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DETAILED RESPONSE TO LEVIN & WEISER SHAREHOLDER LETTER


     Many  of our  shareholders  recently  received  a  letter  from a law  firm
representing two former registered  representatives of Montauk Financial who are
seeking to discredit the management and Board of Directors of the firm and seize
control. For the record, we would like to provide you with our response to these
often false and misleading accusations.

     Some context and  background  information is crucial in  understanding  the
reasons for this negative letter and its proponents. In 2002 and 2003, we raised
$3.1  million  through the  issuance of  convertible  debentures  to  accredited
investors   which  were  sold  through  First  Montauk   Securities   Corp.  our
broker/dealer   subsidiary.   Of  the  many   registered   representatives   who
participated in these offerings,  about half of the total raised was sold by two
registered representatives,  Shlomo Eplboim and Michael Poutre of Eplboim Poutre
& Co. ("Eplboim  Poutre") who are no longer with First Montauk.  Levin & Weiser,
the  Colorado  law firm that sent the  shareholders  letter  represents  Eplboim
Poutre. These two former registered  representatives have approached  management
on behalf of a group of their  clients  in an  attempt  to buy the firm and take
control.  We believe  that the actions of Eplboim  Poutre and  possibly  some of
their clients are inconsistent with their legal obligations under the securities
laws, and, as previously  stated,  we have notified the  appropriate  regulatory
authorities and requested their intervention.  In addition,  Mr. Eplboim and Mr.
Poutre each has outstanding loans to Montauk Financial Group that together total
over $100,000 which we are pursuing in the appropriate legal forum.

     Levin & Weiser first  communicated  with our debenture  holders in February
2005 under the guise of  representing  "a group of  investors  with  holdings in
First Montauk Financial Corp.". When directly confronted by our management, this
law firm finally  admitted that they did not represent any shareholders of First
Montauk Financial, but rather the two former registered representatives who were
asked to leave the firm in August 2004 and subsequently were permitted to resign
from their next broker/dealer, J.P. Turner & Company because of their failure to
follow internal corporate  procedures.  They are now affiliated with their third
brokerage  firm  in  less  than  one  year.  We ask  that  when  evaluating  the
credibility of the  information  in the letter,  you consider the source and the
ulterior motives of the individuals behind the communication.

     Furthermore,  you may be aware that a corporate entity named BMAC Corp. has
filed a Form13d with the SEC. A Form 13d is filed by persons who have become the
owners of 5% or more of a public company's shares.  In its filing,  BMAC stated,
among  other  things,  that it  intended  to seek  management  changes  at First
Montauk.  It is our  position  that  BMAC did not  properly  disclose  the other
members of its group,  as required by law,  and the  transactions  by which they
have   accumulated   stock.   Further,   we  have  been  provided  with  written
documentation that Eplboim Poutre represents BMAC Corp as financial advisor.

Use Of The Offering Proceeds And Management Of Corporate Funds

     The proceeds of the two debenture  offerings were used for general  working
capital  of the  company,  as stated in each  offering  memorandum.  The  letter
attempts to directly  tie the  proceeds of the  offering to changes in executive
compensation  when,  in fact there is no  correlation.  The changes in executive
compensation were related to the appointment of Mr. Kurylak as the new president
and chief  operating  officer,  and new roles for Herbert  Kurinsky  and William
Kurinsky.  In fact our company has been  profitable  since the conclusion of the
last  offering,  the funds  that were  raised in the  offerings  have  served to
substantially  increase  our capital  base and are  available to be used for the
growth and development of the company. The writer's attempt to link these events
is self serving and inaccurate.

Executive Compensation Was Fair And Reasonable

     Conspicuously absent from the discussion of executive compensation, was any
mention  of the salary  that both  Herbert  Kurinsky  and  William  J.  Kurinsky
voluntarily  relinquished and to which they were entitled under their employment
agreements  during 2001, 2002 and 2003. That amount totaled over $415,000.  They
voluntarily  reduced  their  contracted   compensation  in  recognition  of  the
difficulties facing the company during this period.

