SIEBERT FINANCIAL CORP - Quarter Report: 2007 September (Form 10-Q)

          Professional fees for the nine months ended September 30, 2007, was $4.6 million, an increase of $2.0 million or 77.0% from the same period in 2006 due to an increase in consulting fees relating to the commission recapture business and Sarbanes-Oxley and legal fees relating to the Intuit case and other compliance issues.

          Advertising and promotion expenses for the nine months ended September 30, 2007 were $638,000, a decrease of $242,000 or 27.5% from the same period in 2006 primarily due to the reduction in print advertising production in 2007 and the airing of television commercials in the Florida region in 2006.

          Communications expense for the nine months ended September 30, 2007, was $1.5 million, an increase of $209,000 or 15.7% from the same period in 2006 primarily due to an increase in costs associated with our new website.

          Occupancy costs for the nine months ended September 30, 2007 were $959,000, an increase of $97,000 or 11.3% from the same period in 2006 due to an increase in rent in the Florida branches and New Jersey and California offices.

          Other general and administrative expenses for the nine months ended September 30, 2007 were $2.2 million, a decrease of $34,000 or 1.6% from the same period in 2006. This decrease was a result of decreases in depreciation and amortization, placement fees, supplies, postage, registration and exchange fees offset by increases in printing, subscriptions, dues and transportation costs.

          Income from the Siebert’s equity investment in Siebert Brandford Shank & Co., LLC, an entity in which Siebert holds a 49% equity interest (“SBS”) for the nine months ended September 30, 2007, was $968,000, compared to income of $2.4 million, a decrease of $1.4 million or 60.0% from the same period in 2006. This decrease was due to SBS participating in less municipal bond offerings. SBS serves as an underwriter for 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 the nine months ended September 30, 2007, was $7,000 as compared to income from our equity investment in SBSFPC of $1.2 million from the same period in 2006. This decrease was due to a decrease in the number of transactions SBSFPC entered into in 2007. Income and loss from equity investees is considered to be integral to our operations and material to the results of operations.

          The tax provisions for the nine months ended September 30, 2007 and 2006 was $939,000 and $2.0 million, respectively, based on our income before income tax of $2.1 million and $4.8 million, respectively. Such provisions represented effective tax rates of 46% and 42%, respectively.

Liquidity and Capital Resources

          Our assets are highly liquid, consisting generally of cash, money market funds and commercial paper. Our total assets at September 30, 2007 were $48 million. As of that date, $36.1 million, or 76%, of total assets were regarded by us as highly liquid.

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

          Siebert is subject to the net capital requirements of the SEC, the NYSE and other regulatory authorities. At September 30, 2007, Siebert’s regulatory net capital was $28.6 million, $28.4 million in excess of its minimum capital requirement of $250,000.

          Siebert has entered into a Secured Demand Note Collateral Agreement with SBS under which it is obligated to lend to SBS up to $1.2 million pursuant to a secured promissory note on a subordinated basis. Amounts pledged 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, 2008, at which time SBS is obligated to repay to Siebert any amounts borrowed by SBS thereunder.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

          Working capital is generally temporarily invested in dollar denominated money market funds and commercial paper. These investments are not subject to material changes in value due to interest rate movements. We also invest in certain short-term municipal bonds, the values of which may fluctuate during the period they are held by us.

          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 counter parties are unable to fulfill their contractual obligations.

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Item 4T. 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 Exchange Act Rule 13a-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our 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 required disclosure.

          There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II - OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2006, which could materially affect our business, financial position and results of operations. There are no material changes from the risk factors set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2006.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

On May 15, 2000, our Board of Directors authorized a buy back of up to one million shares of our common stock. As of September 30, 2007, we had essentially completed the repurchase. A summary of our repurchase activity for the three months ended September 30, 2007 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
July 2007			0						999,500			500
August 2007			0						999,500			500
September 2007			0						999,500			500
Total			0						999,500			500

Item 3. Defaults Upon Senior Securities

            None

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Item 4. Submission of Matters to a Vote of Security Holders

            None

Item 5. Other Information

            None

Item 6. Exhibits

            (a)

	31.1	Certification of Muriel F. Siebert pursuant to 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 Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of Muriel F. Siebert of Periodic Financial Report under Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of Joseph M. Ramos, Jr. of Periodic Financial Report under Section 906 of the Sarbanes- Oxley Act of 2002.

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SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SIEBERT FINANCIAL CORP.
	By:	/s/ Muriel F. Siebert
		Muriel F. Siebert
		Chairwoman and President
		(principal executive officer)
	Dated: November 14, 2007
	By:	/s/ Joseph M. Ramos, Jr.
		Joseph M. Ramos, Jr.
		Executive Vice President and Chief Financial Officer
		(principal financial and accounting officer)
	Dated: November 14, 2007

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