DEF 14A: Siebert Financial Corp. Announces Annual Meeting of Shareholders, Director Elections, and Auditor Ratification

Siebert Financial Corp. will hold its Annual Meeting of Shareholders on November 1, 2024, to elect directors and ratify the appointment of Crowe LLP as its independent registered public accounting firm.

Summary

• Siebert Financial Corp. will hold its Annual Meeting of Shareholders on November 1, 2024.
• The meeting will be completely virtual and conducted live via webcast.
• Shareholders of record as of September 6, 2024, are eligible to vote.
• The agenda includes the election of seven directors, ratification of the appointment of Crowe LLP as the independent registered public accounting firm for fiscal 2024, and consideration of any other matters properly presented.
• Proxy materials are expected to be mailed or available to shareholders around September 20, 2024.
• The Board of Directors is soliciting proxies and encourages shareholders to vote by Internet, telephone, or mail.
• The company had 40,120,936 shares of common stock outstanding and entitled to vote as of the record date.
• Members of the Gebbia family beneficially own 16,960,323 of those shares.

Sentiment

Score: 6

Explanation: The document is primarily factual and procedural, with a neutral tone. The resignation of the auditor and the material weakness are negative points, but the overall sentiment is balanced by the routine nature of the annual meeting and director elections.

Positives

• The company is providing a virtual meeting option for shareholders.
• The company has a compensation recovery (clawback) policy in place.
• The company has a Code of Ethics for Senior Financial Officers.
• The Audit Committee is comprised of independent directors.
• The Board of Directors is actively involved in risk oversight.

Negatives

• Baker Tilly resigned as the independent registered public accounting firm on May 13, 2024.
• A material weakness related to user access controls was previously reported in the Form 10-K for the year ended December 31, 2023.
• Some directors, executive officers, and other insiders adopted Rule 10b5-1 trading arrangements for the potential sale of up to 2,065,000 shares of common stock.
• Richard Gebbia's Form 4 was filed two days late due to an inadvertent mistake.
• Hocheol Shin's Form 3 was filed thirteen days late due to an inadvertent mistake.

Risks

• The company faces risks related to securities market volatility, intense competition, government regulation, and net capital requirements.
• The company relies on information processing and communications systems, which could malfunction.
• The company depends on its ability to attract and retain key personnel.
• The principal shareholder's ability to control key decisions poses a risk.
• There may be no public market for the company's common stock.

Future Outlook

The Board of Directors intends to hold at least four regular meetings each year to consider and address matters involving the Company.

Management Comments

• The Board of Directors believes that all of the directors will continue to participate in the full range of the Board of Directors responsibilities with respect to its oversight of the Company's management.
• The members of the Audit Committee and the Board of Directors believe that the retention of Crowe to serve as our independent registered public accounting firm is in the best interests of the Company and its shareholders.

Industry Context

The document provides insight into the corporate governance practices, executive compensation, and related party transactions within a publicly traded financial services firm, which is relevant for understanding industry standards and regulatory compliance.

Comparison to Industry Standards

• The director independence standards align with Nasdaq Listing Rules, ensuring a majority of independent directors.
• The Audit Committee's responsibilities are consistent with best practices for financial oversight.
• The executive compensation program aims to align executive interests with shareholder returns, a common practice in the financial industry.
• The company's risk oversight process is similar to other financial institutions, with regular reports from senior management and reviews by the Board of Directors.
• The adoption of a compensation recovery (clawback) policy is in line with Nasdaq rules and regulatory requirements.

Corporate Governance

Related Party Transactions

• KCA served as a paymaster for the Company for payroll and related functions, with expenses of $0 and $40,000 for the six months ended June 30, 2024 and the year ended December 31, 2023, respectively.
• KCA passed through to the Company its cost of $30,000 and $60,000 for the use of the names Muriel Siebert & Co., Inc. and Siebert for the six months ended June 30, 2024 and the year ended December 31, 2023, respectively.
• PW brokered insurance policies for related parties, with revenue of $49,000 and $124,000 for the six months ended June 30, 2024 and the year ended December 31, 2023, respectively.
• The three sons of Gloria E. Gebbia and John J. Gebbia hold executive positions within the Company's subsidiaries, with compensation in aggregate of $1,539,000 and $2,776,000 for the six months ended June 30, 2024 and the year ended December 31, 2023, respectively.
• The Company operates on a five-year lease agreement for its branch office in Omaha, Nebraska with the Gebbia Sullivan County Land Trust, with rent expense of $30,000 and $60,000 for the six months ended June 30, 2024 and the year ended December 31, 2023, respectively.
• The Company acquired all of the outstanding equity of Gebbia Entertainment from the John J. and Gloria E. Gebbia Family Trust (99%) and David Gebbia (1%) for a purchase price of $1,250,000.
• On April 27, 2023, the Company entered into the First Tranche Stock Purchase Agreement, pursuant to which the Company agreed to issue to Kakaopay the First Tranche Shares at a per share price of Two Dollars Fifteen Cents ($2.15).
• On July 10, 2023, the Company entered into a Share Redemption Agreement with Cynthia DiBartolo, CEO of Tigress, pursuant to which the Company repurchased from Ms. DiBartolo one million shares of its common stock held by Ms. DiBartolo in exchange for conveying to Ms. DiBartolo the Company’s 17% interest in Tigress.

Stakeholder Impact

• Shareholders have the opportunity to vote on key corporate governance matters.
• Employees are affected by the company's compensation policies and risk management practices.
• Customers may be impacted by the company's financial performance and service offerings.
• The company's relationships with suppliers and creditors could be influenced by its financial stability and regulatory compliance.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its Annual Meeting of Shareholders on November 1, 2024.
• The Nominating Committee will evaluate nominees to the Board of Directors.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Directors, Shareholders, Corporate Governance, Auditor Ratification, Executive Compensation, Related Party Transactions, Siebert Financial Corp., Crowe LLP