |   | 204,190    | 
|Other assets                                          |  |              | 601,682    |      |   | 504,608    | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  | $            | 21,507,976 |      | $ | 17,884,712 | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|LIABILITIES AND MEMBERS CAPITAL                      |  |              |            |      |   |            | 
|Liabilities:                                          |  |              |            |      |   |            | 
|Payable to affiliate                                  |  | $            | 154,746    |      | $ | 188,581    | 
|Accounts payable and accrued expenses                 |  |              | 8,097,920  |      |   | 6,595,662  | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              | 8,252,666  |      |   | 6,784,243  | 
|                                                      |  |              |            |      |   |            | 
|Subordinated debt                                     |  |              | 1,200,000  |      |   | 1,200,000  | 
|                                                      |  |              |            |      |   |            | 
|Members capital                                      |  |              | 12,055,310 |      |   | 9,900,469  | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  |              |            |      |   |            | 
|                                                      |  | $            | 21,507,976 |      | $ | 17,884,712 | 
|                                                      |  |              |            |      |   |            | 

See notes to financial statements

F-19

---



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

Statements of Operations

|                                   |  |              |            |      |   |            |  |   |            | 
|---------------------------------- |  | ------------ | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                   |  | December 31, |           
|                                   |  |              |           
|                                   |  | 2008         |            | 2007 |   | 2006       | 
|                                   |  |              |           
|Revenues:                          |  |              |            |      |   |            |  |   |            | 
|Investment banking                 |  | $            | 20,880,695 |      | $ | 20,942,441 |  | $ | 22,175,826 | 
|Trading profits                    |  |              | 10,405,400 |      |   | 2,896,590  |  |   | 3,315,250  | 
|Interest and other                 |  |              | 275,923    |      |   | 586,643    |  |   | 743,533    | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              | 31,562,018 |      |   | 24,425,674 |  |   | 26,234,609 | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|Expenses:                          |  |              |            |      |   |            |  |   |            | 
|Employee compensation and benefits |  |              | 22,223,182 |      |   | 16,208,308 |  |   | 15,563,860 | 
|Clearing fees                      |  |              | 373,241    |      |   | 552,552    |  |   | 365,216    | 
|Communications                     |  |              | 730,755    |      |   | 635,037    |  |   | 593,246    | 
|Occupancy                          |  |              | 708,035    |      |   | 661,172    |  |   | 655,677    | 
|Professional fees                  |  |              | 153,025    |      |   | 97,276     |  |   | 290,797    | 
|Interest - related party           |  |              | 64,000     |      |   | 96,000     |  |   | 96,000     | 
|State and local income tax         |  |              | 130,518    |      |   | 324,571    |  |   | 182,004    | 
|General and administrative         |  |              | 2,824,879  |      |   | 3,011,081  |  |   | 2,599,982  | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              | 27,207,635 |      |   | 21,585,997 |  |   | 20,346,782 | 
|                                   |  |              |            |      |   |            |  |   |            | 
|                                   |  |              |            |      |   |            |  |   |            | 
|Net
 income                        |  | $            | 4,354,383  |      | $ | 2,839,677  |  | $ | 5,887,827  | 
|                                   |  |              |            |      |   |            |  |   |            | 

|                                   | 
|---------------------------------- | 
|See
 notes to financial statements | 

F-20

---



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

Statements of Changes in Members Capital

|                             |  |   |            |  
|---------------------------- |  | - | ---------- | -
|Balance -
 January 1, 2006   |  | $ | 7,618,790  |  
|Distributions to members     |  |   | (2,813,021 | )
|Net income                   |  |   | 5,887,827  |  
|                             |  |   |            |  
|                             |  |   |            |  
|Balance 
 December 31, 2006 |  |   | 10,693,596 |  
|Distributions to members     |  |   | (3,632,804 | )
|Net income                   |  |   | 2,839,677  |  
|                             |  |   |            |  
|                             |  |   |            |  
|Balance 
 December 31, 2007 |  |   | 9,900,469  |  
|Distributions to members     |  |   | (2,199,542 | )
|Net income                   |  |   | 4,354,383  |  
|                             |  |   |            |  
|                             |  |   |            |  
|Balance -
 December 31, 2008 |  | $ | 12,055,310 |  
|                             |  |   |            |  

|                                  | 
|--------------------------------- | 
|See notes to
financial statements | 

