What changed in this filing

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Item 1. Business

2022-03-30 compared with 2021-03-10 · 214 added, 287 removed, 60 unchanged (89% of the section changed)

Overview of Company

Siebert Financial Corp., a New York corporation, incorporated in 1934, is a holding company that conducts the following lines of business through its wholly-owned subsidiaries:

Retail brokerage business through Muriel Siebert & Co., Inc.

(“MSCO”), a Delaware corporation and broker-dealer registered with the U.S Securities and Exchange Commission (“SEC”)

Investment advisory services through Siebert AdvisorNXT, Inc.

(“SNXT”), a New York corporation registered with the SEC as a Registered Investment Advisor (“RIA”) under the Investment

Advisers Act of 1940, as amended (“Advisers Act”)

Insurance services through Park Wilshire Companies, Inc.

(“PWC”), a Texas corporation and licensed insurance agency

Robo-advisory technology development through Siebert Technologies, LLC.

(“STCH”), a Nevada limited liability company

Prime brokerage services through WPS Prime Services, LLC (“WPS”), a Delaware limited liability company and a broker-dealer registered with the SEC

Siebert Financial Corp., a New York corporation, incorporated in 1934, is a holding company that conducts the following lines of business through its wholly-owned and majority-owned subsidiaries:

Muriel Siebert & Co., Inc.

(“MSCO”), which provides retail brokerage services.

MSCO is a Delaware corporation and broker-dealer registered with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934 (“Exchange Act”) and the Commodity Exchange Act of 1936, and member of the Financial Industry Regulatory Authority (“FINRA”), the New York Stock Exchange (“NYSE”), the Securities Investor Protection Corporation (“SIPC”), and the National Futures Association (“NFA”).

Siebert AdvisorNXT, Inc.

(“SNXT”), which provides investment advisory services.

SNXT is a New York corporation registered with the SEC as a Registered Investment Advisor (“RIA”) under the Investment Advisers Act of 1940 (“Advisers Act”)

Park Wilshire Companies, Inc.

(“PW”), which provides insurance services.

PW is a Texas corporation and licensed insurance agency

Siebert Technologies, LLC.

(“STCH”), which provides robo-advisory technology development.

STCH is a Nevada limited liability company  

RISE Financial Services, LLC, (“RISE”), which provides prime brokerage services.

RISE was formerly known as WPS Prime Services, LLC (“WPS”), a Delaware limited liability company and a broker-dealer registered with the SEC and NFA.

RISE is a woman-owned and operated financial services firm that offers a comprehensive suite of prime brokerage services aligned with the growing mission-driven Environmental Social and Governance (“ESG”) initiatives of institutional investors.

StockCross Digital Solutions, Ltd.

(“STXD”), an inactive subsidiary headquartered in Bermuda

Our headquarters are located at 120 Wall Street, New York, New York, 10005, with primary operations in New Jersey, Florida, and California.

Our phone number is (212) 644-2400 and our Internet address

is www.siebert.com.

(“STXD”), an inactive subsidiary headquartered in Bermuda.

Our headquarters are located at 535 Fifth Avenue, 4 th Floor, New York, NY 10017, with primary operations in New Jersey, Florida, and California.

Our phone number is (212) 644-2400 and our Internet address is www.siebert.com.

We have 12 branch offices throughout the U.S.

and clients around the world.

Our SEC filings are available through our website at www.siebert.com, where investors are able to obtain copies of our public filings free of charge.

common stock, par value $.01 per share (“Common Stock”) trades on the Nasdaq Capital Market under the symbol “SIEB.”

Our common stock is registered under Section 12 of the Exchange Act, and we file periodic reports with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy and information statements on Schedule 14.

The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding companies that file documents electronically with the SEC.

Our SEC filings are also available through our website at www.siebert.com, where investors are able to obtain copies of our public filings free of charge.

Our common stock, par value $.01 per share trades on the Nasdaq Capital Market under the symbol “SIEB.”

Siebert is a financial services company that provides a full range of brokerage, financial advisory, and insurance services through our operating subsidiaries.

Our mission is to create a strong financial future for our clients, shareholders, and strategic partners.

By leveraging Siebert’s strong legacy while investing in future technologies, we are committed to building a company that values our clients, shareholders, and employees.

Subsidiaries and Business Offerings

Muriel Siebert & Co., Inc.

Discount Brokerage and Related Services

MSCO became a discount broker on May 1, 1975 and is a member of The New York Stock Exchange, Inc.

The focus of MSCO’s discount brokerage business is to serve retail clients seeking a wide

selection of quality investment services, including traditional trading through a broker on the telephone or via the Internet.

As of December 31, 2019, MSCO cleared part of its securities transactions on a fully disclosed basis through its affiliate StockCross Financial Services, Inc.

(“StockCross”), as well as National

Financial Services Corp.

(“NFS”), a wholly-owned subsidiary of Fidelity Investments.

MSCO's clearing agreement contract with NFS which was set to expire in July 2017 has been extended on a month-to-month basis.

As of January 1, 2020, StockCross was merged with and into MSCO, and consequently all clearing services provided by StockCross were performed by MSCO.

Upon the merger with StockCross, MSCO became a

self-clearing broker-dealer and added the business lines of securities lending, equity stock plan services, and market making.

MSCO serves customers who generally make their own equity investment decisions by offering a number of value-added services, including easy access to account information.

