1 unchanged sentence
Legislation has and may continue to result in changes to rules and regulations applicable to our business, which may negatively impact our business and financial results.
−Removed: New laws, rules, regulations and guidance, or changes in the interpretation and enforcement of existing federal, state, foreign and self-regulatory organization ("SRO") laws, rules, regulations and guidance may directly affect our business and the profitability of Siebert or the operation of specific business lines.
+Added: New laws, rules, regulations and guidance, or changes in the interpretation and enforcement of existing federal, state, foreign and SRO laws, rules, regulations and guidance may directly affect our business and the profitability of Siebert or the operation of specific business lines.
In addition, new and changing laws, rules, regulation and guidance could result in limitations on the lines of business we conduct, modifications to our business practices, more stringent capital and liquidity requirements or other costs and could limit our ability to return capital to stockholders.
−Removed: The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), enacted in 2010, required many federal agencies to adopt new rules and regulations applicable to the financial services industry and called for many studies regarding various industry practices.
+Added: The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), enacted in 2010, required many federal agencies to adopt new rules and regulations applicable to the financial services industry and called for many studies regarding various industry practices.
In particular, the Dodd-Frank Act gave the SEC discretion to adopt rules regarding standards of conduct for broker-dealers providing investment advice to retail customers.
−Removed: The rules and interpretations adopted by the SEC in June 2019 include Regulation Best Interest and the new Form CRS Relationship Summary, which are intended to enhance the quality and transparency of retail investors'
−Removed: relationships with broker-dealers and investment advisers.
+Added: The rules and interpretations adopted by the SEC in June 2019 include Regulation Best Interest and the new Form CRS Relationship Summary, which are intended to enhance the quality and transparency of retail investors' relationships with broker-dealers and investment advisers.
Regulation Best Interest enhances the broker-dealer standard of conduct beyond existing suitability obligations, requiring compliance with disclosure, care, conflict of interest and compliance obligations.
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Our business is subject to extensive regulation in the U.S., at both the federal and state level.
−Removed: We are also subject to regulation by SROs and other regulatory bodies in the U.S., such as the SEC, the NYSE, FINRA, MSRB, the Commodity Futures Trading Commission (“CFTC”) and the National Futures Association (“NFA”).
+Added: We are also subject to regulation by SROs and other regulatory bodies in the U.S., such as the SEC, the NYSE, FINRA, MSRB, the Commodity Futures Trading Commission (“CFTC”) and the NFA.
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.
−Removed: The regulations to which MSCO and RISE are subject as broker-dealers cover all aspects of the securities business including training of personnel, sales methods, trading practices, uses and safe keeping of customers’
−Removed: funds and securities, capital structure, record keeping, fee arrangements, disclosure and the conduct of directors, officers and employees.
+Added: The regulations to which MSCO and RISE are subject as broker-dealers 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.
SNXT is registered as an investment adviser with the SEC under the Advisers Act, and its business is highly regulated.
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Moreover, the Advisers Act grants broad administrative powers to regulatory agencies such as the SEC to regulate investment advisory businesses.
−Removed: If the SEC or other government agencies believe that SNXT has failed to comply with applicable laws or regulations, these agencies have the power to impose fines, suspensions of a registrant and individual employees or other sanctions, which could include revocation of SNXT’s registration under the Advisers Act.
−Removed: SNXT is also subject to the provisions and regulations of ERISA, to the extent that SNXT acts as a “fiduciary”
−Removed: under ERISA with respect to certain of its clients.
+Added: If the SEC or other government agencies believe that SNXT has failed to comply with applicable laws or regulations, these agencies have the power to impose fines, suspensions of a registrant and individual employees or other sanctions, which could include revocation of SNXT’s registration under the Advisers Act.
+Added: SNXT is also subject to the provisions and regulations of ERISA, to the extent that SNXT acts as a “fiduciary” under ERISA with respect to certain of its clients.
ERISA and the applicable provisions of the federal tax laws impose a number of duties on persons who are fiduciaries under ERISA and prohibit certain transactions involving the assets of each ERISA plan which is a client, as well as certain transactions by the fiduciaries (and certain other related parties) to such plans.
−Removed: Our subsidiaries, RISE and MSCO, are also regulated by the National Futures Association (“NFA”) and function as a registered introducing broker.
−Removed: Siebert 2021 Form-10K 10
+Added: Our subsidiaries, RISE and MSCO, are also regulated by the National Futures Association (“NFA”) and function as a registered introducing broker.
+Added: Siebert 2022 Form-10K 10
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.