     The amount of executive compensation increased for 2004 because it included
the salary for Victor K.  Kurylak  who joined the firm as  President  and COO in
January 1, 2004.  Although the letter  implies that $750,000 was paid to Messrs.
Herbert  and  William  Kurinsky,   the  amount  noted  in  the  letter  included
compensation  for Mr. Kurylak as the new president and chief operating  officer.
Here again these  parties are  attempting  to mislead you into thinking that the
$750,000 salary was paid solely to Herbert Kurinsky and William Kurinsky when in
fact that is not the case.




     The  bonus  awarded  to  Herbert   Kurinsky  by  the  board's   independent
compensation  committee was based upon his  relinquishing  his role of President
and CEO,  receiving a reduction in his  contracted  salary and a shorter term of
employment.  In  exchange  for  these  concessions,  the board  awarded  Herbert
Kurinsky a bonus that was to be used  exclusively for the repayment of loans and
payment of taxes owed on the bonus. The loan was repaid  simultaneously with the
grant of the bonus,  providing  little cash  benefit to Herbert  Kurinsky  and a
manageable  cash cost to the company.  Contrary to the assertions in the letter,
no debt was  forgiven and all  outstanding  loans were repaid as of December 31,
2003.

     The  bonus  awarded  to  William  Kurinsky,   by  the  board's  independent
compensation committee, was based upon his promotion to the position of CEO. His
bonus  amount  was also used to pay off a loan and  payment of the taxes owed on
the  bonus.  The loan was  repaid  simultaneously  with the grant of the  bonus,
providing  little cash benefit to William Kurinsky and a manageable cash cost to
the company.  Contrary to the assertions in the letter, no debt was forgiven and
all outstanding loans were repaid as of December 31, 2003.

     The paragraph also contains a statement that "expenses for  commissions and
employee compensation accounted for $46.2 million, which is equal to roughly 79%
of First  Montauk's  gross revenues for 2003" and that this is an  "unacceptable
figure in the financial  services  industry".  To make such a statement  without
providing statistical data is both misleading and negligent. The language in the
letter appears to reflect a total lack of  understanding  of our business.  What
the letter fails to explain is that the compensation includes commission expense
for all registered representatives. The independent firm model, such as Montauk,
inherently  has  a  much  higher  payout  structure  (in  which  Eplboim  Poutre
participated)  than  traditional wire house firms, and as such, will have a much
higher  percentage  of revenues  attributable  to  commissions  paid to reps. We
believe that this fundamental lack of understanding of our business reflected in
the letter, or at best, the utter lack of respect for the truth, should give you
great pause in trusting these  individuals with your company.  Again, we believe
that  their  sole  purpose is to create  anxiety  in the  marketplace  and cause
shareholders to sell their stock to them so they can take over the company.

Merger With Olympic Cascade

     The group who has sent the letter is apparently seeking to block the merger
with Olympic Cascade,  not because the transaction is bad for the company or its
shareholders,  but because it  interferes  with the groups  stated  objective of
taking  control of the  company.  National  Securities,  Olympics  broker-dealer
subsidiary, like First Montauk and all brokerage firms, is subject to regulatory
sanctions  when it runs afoul of the  regulations.  The  delisting  of Olympic's
stock from the American Stock Exchange had nothing to do with any  broker-dealer
net capital issues.  Rather, Olympic was not in compliance with the AMEX listing
standards for minimum  shareholder equity. The delisting of Olympic's stock from
the American  Stock  Exchange and other events related to Olympic and disparaged
in the  group's  letter  were  events  which were  considered  during our merger
negotiations,  and does not impact the value of the merger to our  shareholders.
In fact we believe that the combined entity will increase  shareholder value and
provide additional  products and services to our reps.  Furthermore,  there is a
substantial amount of additional information regarding the proposed merger which
will be provided to all shareholders in a proxy  statement.  The transaction can
only proceed with the affirmative approval of a majority of our shareholders and
regulatory approval.  We will be filing a complete proxy statement detailing the
material  terms  of the  transaction,  as well as the  Board's  reasons  for the
transaction  in the near  future.  WE ARE NOT SEEKING ANY PROXY FROM YOU AT THIS
TIME.