MSCO was founded in 1967 by Muriel F.

(“Mickie”) Siebert, a trailblazer who was the first woman to own a seat on the NYSE and the first to head one of its member firms.

On May 1, 1975, after the federal government banned fixed commissions by brokers, Mickie broke barriers and declared MSCO a discount brokerage firm.

Today, MSCO offers a wide range of products and services and serves as the primary subsidiary of Siebert.

Products and Services

Self-directed trading

Wealth management / financial advice

Market making and fixed income investments

Stock borrow / stock loan

Equity compensation plans (Siebert Corporate Services)

Siebert 2021 Form-10K 2

Additional Information

Brokerage and Related Services

MSCO offers a wide selection of quality investment services, including broker assisted trades and free online self-service features such as real time quotes, market data, and trading tools.

Upon its merger with StockCross Financial Services, Inc., on January 1, 2020, MSCO became a self-clearing broker-dealer and added business lines such as securities lending, equity stock plan services, and market making.

MSCO also clears with National Financial Services Corp.

(“NFS”), a wholly-owned subsidiary of FMR, LLC.

Independent Retail Execution Services

MSCO and its clearing firms monitor order flow in an effort to ensure that customers are getting the best possible trade executions.

All equity orders are routed in a manner intended to afford MSCO’s customers the opportunity for price improvement on all orders.

MSCO also offers customers execution services through various market

centers for an additional fee, providing customers access to numerous market centers before and after regular market hours.

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 MSCO’s registered representatives.

Siebert 2020 Form-10K 2

MSCO and its clearing firms monitor order flow in efforts to ensure that customers are getting the best possible trade executions.

All equity orders are routed in a manner intended to afford MSCO’s customers the most favorable terms on all orders.

Customers may buy or sell fixed income securities, municipal bonds, corporate bonds, mortgage-backed securities, government sponsored enterprises, unit investment trusts, mutual funds, certificates of deposit, and other securities.

These transactions are serviced by MSCO’s registered representatives.

Retail Customer Service

MSCO believes that its superior customer service enhances its ability to compete with larger discount brokerage firms and provides retail customers with personal service via toll-free access to

dedicated customer service personnel for all of its products and services.

Customer service personnel are located in each of MSCO’s branch offices.

MSCO uses a variety of customer relationship management systems that enables representatives, no

matter where located, to review a customer’s requests.

MSCO believes that its superior customer service enhances its ability to compete with larger brokerage firms and provides retail customers with personal service via access to dedicated customer service personnel for all of its products and services.

Customer service personnel, located in MSCO’s branch offices, are cross trained to assist with all clients’

needs for a reliable experience.

MSCO uses a variety of customer relationship management systems that enables representatives, in any location, to review and respond to customers’

requests in a timely manner.

Retirement Accounts

MSCO offers customers a variety of self-directed retirement accounts.

Each IRA, SEP IRA, ROTH IRA, 401(k) and KEOGH account can be invested in mutual funds, stocks, bonds and other qualified

investments in a consolidated account.

Each IRA, SEP IRA, ROTH IRA, and KEOGH account can be invested in a variety of qualified investments in a consolidated account.

MSCO acts as its own custodian for retirement accounts and also utilizes NFS for IRA custody.

MSCO offers self-directed retirement accounts and also has registered representatives dedicated to assisting clients in meeting their retirement goals.

Customer Financing

Customer margin accounts are carried whereby money is lent to customers for a portion of the market value of marginable securities held in the customer’s account.

Margin loans are collateralized by

these securities.

Customer margin accounts are carried whereby money is lent to customers for a portion of the market value of marginable 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

financing, short sale or any other transaction, MSCO assumes the risk of its customers’ failure to meet their obligations in the event of adverse changes in the market affecting the value of the margined securities positions.

MSCO and NFS reserve the

right to set margin requirements higher than those established by the Federal Reserve System.

In permitting customers to engage in margin financing, short sale or any other transaction, MSCO assumes the risk of its customers’

failure to meet their obligations in the event of adverse changes in the market affect the value of the margined securities positions.

MSCO and NFS reserve the right to set margin requirements higher than those established by the Federal Reserve System.

MSCO 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, MSCO monitors accounts closely until their payment obligations are completed.

if the customer does not meet the commitment, MSCO takes steps to close out the

position and minimize any loss.

If the customer does not meet the required commitments, MSCO takes steps to close out the position and minimize any loss.

In the last five years, MSCO has not had any significant losses as a result of customers failing to meet commitments.

Information and Communications Systems

MSCO relies heavily on its data technology platform and the platform provided by its clearing agents.

These platforms offer interfaces to MSCO’s clearing service providers’ computing systems where

all customer account records are kept and are accessible through MSCO’s data technology platform.

MSCO’s systems also utilize browser-based access and other types of data communications.

MSCO’s representatives use NFS systems, by way of MSCO’s data

technology platform, to perform daily operational functions which include trade entry, trade reporting, clearing-related activities, risk management and account maintenance.

MSCO’s data technology platform offers services used in direct relation to customer 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.

MSCO’s data network is designed with redundancies in case a significant business disruption occurs.

MSCO’s voice network offers a call center feature that can route and queue calls for certain departments within the organization.

Additionally, the system’s 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, MSCO maintains backup systems and backup data, leverages cloud-based technology, and has a full-time

offsite disaster recovery site to ensure business continuity during a potential wide-spread disruption.