F-21

---



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

Statements of Changes in Subordinated Borrowings

|                            |  |   |           | 
|--------------------------- |  | - | --------- | 
|Balance - January 1, 2006   |  | $ | 1,200,000 | 
|Borrowings                  |  |   |          | 
|Repayments                  |  |   |          | 
|                            |  |   |           | 
|                            |  |   |           | 
|Balance  December 31, 2006 |  |   | 1,200,000 | 
|Borrowings                  |  |   |          | 
|Repayments                  |  |   |          | 
|                            |  |   |           | 
|                            |  |   |           | 
|Balance  December 31, 2007 |  |   | 1,200,000 | 
|Borrowings                  |  |   |          | 
|Repayments                  |  |   |          | 
|                            |  |   |           | 
|                            |  |   |           | 
|Balance - December 31, 2008 |  | $ | 1,200,000 | 
|                            |  |   |           | 

See notes to financial statements

F-22

---



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

Statements of Cash Flows

|                                                                                   |  |              |            |      |   |            |   |   |            |  
|---------------------------------------------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | - | - | ---------- | -
|                                                                                   |  | December 31, |           
|                                                                                   |  |              |           
|                                                                                   |  | 2008         |            | 2007 |   | 2006       |  
|                                                                                   |  |              |            |      |   |            |  
|                                                                                   |  |              |            |      |   |            |  
|Cash flows from operating activities:                                              |  |              |            |      |   |            |   |   |            |  
|Net income                                                                         |  | $            | 4,354,383  |      | $ | 2,839,677  |   | $ | 5,887,827  |  
|Adjustments to reconcile net income to net cash
provided by operating
 activities: |  |              |            |      |   |            |   |   |            |  
|Depreciation and amortization                                                      |  |              | 77,935     |      |   | 76,358     |   |   | 77,491     |  
|Changes in:                                                                        |  |              |            |      |   |            |   |   |            |  
|Securities owned, at fair value                                                    |  |              | 18,998     |      |   | (180,871   | ) |   | 580,145    |  
|Accounts receivable                                                                |  |              | (1,033,716 | )    |   | (42,706    | ) |   | (291,222   | )
|Receivable from broker-dealers                                                     |  |              | (61,363    | )    |   | 3,419,046  |   |   | (5,985,081 | )
|Payable to (receivable from) affiliate                                             |  |              | (73,941    | )    |   | 88,589     |   |   | (35,258    | )
|Other assets                                                                       |  |              | (33,835    | )    |   | (41,972    | ) |   | (47,900    | )
|Accounts payable and accrued expenses                                              |  |              | 1,502,258  |      |   | (704,848   | ) |   | 2,055,305  |  
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|Net
 cash provided by operating activities                                         |  |              | 4,750,719  |      |   | 5,453,273  |   |   | 2,241,307  |  
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|Cash flows from investing activities:                                              |  |              |            |      |   |            |   |   |            |  
|Purchase of property and equipment                                                 |  |              | (72,995    | )    |   | (85,803    | ) |   | (23,640    | )
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|Cash flows from financing activities:                                              |  |              |            |      |   |            |   |   |            |  
|Distributions to members                                                           |  |              | (2,199,542 | )    |   | (3,632,804 | ) |   | (2,813,021 | )
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|Net increase / (decrease) in cash and cash
 equivalents                            |  |              | 2,478,182  |      |   | 1,734,666  |   |   | (595,354   | )
|Cash and cash equivalents - beginning of year                                      |  |              | 11,651,394 |      |   | 9,916,728  |   |   | 10,512,082 |  
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|Cash and cash equivalents - end of year                                            |  | $            | 14,129,576 |      | $ | 11,651,394 |   | $ | 9,916,728  |  
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|                                                                                   |  |              |            |      |   |            |   |   |            |  
|Supplemental disclosures of cash flow information:                                 |  |              |            |      |   |            |   |   |            |  
|Taxes paid                                                                         |  | $            | 130,000    |      | $ | 304,570    |   | $ | 152,000    |  
|Interest paid                                                                      |  | $            | 64,000     |      | $ | 96,000     |   | $ | 96,000     |  

See notes to financial statements

F-23

---



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

Notes to Financial Statements 
December 31, 2008, 2007 and 2006

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANTACCOUNTING POLICIES

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] | Organization
 and basis of presentation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | 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] | Security
 transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Security transactions,
 commissions, revenues and expenses are recorded on a trade date basis.
 Securities owned are valued at fair value. The resulting unrealized gains and
 losses are reflected in income.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Dividends are recorded on
 the ex-dividend date, and interest income is recognized on an accrual basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|[3] | Investment
 banking:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Investment banking
 revenues include gains and fees, net of syndicate expenses, arising primarily
 from municipal bond offerings in which the Company acts as an underwriter or
 agent. Investment banking management fees are recorded on 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.                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|[4] | Furniture,
 equipment and leasehold improvements, net:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Furniture, equipment and
 leasehold improvements are stated at cost, net of accumulated depreciation
 and amortization. Depreciation is calculated using the straight-line method
 over the estimated useful lives of the assets, generally five years.
 Leasehold improvements are amortized over the period of the lease.                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|[5] | Cash
 equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | For purposes of reporting
 cash flows, cash equivalents include money market funds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|[6] | Use of
 estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The preparation of
 financial statements in conformity with accounting principles generally
 accepted in the United States of America requires management to make
 estimates and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent assets and liabilities at the date
 of the financial statements and the reported amounts of revenues and expenses
 during the reporting period. Actual results could differ from those
 estimates.                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|[7] | Valuation
 of investments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company adopted
 Statement of Financial Accounting Standards No. 157, Fair Value
 Measurements (SFAS 157), effective January 1, 2008. SFAS 157 clarifies
 that fair value is an estimate of the exit price, representing the amount
 that would be received to sell an asset or paid to transfer a liability in an
 orderly transaction between market participants (i.e., the exit price at the
 measurement date). Under SFAS 157, fair value measurements are not adjusted
 for transaction costs. SFAS 157 provides for use of a fair value hierarchy
 that 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.

