Exhibit 10.5

                           HUDSON HOLDING CORPORATION

 COMPLAINT PROCEDURES FOR ACCOUNTING, INTERNAL ACCOUNTING CONTROLS AND AUDITING
                                    MATTERS

     (Adopted by the Audit Committee of the Board of Directors June 27 2006)

      The  Audit   Committee  of  the  Board  of  Directors  of  Hudson  Holding
Corporation  (the "Company")  hereby  establishes  these procedures for: (i) the
receipt,  retention and treatment of complaints regarding  accounting,  internal
accounting controls or auditing matters  (collectively,  "Accounting  Matters"),
and (ii) the confidential,  anonymous submission by employees of the Company and
its subsidiaries of concerns regarding questionable Accounting Matters.

Submission of Complaints:

      Employees  of the Company and its  subsidiaries  with  concerns  regarding
questionable  Accounting  Matters may report their  concerns to the Chair of the
Audit  Committee  of the Board of  Directors  of the  Company  in writing to the
following address:

      Chair of the Audit Committee
      c/o Hudson Holding Corporation
      525 Washington Boulevard
      Jersey City, NJ 07310

      Employees are encouraged to ensure that the submission includes sufficient
information  and  specificity  to allow the Audit Company to act on the reported
concerns. If so desired, employees may report such concerns anonymously.

Scope of Accounting Matters Covered by these Procedures:

      These  procedures  relate to  concerns  and  complaints  about  Accounting
Matters, including, without limitation, the following:

      o     Fraud or error in the  preparation,  evaluation,  review or audit of
            any financial statement of the Company

      o     Fraud or error in the recording or maintaining of financial  records
            of the Company

      o     deficiencies  in  or  non-compliance  with  the  Company's  internal
            accounting controls

      o     misrepresentation  or false  statement to or by a senior  officer or
            accountant  regarding a matter  contained in the financial  records,
            financial reports or audit reports of the Company

      o     any  deviation  from  full  and  fair  reporting  of  the  Company's
            financial condition and/or results of operations

Treatment of Complaints:

      Upon receipt of a complaint,  the Chair of the Audit  Committee  will: (i)
determine whether the complaint  actually pertains to an Accounting  Matter; and
(ii) when  possible,  acknowledge  receipt  of the  complaint  or concern to the
sender.

      The  Audit  Committee  will be  provided  with  copies  of all  complaints
pertaining to Accounting  Matters.  Complaints will be reviewed and investigated
under the  direction  of the Audit  Committee  and the  oversight  by such other
persons   as  the  Audit   Committee   shall   determine   to  be   appropriate.
Confidentiality  will be maintained to the fullest extent  possible,  consistent
with the need to conduct an adequate investigation.

      The Audit  Committee will report to the Board of Directors with respect to
a  complaint  for  which an  investigation  has been  completed,  including  any
corrective action taken or recommended. Prompt and appropriate corrective action
will be taken or recommended to the Board of Directors, when and as warranted in
the judgment of the Audit Committee.

<PAGE>

      The Company will not discharge,  demote,  suspend, harass or in any manner
discriminate  against any  employee in the terms and  conditions  of  employment
based  upon any  lawful  actions  of such  employee  with  respect to good faith
reporting of complaints  regarding  Accounting Matters or otherwise as specified
in Section 806 of the Sarbanes-Oxley Act of 2002.

Retention of Complaints:

      The Chair of the Audit  Committee  shall maintain a log of all complaints,
tracking  their  receipt,  investigation  and  resolution  and  shall  prepare a
periodic  summary report thereof for the Audit  Committee.  Copies of complaints
and  such log will be  maintained  in  accordance  with the  Company's  document
retention policy.

Administration of these Procedures:

      The Audit Committee shall periodically  review and revise these procedures
as necessary or appropriate.  The Audit Committee, in consultation with counsel,
if appropriate,  shall have the authority to make interpretations  regarding the
operation of these procedures.


                                       2