However, despite the preventive and protective measures in place, in the event of a wide-spread disruption, MSCO’s ability to satisfy the

obligations to customers and other securities firms may be significantly hampered or completely disrupted.

For more information regarding our business continuity plan, refer to the Business Continuity Statement on our website.

Client Service and Support

We provide retail customers with personal service via toll-free access to dedicated customer service personnel for all of our products and services.

Customer service personnel are located in all of

our branch offices across the country.

We use a variety of customer relationship management systems and utilize telephone routing systems to direct customers to the first available customer service representative regardless of branch

office location to reduce wait times.

We serve our customers through our phone and in-person outlets, and customers can access their account information and retrieve various forms on our website.

Siebert 2020 Form-10K 3

Cybersecurity

Cybersecurity presents significant challenges to the business community in general, as well as to the financial services industry.

Increasingly, bad actors, both domestically and internationally,

attempt to steal personal data and/or interrupt the normal functioning of businesses through accessing individuals’ and companies’ files and equipment connected to the Internet.

Recently, intruders have become increasingly sophisticated and use

deceptive methods to steal funds and personally identifiable information which they either take for their own purposes, release to the Internet, or hold for ransom.

Regulators are increasingly requiring companies to provide more advanced levels of

cybersecurity measures.

We continue to maintain systems and ongoing planning measures to prevent any such attack from disrupting our services to clients as well as to prevent any loss of data concerning our clients, their financial affairs, and

company-privileged information.

We contract cybersecurity consultants as well as other vendors to oversee detection and defense from such attacks.

See “Item 1A.

– We may be exposed to damage to our business or our reputation by cybersecurity breaches” for additional detail.

Siebert AdvisorNXT, Inc.

SNXT offers customers our proprietary robo-advisory technology that trading algorithms initially developed by STCH.

This technology provides clients with cost-efficient, competitively priced,

automated wealth management solutions intended to maximize portfolio returns based on their specific risk tolerance.

The platform utilizes Nobel Prize-winning Modern Portfolio Theory (“MPT”) to create optimal portfolios for each client.

web-based tools to enable clients to monitor and interact with the Robo-Advisor’s automated portfolio manager application.

In addition, clients who opt for the “Premier” line of service also have access to traditional wealth managers to supplement

the Robo-Advisor where appropriate.

MPT was developed by the economist Harry Markowitz and optimizes expected portfolio returns for specific levels of risk.

The technique requires a series of calculations in which all possible

combinations of potential asset classes are evaluated to determine the optimal blend of allocations for each individual client.

Due to the complexity of the analysis, services like this have historically only been available to clients with large

account balances who were willing to pay high fees.

By combining state-of-the-art technology with rigorous quantitative research, we provide the same quality of service to clients with smaller account sizes at a lower cost.

The Robo-Advisor selects low-cost, well-managed, exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”) that represent the asset classes that provide clients the necessary risk-adjusted

exposure given current market conditions.

In order to determine a client’s risk tolerance, a prospective client answers a series of objective questions posed in the form of an interactive digital interview.

Once a client’s risk tolerance is

determined, the Robo-Advisor’s algorithm utilizes MPT to create a theoretically optimal allocation across a diverse selection of asset classes, thus tailoring a portfolio to a client’s specific investment objectives and risk tolerance.

Robo-Advisor continuously monitors and periodically rebalances portfolios to address changes in market and economic conditions.

We plan to add new features and functionality to enhance this platform.

An upgrade to the Robo-Advisor is planned to launch in 2021, complete with a fully integrated mobile app targeting a new

generation of investors.

SNXT offers customers our proprietary robo-advisory technology that utilizes trading algorithms initially developed by STCH.

This technology provides clients with cost-efficient, competitively priced, and automated wealth management solutions intended to maximize portfolio returns based on specific risk tolerance.

The platform utilizes Nobel Prize-winning Modern Portfolio Theory (“MPT”) to create optimal portfolios for each client.

We provide web-based tools to enable clients to monitor and interact with the Robo-Advisor’s automated portfolio manager application.

Siebert 2021 Form-10K 3

In order to determine a client’s risk tolerance, a prospective client answers a series of objective questions posed in the form of an interactive digital interview.

Once a client’s risk tolerance is determined, the Robo-Advisor’s algorithm utilizes MPT to create a theoretically optimal allocation across a diverse selection of asset classes, thus tailoring a portfolio to a client’s specific investment objectives and risk tolerance.

The Robo-Advisor continuously monitors and periodically rebalances portfolios to address changes in market and economic conditions.

SNXT offers its clients access to investment managers and advisory services of Envestnet Asset Management, Inc.

(“Envestnet”).

Envestnet is registered with the SEC as an investment advisor and provides investment advisory services, technology services, and products to our advisory clients.

Upon contracting to an investment strategy proposal, clients grant full discretionary authority to Envestnet to determine the securities to be bought and sold, and the amount and time of those transactions.

Products and Services

Managed portfolios

Separately managed accounts

Park Wilshire Companies, Inc.

PWC is a full-service insurance agency founded in 2010 that we acquired in March 2018.

Our acquisition of PWC has expanded our product offering to include various insurance products such as fixed

annuities and property and casualty insurance.

PW is a full-service insurance agency founded in 2010.

Through PW, we have expanded our product offering to include various insurance products such as fixed annuities and property and casualty insurance.