F-24

---



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

Notes to Financial Statements 
December 31, 2008, 2007 and 2006

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANTACCOUNTING POLICIES (CONTINUED)

|    |                                       
|--- | --------------------------------------
|[7] | Valuation
 of investments: (continued)

| |         |                                                                                                                                                                                                       
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Level 3 | Unobservable inputs
 reflect the assumptions that the General Partner develops based on available
 information about the assumptions market participants would use in valuing
 the asset or liability.

|    |                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Securities owned at
 December 31, 2008 and 2007 consist of municipal bonds with fair values of
 $161,873 and $180,871, respectively, which are valued based on prices
 obtained from pricing sources, which derive values from observable inputs
 (Level 2).
|    |                                                                                                                                                                                                                                                             
|[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.     

NOTE B - SUBORDINATED BORROWINGS AND SECURED DEMAND
NOTE RECEIVABLE

The subordinated debt at
December 31, 2008 and 2007 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 as of December 31,
2008 and 8% interest as of December 31, 2007, and due August 31, 2010. Interest
expense paid to Siebert for each of the years ended 2008, 2007, and 2006
amounts to $64,000, $96,000 and $96,000, respectively.

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

The secured demand note
receivable of $1,200,000 is collateralized by cash equivalents of Siebert of
approximately $1,300,000 at December 31, 2008 and $1,300,000 at December 31,
2007. Interest earned on the collateral amounted to approximately $46,000,
$74,000 and $67,000 in 2008, 2007 and 2006, respectively.

NOTE C - FURNITURE, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, NET

Furniture, equipment and
leasehold improvements consist of the following:

|                                                |  |              |          |      |   |          |  
|----------------------------------------------- |  | ------------ | -------- | ---- | - | -------- | -
|                                                |  | December 31, |         
|                                                |  |              |         
|                                                |  | 2008         |          | 2007 |  
|                                                |  |              |          |      |  
|Equipment                                       |  | $            | 556,174  |      | $ | 492,782  |  
|Furniture and leasehold
 improvements           |  |              | 201,908  |      |   | 185,084  |  
|                                                |  |              |          |      |   |          |  
|                                                |  |              |          |      |   |          |  
|                                                |  |              | 758,082  |      |   | 677,866  |  
|Less accumulated depreciation
 and amortization |  |              | (558,832 | )    |   | (473,676 | )
|                                                |  |              |          |      |   |          |  
|                                                |  | $            | 199,250  |      | $ | 204,190  |  
|                                                |  |              |          |      |   |          |  

F-25

---



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

Notes to Financial Statements 
December 31, 2008, 2007 and 2006

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, 2008 and
2007, the Company had net capital of $12,075,530 and $10,028,000, respectively,
which was $11,525,353 and $9,575,000, respectively, in excess of its required
net capital and its ratio of aggregate indebtedness to net capital was .68 to
1, respectively. The Company claims exemption from the reserve requirements
under Section 15c-3-3(k)(2)(ii).

NOTE E - COMMITMENTS

The Company rents office
space under long-term operating leases expiring through 2013. These leases call
for base rent plus escalations for taxes and operating expenses. Future minimum
base rent under these operating leases are as follows:

|     |  |   |           |  | 
|---- |  | - | --------- |  | 
|Year |  |   | Amount    | 
|     |  |   |           | 
|     |  |   |           | 
|2009 |  | $ | 538,000   | 
|2010 |  |   | 354,000   | 
|2011 |  |   | 227,000   | 
|2012 |  |   | 191,000   | 
|2013 |  |   | 79,000    | 
|     |  |   |           | 
|     |  |   |           | 
|     |  | $ | 1,389,000 | 
|     |  |   |           | 

Rent expense including taxes
and operating expenses for 2008, 2007 and 2006 amounted to $708,035, $661,172
and $655,677, respectively.

