Siebert Financial (SIEB) risk factors, FY2024 10-K

Regulatory Risks

1. 01Legislation 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
2. 02We are subject to extensive government regulation and to third party litigation risk and regulatory risk which could result in significant liabilities and reputational harm which, in turn, could materially adversely affect our business, results of operations and financial condition
3. 03We are subject to net capital requirements

Risks Related to Our Technology and Information Systems

1. 04We rely on information processing and communications systems to process and record our transactions
2. 05We rely on third-party platforms for information and communications systems
3. 06Failure to protect client data or prevent breaches of our information systems could expose us to liability or reputational damage
4. 07We may be exposed to damage to our business or our reputation by cybersecurity breaches
5. 08An increase in volume on our systems or other events could cause them to malfunction
6. 09Rapid market or technological changes may render our technology obsolete or decrease the attractiveness of our products and services to our clients

Risks Related to Our Business Operations

1. 10We previously identified material weaknesses in our internal control over financial reporting and if we fail to maintain an effective system of internal control in the future, this could result in loss of investor confidence and adversely impact our stock price
2. 11Potential strategic acquisitions and other business growth could increase costs and regulatory and integration risks
3. 12We do not own the Muriel Siebert and Siebert names, but we may use them as part of our corporate name pursuant to a license agreement. Use of the names by other parties or the expiration or termination of our license agreement may harm our business
4. 13Our customers may fail to pay us
5. 14Our advisory services subject us to additional risks
6. 15Certain employees, directors and affiliates of RISE and Siebert own equity in RISE Financial Services, LLC

Risks Related to Our Common Stock

1. 16There may be a limited public market for our common stock; Volatility
2. 17Our principal shareholder has significant influence over us
3. 18Future 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
4. 19Since 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. The average daily trading volume from January 1, 2024 to December 31, 2024 was approximately 24,327 shares
5. 20Our 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

Risks Related to Our Industry and Market

1. 21Securities market volatility and other securities industry risk could adversely affect our business
2. 22Interest rate changes could affect our profitability
3. 23A prolonged economic slowdown, volatility in the markets, a recession, and uncertainty in the markets could impair our business and harm our operating results
4. 24There is intense competition in the brokerage industry
5. 25Lower price levels in the securities markets may reduce our profitability
6. 26The soundness of other financial institutions and intermediaries affects us