Products and Services

Fixed annuities

Personal insurance

Property and casualty insurance

Natural disaster insurance

Life and disability

RISE Financial Services, LLC

In December 2019, we acquired WPS Prime Services, LLC, a prime brokerage focused on providing institutional quality services to hedge funds.

In November 2021, we purchased a minority stake in Tigress Holdings, LLC, (“Tigress”) a disabled and woman-owned financial services firm, in exchange for a minority stake in RISE and shares of Siebert stock.

As part of the transaction, Siebert rebranded WPS and changed its name to create RISE.

Cynthia DiBartolo, Tigress’

founder, was appointed to the of CEO of RISE, as well as to the Board of Directors of Siebert and RISE.

Gebbia was appointed to the position of Chief Impact Officer at RISE as well as to the Board of Directors of RISE.

RISE is a woman-owned, diverse financial services firm, extending Siebert’s 50+ year history of diversity, equity, and inclusion which began with Muriel Siebert.

RISE Prime, a division of RISE, specializes in offering a comprehensive suite of prime brokerage services aligned with the growing mission-driven Environmental, Social and Governance (ESG) initiatives of institutional investors.

RISE offers state of the art technology solutions, risk and analytic systems, capital introduction and trading capabilities that can accommodate the complex business requirements from the most sophisticated hedge funds to the growing sector of emerging managers.

RISE maintains a prime clearing relationship with BNY Mellon Bank - Pershing, positioning RISE to serve as a strategic partner to institutional clients when diversity and access to best-in-class prime brokerage services matter.

Products and Services

Financing solutions

Execution services

Securities lending

Client service

Capital introductions

Siebert 2021 Form-10K 4

Siebert Technologies, LLC

In August 2018, we acquired STCH which is a technology company initially tasked with developing a Robo-Advisor platform.

With the acquisition of STCH, we expanded our products and services by

offering a Robo-Advisor through SNXT that provides clients with an automated wealth management solution intended to maximize portfolio returns based on a client’s specific risk tolerance.

In September 2019, the name of this subsidiary was changed

from KCA Technologies, LLC.

to Siebert Technologies, LLC.

WPS Prime Services, LLC

In December 2019, we acquired WPS, a leading prime brokerage services provider.

Founded in 2007, WPS is a prime brokerage business focused on providing institutional quality services to hedge funds.

With a focus on capital raising and cutting-edge technology, WPS has created a platform which clients can leverage in seeking to grow their businesses.

This platform offers clients a scalable solution for prime brokerage, capital raising solutions,

automated separately managed account infrastructure, exceptional client service and access to custody and clearing partners.

WPS’ comprehensive global platform that includes institutional equity, outsourced trading, automated allocation technology

and sophisticated portfolio reporting.

Siebert 2020 Form-10K 4

WPS clears its securities transactions on a fully disclosed basis through its clearing broker-dealers, The Goldman Sachs Group, Inc.

(“Goldman Sachs”) and Pershing LLC (“Pershing”), and are operating

on a month-to-month basis with these entities.

STCH is a technology company initially tasked with developing a Robo-Advisor platform.

Through STCH, we expanded our products and services by offering a Robo-Advisor through SXNT, and we plan to use this subsidiary for future fintech opportunities and products and services.

Strategic Acquisitions, Investments, and Partnerships

Hedge Connection

In January 2022, we acquired a minority stake in Hedge Connection, Inc.

(“Hedge Connection”), a woman-owned FinTech company offering a patented enterprise capital introduction SaaS solution, branded as “FUEL.”

The founder of Hedge Connection, Lisa Vioni, was appointed as President of RISE Prime –

Head of Capital Introductions, and was appointed to the Board of RISE.

FUEL is a powerful platform that allows hedge fund managers to connect with a global pool of institutional investors and retain control over how their information is shared while helping allocators to streamline due diligence.

FUEL provides RISE Prime with a technology solution to efficiently scale a comprehensive capital introduction program for clients.

Tigress Holdings, LLC

In November 2021, we purchased a minority stake in Tigress, the parent company of Tigress Financial Partners, LLC, (“Tigress Financial Partners”), a disabled and woman-owned financial services firm, in exchange for a minority stake in RISE and shares of Siebert stock.

Tigress Financial Partners provides institutional and high net worth investors with expertise in investment banking, capital markets, research, corporate advisory and global trade execution services, asset management and global wealth management.

Tigress Financial Partners serves as a strategic diversity partner to corporate issuers, bookrunners, hedge funds and private equity firms and is the first disabled and woman-owned Floor Broker and Member of the NYSE in the Big Board’s 229-Year history.

This partnership aligns two key broker-dealers on Wall Street with a shared culture, and the transaction’s focus on ESG and charitable initiatives aligns with Cynthia DiBartolo and Gloria Gebbia’s extensive involvement with charitable organizations.

StockCross Financial Services, Inc.

In January 2019, we acquired approximately 15% ownership of StockCross, a clearing broker-dealer that was under common ownership with Siebert.

Effective January 1, 2020, we acquired the remaining 85%

of StockCross’ outstanding shares, and StockCross was merged with and into MSCO.

Effective January 1, 2020, we acquired the remaining 85% of StockCross’

outstanding shares, and StockCross was merged with and into MSCO.

As of January 1, 2020, all clearing services provided by StockCross were performed by MSCO.

The acquisition of StockCross provides new business lines such as market-making, equity stock plan services, self-clearing and custody, IRA custodianship and securities lending.