NOTE F - OTHER

During 2008, 2007 and 2006,
the Company was charged $102,500, $240,000 and $240,000 by Siebert for general
and administrative services.

F-26

---



SIGNATURES

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

SIEBERT FINANCIAL CORP.

| |       |                       
| | ----- | ----------------------
| | By:   | /s/ MURIEL
 F. SIEBERT
| |       |                       
| |       | Muriel F.
 Siebert    
| |       | Chair and
 President  
| |       |                       
| | Date: | March 31,
 2009       

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

|                          |  |                                                                                                  |  |                
|------------------------- |  | ------------------------------------------------------------------------------------------------ |  | ---------------
|Name                      |  | Title                                                                                            |  | Date           
|                          |  |                                                                                                  |  |                
|/s/ Muriel
 F. Siebert    |  | Chair,
 President and Director
 (principal executive officer)                                    |  | March 31,
 2009
|                         
|Muriel F.
 Siebert       
|                          |  |                                                                                                  |  |                
|/s/ Jeanne
 Rosendale     |  | Executive
 Vice President,
 and General Counsel                                                  |  | March 31,
 2009
|                         
|Jeanne
 Rosendale        
|                          |  |                                                                                                  |  |                
|/s/ Joseph
 M. Ramos, Jr. |  | Chief
 Financial Officer
 and Assistant Secretary
 (principal financial and
 accounting officer) |  | March 31,
 2009
|                         
|Joseph M.
 Ramos, Jr.    
|                         
|                          |  |                                                                                                  |  |                
|/s/ Patricia
 L. Francy   |  | Director                                                                                         |  | March 31,
 2009
|                         
|Patricia L.
 Francy      
|                          |  |                                                                                                  | 
|/s/ Leonard
 M. Leiman    |  | Director                                                                                         |  | March 31,
 2009
|                         
|Leonard M.
 Leiman       
|                          |  |                                                                                                  |  |                
|/s/ Jane H.
 Macon        |  | Director                                                                                         |  | March 31,
 2009
|                         
|Jane H.
 Macon           
|                          |  |                                                                                                  |  |                
|/s/ Robert
 P. Mazzarella |  | Director                                                                                         |  | March 31,
 2009
|                         
|Robert P.
 Mazzarella    
|                          |  |                                                                                                  |  |                
|/s/ Nancy Peterson Hearn  |  | Director                                                                                         |  | March 31,
 2009
|                         
|Nancy Peterson Hearn     

---



EXHIBIT INDEX

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

---



|            |      |                         |                                                                                                                                                                                                                                                                                                                                             
|----------- | ---- | ----------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      | Description Of Document
|            |      |                        
|            | 10.5 |                         | Operating
 Agreement of SBS Financial Products Company, LLC, dated effective as of April
 19, 2005, by and among Siebert Financial Corp., Napoleon Brandford III and
 Suzanne Shank. (incorporated by reference to Siebert Financial Corp.s
 Current Report on Form 8-K filed with the Securities and Exchange Commission
 on May 17, 2005)
|            |      |                         |                                                                                                                                                                                                                                                                                                                                             
|            | 10.6 |                         | Siebert
 Financial Corp. 2007 Long-Term Incentive Plan (incorporated by reference to
 Siebert Financial Corp.s Registration Statement on Form S-8 (File No.
 333-144680) filed with the Securities and Exchange Commission on July 18,
 2007)                                                                                              
|            |      |                         |                                                                                                                                                                                                                                                                                                                                             
|            | 21   |                         | Subsidiaries
 of the registrant (incorporated by reference to Siebert Financial Corp.s
 Annual Report on Form 10-K for the year ended December 31, 2001)                                                                                                                                                                                   
|            |      |                         |                                                                                                                                                                                                                                                                                                                                             
|            | 23   |                         | Consent of
 Independent Auditors                                                                                                                                                                                                                                                                                                            
|            |      |                         |                                                                                                                                                                                                                                                                                                                                             
|            | 31.1 |                         | Certification
 of Muriel F. Siebert pursuant to Securities Exchange Act Rules 13a-14 and
 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                      
|            |      |                         |                                                                                                                                                                                                                                                                                                                                             
|            | 31.2 |                         | Certification
 of Joseph M. Ramos, Jr. pursuant to Securities Exchange Act Rules 13a-14 and
 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley act of 2002.                                                                                                                                                                  
|            |      |                         |                                                                                                                                                                                                                                                                                                                                             
|            | 32.1 |                         | Certification
 of Muriel F. Siebert of Periodic Financial Report under Section 906 of the
 Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                       
|            |      |                         |                                                                                                                                                                                                                                                                                                                                             
|            | 32.2 |                         | Certification
 of Joseph M. Ramos, Jr. of Periodic Financial Report under Section 906 of the
 Sarbanes- Oxley Act of 2002                                                                                                                                                                                                                   

---