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Further, adverse proceedings could have an adverse effect on our ability to retain key registered representatives, investment advisers and wealth managers, and to retain existing clients or attract new clients, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: Refer to Item 3 –
−Removed: Legal Proceedings for additional detail.
+Added: Refer to Item 3 – Legal Proceedings for additional detail.
We are subject to net capital requirements.
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have rules with respect to net capital requirements which affect us.
−Removed: These rules have the effect of requiring that at least a substantial portion of a broker-dealer’s assets be kept in cash or highly liquid investments.
+Added: These rules have the effect of requiring that at least a substantial portion of a broker-dealer’s assets be kept in cash or highly liquid investments.
Our compliance with the net capital requirements could limit operations that require intensive use of capital, such as underwriting or trading activities.
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We rely heavily on our data technology platforms and the platforms provided by our clearing agents.
−Removed: These platforms offer interfaces to our clearing service providers’
−Removed: computing systems where customer account records are kept and are accessible through our data technology platforms.
+Added: These platforms offer interfaces to our clearing service providers’ computing systems where customer account records are kept and are accessible through our data technology platforms.
Our systems also utilize browser-based access and other types of data communications.
−Removed: Our data technology platforms offers services used in direct relation to customer activities as well as support for corporate use.
+Added: Siebert 2022 Form-10K 11
+Added: Our data technology platforms offer 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.
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In addition, our liability insurance might not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches.
−Removed: Siebert 2021 Form-10K 11
+Added: Siebert 2022 Form-10K 12
We may be exposed to damage to our business or our reputation by cybersecurity breaches.
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Increasingly, intruders attempt to steal significant amounts of data, including personally identifiable data and either hold such data for ransom or release it onto the internet, exposing our clients to financial or other harm and thereby significantly increasing our liability in such cases.
−Removed: Our regulators have introduced programs to review our protections against such incidents which, if they determined that our systems do not reasonably protect our clients’
−Removed: assets and their data, could result in enforcement activity and sanctions.
+Added: Our regulators have introduced programs to review our protections against such incidents which, if they determined that our systems do not reasonably protect our clients’ assets and their data, could result in enforcement activity and sanctions.
We have and continue to introduce systems and software to prevent any such incidents and review and increase our defenses to such issues through the use of various services, programs and outside vendors.
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We must continue to enhance and improve our technology and electronic services.
−Removed: The electronic financial services industry is characterized by significant structural changes, increasingly complex systems and infrastructures, changes in clients’
−Removed: needs and preferences, and new business models.
+Added: The electronic financial services industry is characterized by significant structural changes, increasingly complex systems and infrastructures, changes in clients’ needs and preferences, and new business models.
If new industry standards and practices emerge and our competitors release new technology before us, our existing technology, systems and electronic trading services may become obsolete or our existing business may be harmed.
−Removed: Siebert 2021 Form-10K 12
+Added: Siebert 2022 Form-10K 13
Our future success will depend on our ability to:
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Failure to achieve expected synergies;
−Removed: Diversion of management’s attention from other business concerns;
+Added: Diversion of management’s attention from other business concerns;
Assumption of unknown material liabilities of acquired companies;
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As part of our growth strategy, we regularly consider and from time to time engage in discussions and negotiations regarding transactions such as acquisitions, mergers, combinations and partnerships within our industry.
−Removed: The purchase price for possible acquisitions could be paid in cash, through the issuance of Common Stock or other securities, borrowings or a combination of these methods.
+Added: The purchase price for possible acquisitions could be paid in cash, through the issuance of our common stock or other securities, borrowings or a combination of these methods.
Our transactions are typically subject to closing conditions including regulatory approvals and the absence of material adverse changes in the business, operations or financial condition of the entity or part of an entity being acquired or sold.
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These risks could cause the failure of any anticipated benefits of an acquisition to be realized, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: In addition, management is assessing the future strategic direction of RISE, taking into consideration current market conditions, demand trends, and resources.
+Added: While we believe our expertise and industry relationships will enable us to execute a new strategic direction, our business plan for RISE is untested, and it is uncertain whether our efforts will attract the customers and revenue necessary to compete in the market.
We may be unable to realize the anticipated benefits of our cost cutting efforts or it may take longer than anticipated for us to realize any benefits from increased cost efficiencies or economies of scale, if at all.
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These effects include, but are not limited to, incurring unexpected costs or delays in connection with implementation of a modified business model, or the failure of our business to perform as expected, which could harm our results of operations.
−Removed: Siebert 2021 Form-10K 13
+Added: Siebert 2022 Form-10K 14
We depend on our ability to attract and retain key personnel.
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This amount represented, as of the date of this Report, an aggregate of 7% of the total issued and outstanding membership interests in RISE.