Merging StockCross

into MSCO increases our total net capital and assets under management as well as adds two retail branches.

StockCross provides an equity stock plan service business line that offers integrated and comprehensive solutions to corporate service clients

and employee participants.

Hired New Leaders of Securities Finance Group

In November 2020, we hired Anthony Palmeri and Jerry Losurdo to lead our Securities Finance Group, a division which consists primarily of our stock borrow / stock loan and related services.

Palmeri and Mr.

Losurdo bring their industry expertise and connections to the current strength of the division, and we have already begun to see positive results under their leadership.

During 2020, we have increased the quarter-over-quarter revenue

of the division as well as added a variety of new counterparties.

As part of the 2019 Russell U.S.

Indexes reconstitution, our stock was included in the Russell 2000 ® Index, effective after the U.S.

market opened on July 1, 2019.

are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies.

Approximately $9 trillion in assets are benchmarked against Russell U.S.

Russell Indexes are part of FTSE

Russell, a leading global index provider.

We encounter significant competition from full-commission, online and discount brokerage firms, including zero commission firms, as well as from financial institutions, mutual fund sponsors and other

organizations.

Although there has been consolidation in the industry in both the online and traditional brokerage business during recent years, we believe that additional competitors such as banks, insurance companies, providers of online financial

and information services, and others will continue to be attracted to the brokerage industry.

The acquisition of StockCross provided new business lines such as market-making, equity stock plan services, self-clearing and custody, IRA custodianship and securities lending.

Merging StockCross into MSCO increased our total net capital and assets under management and added two retail branches.

StockCross also provided an equity stock plan service business line that offers integrated and comprehensive solutions to corporate service clients and employee participants.

We encounter significant competition from full-commission, online and discount brokerage firms, including zero commission firms, as well as from financial institutions, mutual fund sponsors, venture-backed technology and cryptocurrency firms, and other organizations.

We compete with a wide variety of vendors of financial services for the same customers;

however, our success in the financial services industry is a result

of our high-quality customer service, responsiveness, products offered, and excellent executions.

however, our success in the financial services industry is a result of our high-quality customer service, responsiveness, products offered, and excellent executions.

Siebert 2021 Form-10K 5

Cybersecurity

Cybersecurity presents significant challenges to the business community in general, as well as to the financial services industry.

Increasingly, bad actors, both domestically and internationally, attempt to steal personal data and/or interrupt the normal functioning of businesses through accessing individuals’

and companies’

files and equipment connected to the Internet.

Recently, intruders have become increasingly sophisticated and use deceptive methods to steal funds and personally identifiable information which they either take for their own purposes, release to the Internet, or hold for ransom.

Regulators are increasingly requiring companies to provide more advanced levels of cybersecurity measures.

We contract cybersecurity consultants as well as other vendors to oversee detection and defense from such attacks.

Refer to Item 1A.

Risk Factors for more detail.

The securities industry in the U.S.

1 unchanged sentence

The SEC is the federal agency charged with administration of the federal securities laws.

MSCO and WPS are registered as broker-dealers with the SEC.

MSCO is a member of the NYSE and the Financial Industry Regulatory Authority (“FINRA”).

Much of the regulation of broker-dealers has been delegated to self-regulatory organizations (“SROs”),

principally FINRA and national securities exchanges such as the NYSE, which is MSCO’s primary regulator with respect to financial and operational compliance.

These SROs adopt rules (subject to approval by the SEC) governing the industry and conduct

periodic examinations of broker-dealers.

MSCO and RISE are registered as broker-dealers with the SEC.

MSCO is a member of the NYSE and the FINRA.

Much of the regulation of broker-dealers has been delegated to self-regulatory organizations (“SROs”), principally FINRA, which is MSCO’s and RISE’s primary regulator with respect to financial and operational compliance.

These SROs 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.

MSCO is registered as a broker-dealer in 50 states, the District of Columbia, and Puerto

MSCO is registered as a broker-dealer in 50 states, the District of Columbia, and Puerto Rico, and RISE is registered as a broker-dealer in 22 states and territories.

These regulations affect our business operations and impose capital, client protection, and market conduct requirements.

Conduct and Training

The principal purpose of regulation and discipline of broker-dealers is the protection of customers and the securities markets.

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 SROs or changes in the interpretation or enforcement of existing laws and rules may directly affect the method of operation and profitability of broker-dealers.

The SEC, SROs 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, its officers or its employees.

Dodd-Frank Act of 2010

well as other recent regulatory reforms, we have experienced significant changes in the laws and regulations that apply to us, how we are regulated, and regulatory expectations in the areas of compliance, risk management, corporate governance,

operations, capital and liquidity.

Siebert 2020 Form-10K 5

As a result of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 (“Dodd-Frank”), the adoption of implementing regulations by the federal regulatory agencies as well as other recent regulatory reforms, we have experienced significant changes in the laws and regulations that apply to us, how we are regulated, and regulatory expectations in the areas of compliance, risk management, corporate governance, operations, capital and liquidity.

Regulation Best Interest

Pursuant to the Dodd-Frank Act, the SEC was charged with considering whether broker-dealers should be subject to a standard of care similar to the fiduciary standard applicable to RIAs.

In June 2019,

the SEC adopted a package of rulemakings and interpretations related to the provision of advice by broker-dealers and investment advisers, including Regulation Best Interest and Form CRS.