Preferred Stock Dividends


     The company has a Series A Preferred  Stock which  provides for the payment
of 6% cash dividend as and when  declared by the board of  directors.  From 1999
until  June  2003,  the  company  declared  and paid  each and  every  quarterly
dividend.  For the period from July 2003 to the present, the company has had the
cash available to make the dividend  payments,  but is legally  prohibited  from
doing so because of restrictions  under New Jersey  corporate law, as it relates
to  stockholders  equity.  In our view it is  completely  false to suggest  that
executive  compensation  had any bearing or  relationship  to the non-payment of
dividends.  Additionally,  upon the  consummation  of the  merger  with  Olympic
Cascade,   the  combined   company's   balance   sheet  will  contain   positive
stockholders'  equity, which will then permit the company to declare and pay all
accrued  and  unpaid  Series  A  Preferred  dividends.   This  was  specifically
stipulated in the recently signed merger  agreement.  Contrary to the assertions
in the  letter,  the company did not have a choice to pay the Series A preferred
dividends or use the money for some other purposes. The Company was and still is
legally prohibited under New Jersey law from paying these dividends. The Company
has  always  paid  and  continues  to pay  interest  on time on our  outstanding
debentures. Now that the balance sheet reflects positive shareholder equity, the
company intends to declare and pay all outstanding Series A preferred dividends,
including those that were missed due to the legal prohibition.


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Management Changes

     The management changes that are described in the letter were put into place
in early 2005 in order to better  prepare our firm for the  challenges  that lay
ahead. In addition,  the proposed merger had always contemplated certain changes
in senior  management  to ensure a  successful  integration  of  members of both
companies'  management  teams into the combined entity. A merger of firms in our
industry can only be  successful  if the  management  team reflects the business
interests of the financial professionals that are the firm's revenue generators.
The recent management changes at First Montauk reflect that commitment,  even to
the financial detriment of certain  individuals.  Mr. William Kurinsky agreed to
terminate his employment after many years of good service to the company, giving
up substantial  economic  benefit to which he would have been entitled under his
employment  contract.  He did so, opting to take certain  compensation in stock,
rather than in cash, in order to not burden the company with a substantial  cash
payment,  and align himself with the interests of all of the  shareholders.  Mr.
Kurisnky's   actions   reflected   a  concern  for   shareholders,   unlike  the
self-interest of the dissident group.

The Board Of Directors

     Here  again the letter  misstates  several  important  facts.  The  current
composition  of the board of  directors  of First  Montauk  Financial  Corp.  is
Herbert  Kurinsky,  William J.  Kurinsky,  Norma  Doxey,  Ward Jones,  and Barry
Shapiro.  Both  Messers.  Jones and Shapiro  are  "independent"  directors,  not
otherwise connected to the company, and make up the compensation  committee that
must approve all executive compensation.

     In  conclusion,  we ask that you  consider  the source  and  motives of the
individuals seeking to discredit our board and management team at a time when we
have  returned  the company to  profitability  and  increased  share  price.  We
recognize our obligation to you, the shareholder,  and pledge to continue on the
course of profitability and increased  shareholder  value. If you wish to obtain
more current  information  about the company,  we recommend  that you review our
publicly   filed   reports,    which   can   be   found   on   our   web   site,
www.montaukfinancial.com or the web site of the SEC at www.sec.gov. You may also
call us at any time at 800-876-3672  if you have any questions and concerns.  We
appreciate your continued support.















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