−Removed: As of the date of this Report, Tigress owns approximately 22% of RISE.
−Removed: Cynthia DiBartolo is the founder and majority owner of Tigress, as well as the Chief Executive Officer of RISE and a director of Siebert.
+Added: As of the date of this Report, Gloria E.
+Added: Gebbia owns approximately 25% of RISE.
As a result, the interests of the employees, directors, and affiliates of RISE and Siebert who own equity in RISE may differ from the interests of shareholders of Siebert.
−Removed: Risks Related to COVID-19
−Removed: The continuation of the COVID-19 pandemic could adversely affect our business, financial condition, liquidity and results of operations.
−Removed: The COVID-19 outbreak has caused significant volatility and disruption in the financial markets both globally and in the U.S.
−Removed: If COVID-19, or another highly infectious or contagious disease, continues to spread or the response to contain it is unsuccessful, we could experience material adverse effects on our business, financial condition, liquidity, and results of operations.
−Removed: The extent of such effects will depend on future developments which are highly uncertain and cannot be predicted, including the geographic spread of the virus, the overall severity of the disease, the duration of the outbreak, the measures that may be taken by various governmental authorities in response to the outbreak (such as quarantines and travel restrictions) and the possible further impacts on the global economy.
−Removed: The continued spread of COVID-19 could also negatively impact the availability of key personnel necessary to conduct our business.
−Removed: Certain actions taken by U.S.
−Removed: or other governmental authorities, including the Federal Reserve, to reduce interest rates may adversely affect our results of operations.
−Removed: During the first quarter of 2020, the Federal Reserve cut the federal funds target overnight rate twice for a total of 150 basis points to near zero.
−Removed: These developments have had, and may continue to have, a negative impact on our revenue from interest, marketing and distribution fees.
−Removed: Investor behavior may fundamentally change as a result of COVID-19 in both the near and long term which could have an adverse effect on our operations.
−Removed: We cannot foresee whether the outbreak of COVID-19 will be effectively contained, nor can we predict the severity and duration of its impact.
−Removed: As such, impacts of COVID-19 to our business are highly uncertain and we will continue to assess the impact as the situation develops.
−Removed: The disruptions to the U.S.
−Removed: and global economies and financial markets may cause investors to be more cautious and to limit their investments.
−Removed: Trading of securities may be materially and adversely affected with more investors seeking stability.
−Removed: Investment activity may also be negatively impacted by general macroeconomic conditions and consumer confidence, including the impacts of job losses and any recession, resulting from the COVID-19 pandemic.
−Removed: Clients holding savings with us in retirement or investment accounts may be required to liquidate some or all of their savings to pay living expenses.
−Removed: All of these factors could materially and adversely impact our revenue streams.
−Removed: Siebert 2021 Form-10K 14
Risks Related to Our Common Stock
There may be a limited public market for our common stock;
−Removed: 11,635,458 shares of Common Stock, or approximately 36% of our shares of Common Stock outstanding, are currently held by non-affiliates as of March 14, 2022.
−Removed: A stock with a small number of shares held by non-affiliates, known as the “float,”
−Removed: will generally be more volatile than a stock with a large float.
+Added: 13,198,585 shares of our common stock, or approximately 41% of our shares of our common stock outstanding, are currently held by non-affiliates as of March 20, 2023.
+Added: A stock with a small number of shares held by non-affiliates, known as the “float,” will generally be more volatile than a stock with a large float.
Although our common stock is traded on the Nasdaq Capital Market, there can be no assurance that an active public market will continue.
Our principal shareholder has the ability to control key decisions submitted to a vote of our shareholders.
−Removed: Gebbia, who is a director of Siebert and the managing member of Kennedy Cabot Acquisition, LLC (“KCA”), has, along with other family members, 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.
+Added: Gebbia, who is a director of Siebert and the managing member of Kennedy Cabot Acquisition, LLC (“KCA”), has, along with other family members, 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.
+Added: Siebert 2022 Form-10K 15
Future sales of our common stock in the public market could cause the market price of our common stock to drop significantly, even if our business is doing well.
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Since our common stock started trading on the Nasdaq Capital Market, our common stock has been relatively thinly traded and at times been subject to price volatility.
−Removed: From January 1, 2021 to January 28, 2021, the average close price of our Common Stock was $3.94 per share.
−Removed: On January 29, 2021, the price increased to a high of $18.50 per share and approximately 34 million shares were traded.
−Removed: From February 1, 2021 to February 28, 2021, the average close price was $5.60 per share.
−Removed: The average daily trading volume from March 1, 2021 to March 1, 2022 was approximately 271,000 shares.