Among other things, Regulation Best Interest requires a

broker-dealer to act in the best interest of a retail customer when making a recommendation to that customer of any securities transaction or investment strategy involving securities.

Form CRS requires that broker-dealers and investment advisers

provide retail investors with a brief summary document containing simple, easy-to-understand information about the nature of the relationship between the parties.

Regulation Best Interest and Form CRS have a compliance date of June 30, 2020.

In June 2019, the SEC adopted a package of rulemakings and interpretations related to the provision of advice by broker-dealers and investment advisers, including Regulation Best Interest and Form CRS.

Among other things, Regulation Best Interest requires a broker-dealer to act in the best interest of a retail customer when making a recommendation to that customer of any securities transaction or investment strategy involving securities.

Form CRS requires that broker-dealers and investment advisers provide retail investors with a brief summary document containing simple, easy-to-understand information about the nature of the relationship between the parties.

Regulation Best Interest and Form CRS had a compliance date of June 30, 2020.

Regulation Best Interest Rules have impacted the conduct of our business, especially with respect to our business with our retail clients.

The need for enhanced documentation for recommendations of

securities transactions to broker-dealer retail clients as well as the increased supervision of sales practices and transactions have increased the amount of record-keeping and training for our sales staff.

The related new rules and procedures may

bring increased costs associated with compliance and enhanced technology.

We reviewed our business practices and operating models in light of the Regulation Best Interest Rules and made structural, technological and operational changes to our business leading up to the

effective date of June 30, 2020 for compliance with the Regulation Best Interest Rules.

The need for enhanced documentation for recommendations of securities transactions to broker-dealer retail clients as well as the increased supervision of sales practices and transactions have increased the amount of record-keeping and training for our sales staff.

The related new rules and procedures have and may continue to bring increased costs associated with compliance and enhanced technology.

Siebert 2021 Form-10K 6

We reviewed our business practices and operating models in light of the Regulation Best Interest Rules and made structural, technological and operational changes to our business leading up to the effective date of June 30, 2020 for compliance with the Regulation Best Interest Rules.

As a result, we conducted thorough training of all our employees with respect to the requirements of Regulation Best Interest.

Additionally, we created the

Regulation Best Interest Rule’s required documents and completed each of the required mailings (both electronic and conventional) prior to the effective date.

We believe that the changes made to our business processes will result in compliance with

these new requirements.

Additionally, we created the Regulation Best Interest Rule’s required documents and completed each of the required mailings (both electronic and conventional) prior to the effective date.

We believe that the changes made to our business processes resulted in compliance with these new requirements.

As business continues to be conducted under the Regulation Best Interest Rules, it is likely that additional changes may be necessary.

It is noteworthy that the newly elected Congress is calling for additional regulation of

the securities industry and calling for full fiduciary rules in lieu of Regulation Best Interest.

Conduct and Training

The principal purpose of regulation and discipline of broker-dealers is the protection of customers and the securities markets.

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 SROs or changes in the interpretation or enforcement of existing laws and rules may directly affect

the method of operation and profitability of broker-dealers.

The SEC, SROs 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, its officers or its employees.

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 $250,000 on claims for cash balances.

SIPC is principally funded through assessments on

registered broker-dealers.

In addition, NFS has purchased from private insurers additional account protection in the amount of $1 billion in the event of liquidation up to the net asset value, as defined, of each account.

MSCO maintains $50 million

additional account protection above SIPC coverage.

As a registered broker-dealer and FINRA member organization, MSCO 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 $250,000 on claims for cash balances.

SIPC is principally funded through assessments on registered broker-dealers.

MSCO purchased $50 million additional account protection above SIPC coverage.

Equities, 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.

MSCO is also authorized by the Municipal Securities Rulemaking Board (“MSRB”) to affect 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.

Neither SIPC protection nor the additional protection insures against fluctuations in the market value of securities.

MSCO is also authorized by the Municipal Securities Rulemaking Board (“MSRB”) to affect 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

Margin lending activities are subject to limitations imposed by regulations of the Federal Reserve System and FINRA.

In general, these regulations provide that, in the event of a significant decline

in the value of securities collateralizing a margin account, we are required to obtain additional collateral from the borrower or liquidate securities positions.

Margin lending arranged by MSCO through third parties 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

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In general, these regulations provide that, in the event of a significant decline in the value of securities collateralizing a margin account, we are required to obtain additional collateral from the borrower or liquidate securities positions.

Margin lending arranged by MSCO through third parties 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.

Investment Advisers Act of 1940

SNXT is registered with the SEC as an investment adviser pursuant to the Advisers Act.

The Advisers Act, together with the SEC’s regulations and interpretations thereunder, is a highly prescriptive

regulatory statute.

The SEC is authorized to institute proceedings and impose sanctions for violations of the Advisers Act, ranging from fines and censures to termination of an adviser’s registration and, in the case of willful violations, can refer

a matter to the Unites States Department of Justice for criminal prosecution.

The Advisers Act, together with the SEC’s regulations and interpretations thereunder, is a highly prescriptive regulatory statute.

Under the Advisers Act, an investment adviser (whether or not registered under the Advisers Act) owes fiduciary duties to its clients.

