COMMITMENTS, CONTINGENCIES AND OTHER

12 Months Ended

Dec. 31, 2015

COMMITMENTS, CONTINGENCIES AND OTHER

(1) Retail customer transactions are cleared through clearing brokers on a fully disclosed basis. If customers do not fulfill their contractual obligations, the clearing broker may charge Siebert for any loss incurred in connection with the purchase or sale of securities at prevailing market prices to satisfy the customer obligations. Siebert regularly monitors the activity in its customer accounts for compliance with its margin requirements. Siebert is exposed to the risk of loss on unsettled customer transactions if customers are unable to fulfill their contractual obligations. There were no material losses for unsettled customer transactions in 2015, 2014 or 2013. Credit risk represents the potential loss that would occur if counterparties fail to perform pursuant to the terms of their obligations. The Company is subject to credit risk to the extent a custodian or broker with whom it conducts business is unable to fulfill contractual obligations.

(2) In the ordinary course of business the Company is named a party to certain claims, suits and complaints. In the opinion of management, pending matters are without merit, and their ultimate outcome not have a significant effect on the financial position or results of operations of the Company.

(3) In July 2014, the Company entered into a settlement agreement in regards to a dispute with a former employee, in which the former employee sought, among other things, damages arising from his separation from the Company. The Company asserted counter claims in the arbitration. Pursuant to the settlement, the Company paid $4,300,000 to the former employee, and the claims and counterclaims have been dismissed and released. The accompanying 2014 statement of operations reflects a charge to give effect to the settlement.

(4) The Company rents discount retail brokerage and other office space under long-term operating leases expiring in various periods through 2017. These leases call for base rent plus escalations for taxes and operating expenses.

Future minimum base rental payments under these operating leases are as follows:   

Year Ending December 31,		Amount
	2016		541,000
	2017		90,000
		$	631,000

Rent expense, including escalations for operating costs, amounted to approximately $776,000, $788,000 and $1,046,000 for the years ended December 31, 2015, 2014 and 2013, respectively. Rent is being charged to expense over the entire lease term on a straight-line basis.

(5) Siebert sponsors a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code that covers substantially all employees. Participant contributions to the plan are voluntary and are subject to certain limitations. Siebert may also make discretionary contributions to the plan. No contributions were made by Siebert in 2015, 2014 and 2013.

(6) Siebert was party to a Secured Demand Note Collateral Agreement with SBS which obligated Siebert to lend SBS, on a subordinated basis, up to $1,200,000. The secured demand note payable held by SBS and a related $1,200,000 receivable due from SBS are included in investments in and advances to former affiliate in the accompanying consolidated statement of financial condition of December 31, 2014. Amounts that Siebert was obligated to lend under this arrangement was collateralized by cash equivalents of $1,532,000. Any amounts loaned bore interest at 4% per annum. On August 31, 2015, the facility expired and was not renewed and the collateral was released from restricted cash.

Siebert, Brandford, Shank Financial LLC and Subsidiary

COMMITMENTS, CONTINGENCIES AND OTHER

SBS rents office space under long-term operating leases expiring through 2026. These leases call for base rent plus escalations for property taxes and other operating expenses.

SBSF rents office space under long-term operating leases expiring through 2020. These leases call for base rent plus escalations for property taxes and other operating expenses. Future minimum base rent under these operating leases as of December 31, 2014 are as follows:

December 31, 2014		Amount
2015	$	$1,043,000
2016		886,000
2017		639,000
2018		627,000
2019		587,000
Thereafter		185,000
	$	$3,967,000

Rent expense, including taxes and operating expenses for 2015, 2014 and 2013 amounted to $1,055,944, $1,186,967 and $1,088,755, respectively.

In prior years, SBS purchased leasehold improvements of approximately $620,000 which were reimbursed by the landlord. SBS recorded such reimbursement as a credit to deferred rent liability, which is being recognized as a reduction of rental expense on a straight-line basis over the term of the lease.

Rent expense is being charged to operations on a straight-line basis resulting in a deferred rent liability which, including the reimbursement discussed above amounted to $549,287 at December 31, 2014.