−Removed: We believe that the trading price of our Common Stock has at times been influenced by trading factors other than industry or Company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be expressed on financial trading and other social media sites), speculation in the press, in the investment community, or on the internet, including on online forums and social media, about Siebert, our industry or our security’s access to margin debt, trading in options and other derivatives on our Common Stock, and the amount and status of short interest in our securities (including a “short squeeze”).
−Removed: A “short squeeze”
−Removed: is a technical market condition that occurs when the price of a stock increases substantially, forcing market participants who had taken a position that its price would fall (i.e., who had sold the stock “short”), to buy it, which in turn may create significant, short-term demand for the stock not for fundamental reasons, but rather due to the need for such market participants to acquire the stock in order to forestall the risk of even greater losses.
−Removed: A “short squeeze”
−Removed: condition in the market for a stock can lead to short-term conditions involving very high volatility and trading that may or may not track fundamental valuation models.
+Added: The average daily trading volume from January 1, 2022 to December 31, 2022 was approximately 25,010 shares.
+Added: We believe that the trading price of our common stock has at times been influenced by trading factors other than industry or Company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be expressed on financial trading and other social media sites), speculation in the press, in the investment community, or on the internet, including on online forums and social media, about Siebert, our industry or our security’s access to margin debt, trading in options and other derivatives on our common stock, and the amount and status of short interest in our securities (including a “short squeeze”).
+Added: A “short squeeze” is a technical market condition that occurs when the price of a stock increases substantially, forcing market participants who had taken a position that its price would fall (i.e., who had sold the stock “short”), to buy it, which in turn may create significant, short-term demand for the stock not for fundamental reasons, but rather due to the need for such market participants to acquire the stock in order to forestall the risk of even greater losses.
+Added: A “short squeeze” condition in the market for a stock can lead to short-term conditions involving very high volatility and trading that may or may not track fundamental valuation models.
As a result of the foregoing, investors in our common stock may be subject to the risk of significant, short-term price volatility of our common stock and the trading price of our common stock could decline for reasons unrelated to our business, financial condition, or results of operations.
−Removed: Further, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies.
+Added: Further, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.
−Removed: Siebert 2021 Form-10K 15
+Added: Siebert 2022 Form-10K 16
Our future ability to pay dividends to holders of our common stock is subject to the discretion of our Board of Directors and will be limited by our ability to generate sufficient earnings and cash flows.
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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.
+Added: Interest rate changes could affect our profitability.
+Added: The direction and level of interest rates are important factors in our earnings.
+Added: Our earnings are affected by the difference between the interest rates earned on interest-earning assets such as loans and investment securities and interest rates paid on interest-bearing liabilities such as deposits and borrowings.
+Added: Increases in interest rates positively impact our revenue from margin and other interest income, and distribution fees received from money market securities.
+Added: economy recovers, aided by stimulus packages and fiscal and monetary policies, inflation has been rising at historically high rates, and the Federal Reserve has signaled that it will continue increasing the target federal funds effective rate.
+Added: Although we believe we may benefit from a rising interest rate environment, a rise in interest rates may cause our funding costs to increase if market conditions or the competitive environment induces us to raise our interest rates to avoid losing deposits, or replace deposits with higher cost funding sources without offsetting increases in yields on interest-earning assets which can reduce our interest revenue.
+Added: Siebert 2022 Form-10K 17
A prolonged economic slowdown, volatility in the markets, a recession, and uncertainty in the markets could impair our business and harm our operating results.
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financial markets remain vulnerable to the potential risks posed by exogenous shocks, which could include, among other things, political and financial uncertainty in the U.S.
−Removed: and the European Union, renewed concern about China’s economy, conflict with Russia and Ukraine, complications involving terrorism and armed conflicts around the world, or other challenges to global trade or travel, such as might occur in the event of a wider pandemic involving COVID-19.
+Added: and the European Union, renewed concern about China’s economy, conflict with Russia and Ukraine, complications involving terrorism and armed conflicts around the world, or other challenges to global trade or travel, such as might occur in the event of a wider pandemic involving COVID-19.
More generally, because our business is closely correlated to the macroeconomic outlook, a significant deterioration in that outlook or an exogenous shock would likely have an immediate negative impact on our overall results of operations.
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We may not be able to compete effectively with current or future competitors with stronger capital position, greater name recognition or who partner or combine with other larger firms.
−Removed: Siebert 2021 Form-10K 16
+Added: Siebert 2022 Form-10K 18
Some competitors in the discount brokerage business offer services which we may not offer.
11 unchanged sentences
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.