These duties impose standards, requirements and limitations on,

among other things, trading for proprietary, personal and client accounts;

These duties impose standards, requirements and limitations on, among other things, trading for proprietary, personal and client accounts;

allocations of investment opportunities among clients;

use of “soft dollar arrangements,” a practice that involves using client brokerage commissions to purchase research or

other services that help managers make investment decisions;

use of “soft dollar arrangements,”

a practice that involves using client brokerage commissions to purchase research or other services that help managers make investment decisions;

execution of transactions;

7 unchanged sentences

and solicitation of clients.

The SEC has legal authority to inspect any investment adviser and

typically inspects a RIA periodically to determine whether the adviser is conducting its activities in compliance with (i) applicable laws and regulations, (ii) disclosures made to clients and (iii) adequate systems, policies and procedures

reasonably designed to prevent and detect violations.

Section 28(e) of the Exchange Act provides a “safe harbor” to investment managers who use commission dollars generated by their advised accounts to obtain investment research and brokerage services

that provide lawful and appropriate assistance to the manager in the performance of investment decision-making responsibilities.

SNXT, as a matter of policy, does not use “soft dollars” and as such, it has no incentive to select or recommend a broker

or dealer based on any interest in receiving research or related services.

Rather, as a fiduciary, SNXT selects brokers based on its clients’ interests in receiving best execution.

The SEC has legal authority to inspect any investment adviser and typically inspects a RIA periodically to determine whether the adviser is conducting its activities in compliance with (i) applicable laws and regulations, (ii) disclosures made to clients and (iii) adequate systems, policies and procedures reasonably designed to prevent and detect violations.

Section 28(e) of the Exchange Act provides a “safe harbor”

to investment managers who use commission dollars generated by their advised accounts to obtain investment research and brokerage services that provide lawful and appropriate assistance to the manager in the performance of investment decision-making responsibilities.

SNXT, as a matter of policy, does not use “soft dollars”

and as such, it has no incentive to select or recommend a broker or dealer based on any interest in receiving research or related services.

Rather, as a fiduciary, SNXT selects brokers based on its clients’

interests in receiving best execution.

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Bank Secrecy Act of 1970

SNXT conducts financial services activities that are subject to the Bank Secrecy Act of 1970 (“BSA”), as amended by the USA PATRIOT Act of 2001 (“PATRIOT Act”), which require financial institutions

to develop and implement programs reasonably designed to achieve compliance with these regulations.

The BSA and PATRIOT Act include a variety of monitoring, recordkeeping and reporting requirements (such as currency transaction reporting and

suspicious activity reporting) as well as identity verification and client due diligence requirements, which are intended to detect, report and/or prevent money laundering, and the financing of terrorism.

In addition, SNXT is subject to U.S.

We conduct financial services activities that are subject to the Bank Secrecy Act of 1970 (“BSA”), as amended by the USA PATRIOT Act of 2001 (“PATRIOT Act”), which require financial institutions to develop and implement programs reasonably designed to achieve compliance with these regulations.

The BSA and PATRIOT Act include a variety of monitoring, recordkeeping, and reporting requirements (such as currency transaction reporting and suspicious activity reporting) as well as identity verification and client due diligence requirements, which are intended to detect, report and/or prevent money laundering, and the financing of terrorism.

In addition, we are subject to U.S.

sanctions programs administered by the Office of Foreign Assets Control.

Net Capital and Best Execution

As registered broker-dealers, MSCO and WPS are subject to the requirements of the Exchange Act relating to broker-dealers such as minimum net capital requirements under the SEC Uniform Net Capital

Rule (Rule 15c3-1).

MSCO is subject to “best execution” requirements for client trades under SEC guidelines and FINRA rules, and segregation of fully paid client funds and securities under the SEC Customer Protection Rule (Rule 15c3-3), administered

by the SEC and FINRA.

As registered broker-dealers, MSCO and RISE are subject to the requirements of the Exchange Act relating to broker-dealers such as minimum net capital requirements under the SEC Uniform Net Capital Rule (Rule 15c3-1), “best execution”

requirements for client trades under SEC guidelines and FINRA rules, and segregation of fully paid client funds and securities under the SEC Customer Protection Rule (Rule 15c3-3), administered by the SEC and FINRA.

Net capital rules are designed to protect clients, counterparties and creditors by requiring a broker-dealer to have sufficient liquid resources available to satisfy its financial obligations.

capital is a measure of a broker-dealer’s readily available liquid assets, reduced by its total liabilities other than approved subordinated debt.

Under the SEC Uniform Net Capital Rule, a broker-dealer may not repay any subordinated borrowings, pay

cash dividends or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount below required levels.

Failure to maintain the required regulatory net capital may subject a firm to

suspension or expulsion by the NYSE or FINRA, as well as certain punitive actions by the SEC and other regulatory bodies, which ultimately could require a firm’s liquidation.

As explained in SEC guidelines and FINRA rules, brokers are required to seek the “best execution” reasonably available for their clients’ orders.

In part, this requires brokers to use reasonable

diligence so that the price to the client is as favorable as possible under prevailing market conditions.

MSCO sends client orders to a number of market centers, including market makers and exchanges, which encourages competition and ensures

necessarily limited to, speed of execution, price improvement opportunities, differences in price disimprovement, likelihood of executions, the marketability of the order, size guarantees, service levels and support, the reliability of order handling

systems, client needs and expectations, transaction costs, and whether the firm will receive remuneration for routing order flow to such market centers.

Price improvement is available under certain market conditions and for certain order types and we

regularly monitor executions to ensure best execution standards are met.

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Net capital is a measure of a broker-dealer’s readily available liquid assets, reduced by its total liabilities other than approved subordinated debt.

Under the SEC Uniform Net Capital Rule, a broker-dealer may not repay any subordinated borrowings, pay cash dividends or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount below required levels.

Failure to maintain the required regulatory net capital may subject a firm to suspension or expulsion by the NYSE or FINRA, as well as certain punitive actions by the SEC and other regulatory bodies, which ultimately could require a firm’s liquidation.

Best Execution

As explained in SEC guidelines and FINRA rules, brokers are required to seek the “best execution”

reasonably available for their clients’

In part, this requires brokers to use reasonable diligence so that the price to the client is as favorable as possible under prevailing market conditions.

MSCO and RISE send client orders to a number of market centers, including market makers and exchanges, which encourages competition and ensures redundancy.

For non-directed client orders, it is our policy to route orders to market centers based on a number of factors that are more fully discussed in the Supplemental Materials of FINRA Rule 5310, including, where applicable, but not necessarily limited to, speed of execution, price improvement opportunities, differences in price dis-improvement, likelihood of executions, the marketability of the order, size guarantees, service levels and support, the reliability of order handling systems, client needs and expectations, transaction costs, and whether the firm will receive remuneration for routing order flow to such market centers.

Price improvement is available under certain market conditions and for certain order types and we regularly monitor executions to ensure best execution standards are met.

Consumer Financial Information Privacy

In providing services to clients, we manage, utilize and store sensitive and confidential client data, including personal data.

As a result, we are subject to numerous laws and regulations designed

to protect this information, such as U.S.

As a result, we are subject to numerous laws and regulations designed to protect this information, such as U.S.

federal and state laws governing the protection of personally identifiable information.

These laws and regulations are increasing in complexity and number, change frequently and sometimes conflict.

extent they are applicable to us, we must comply with federal and state information-related laws and regulations in the United States, including the Gramm-Leach-Bliley Act of 1999, SEC Regulation S-P, the Fair Credit Reporting Act of 1970, as

amended, and Regulation S-ID, as well as the California Consumer Protection Act and further potential federal and state requirements.

To the extent they are applicable to us, we must comply with federal and state information-related laws and regulations in the United States, including the Gramm-Leach-Bliley Act of 1999, SEC Regulation S-P, the Fair Credit Reporting Act of 1970, as amended, and Regulation S-ID, as well as the California Consumer Protection Act and further potential federal and state requirements.

Human Capital

Our success depends on our ability to attract, hire, retain and develop highly-skilled professionals in a variety of specialties, including finance, technology, compliance, business development,

cybersecurity and management.

Our success depends on our ability to attract, hire, retain and develop highly skilled professionals in a variety of specialties, including finance, technology, compliance, business development, cybersecurity and management.

Due to the complexity of our business, we compete for talent with other companies, both inside and outside of our industry, and in multiple geographical areas in the U.S.

Our human capital efforts focus on establishing a culture of service that emphasizes taking care of our employees, so they can take care of our clients.

To that end, we seek employees who are

approachable, proactive, collaborative, agile and innovative, and who share our commitment to excellence, integrity and service.

To that end, we seek employees who are approachable, proactive, collaborative, agile and innovative, and who share our commitment to excellence, integrity, and service.

As of March 14, 2022, we had 125 employees, one of whom was a corporate officer.

None of our employees are represented by

a union, and we believe that relations with our employees are good.

To maintain a high-caliber, values-driven workforce that is committed to our culture, we strive to offer total rewards, including compensation and benefits that position our company as an employer of

None of our employees are represented by a union, and we believe that relations with our employees are good.

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To maintain a high-caliber, values-driven workforce that is committed to our culture, we strive to offer total rewards, including compensation and benefits that position our company as an employer of choice.

We design our compensation to be competitive in the markets in which we compete, and closely monitor industry trends and practices to ensure we are able to attract and retain the personnel who are critical to our success.

To support our

employees’ health and well-being, we offer competitive medical, dental and vision plans as well as other health benefits.

We believe in our employees’ potential and provide training and development opportunities intended to maximize their performance and professional growth.

We require all of our employees to complete

courses in key regulatory areas, such as insider trading and anti-money laundering compliance.

To support our employees’

health and well-being, we offer competitive medical, dental and vision plans as well as other health benefits.

We believe in our employees’

potential and provide training and development opportunities intended to maximize their performance and professional growth.

We require all of our employees to complete courses in key regulatory areas, such as insider trading and anti-money laundering compliance.

We aim to provide a safe, inclusive environment for our employees, where they feel engaged in our business, supported in who they are and empowered to succeed.

We are committed to providing a

workplace that is free from violence, harassment and other unsafe or disruptive conditions, and require our personnel to attend regular training sessions and workshops on those topics.

To promote safety

during the COVID-19 pandemic, w e have taken numerous steps to ensure that our employees and customers are operating in a safe environment by implementing measures such as social

distancing, sanitizing workstations, temperature checks, requiring masks, and alternating staff.

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We are committed to providing a workplace that is free from violence, harassment and other unsafe or disruptive conditions, and require our personnel to attend regular training sessions and workshops on those topics.

In response to the COVID-19 pandemic and for the protection of our employees, clients and business partners, we implemented remote work arrangements for nearly 100% of our employees, restricted business travel and temporarily closed some of our branch offices.

As of the date of this Report we have reopened all of our branch offices.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business