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Related Party Disclosures
 3 Months Ended
Mar. 31, 2023
Related Party Disclosures [Abstract]  
Related Party Disclosures

22. Related Party Disclosures

 

KCA

 

KCA is an affiliate of the Company and is under common ownership with the Company. To gain efficiencies and economies of scale with billing and administrative functions, KCA serves as a paymaster for the Company for payroll and related functions, the entirety of which KCA passes through to the subsidiaries of the Company proportionally.

 

KCA owns a license from the Muriel Siebert Estate / Foundation to use the names “Muriel Siebert & Co., Inc.” and “Siebert” within business activities, which expires in 2025. KCA passed through to the Company its cost of $15,000 for the use of these names in both the three months ended March 31, 2023 and 2022.

 

KCA has earned no profit for providing any services to the Company as KCA passes through any revenue or expenses to the Company’s subsidiaries for both the three months ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022, the Company had a payable to KCA of $9,000 and $4,000, respectively, for miscellaneous expenses, which are in the line item “Accounts payable and accrued liabilities” on the statements of financial condition.

 

PW

 

PW brokers the insurance policies for related parties. Revenue for PW from related parties was $22,000 and $75,000 for the three months ended March 31, 2023 and 2022, respectively.

 

Gloria E. Gebbia, John J. Gebbia, and Gebbia Family Members

 

On March 31, 2022, Gloria E. Gebbia exchanged approximately $2.9 million of her notes payable to Company for 24% of the outstanding and issued membership interests in RISE.

 

The Company has entered into various notes payable with Gloria E. Gebbia, the Company’s principal stockholder. The Company had interest expense related to theses notes payable of $0 and $70,000 for the three months ended March 31, 2023 and 2022, respectively.

 

The Company’s obligations under its loan with East West Bank are guaranteed pursuant to a guarantee agreement by and among, John J. Gebbia and Gloria E. Gebbia, individually, and as a co-trustees of the John and Gloria Gebbia Trust. Refer to Note 14 – Long-Term Debt for additional detail.

 

Gloria E. Gebbia has extended loans to certain Company employees for the purchase of the Company’s shares. These transactions have not materially impacted the Company’s financial statements.

 

The sons of Gloria E. Gebbia and John J. Gebbia hold executive positions within the Company’s subsidiaries and their compensation was in aggregate $524,000 and $443,000 for the three months ended March 31, 2023 and 2022, respectively. Part of their compensation includes performance-based payments related to key revenue streams.

 

Gebbia Sullivan County Land Trust

 

The Company operates on a month-to-month lease agreement for its branch office in Omaha, Nebraska with the Gebbia Sullivan County Land Trust, the trustee of which is a member of the Gebbia Family. For both the three months ended March 31, 2023 and 2022, rent expense was $15,000 for this branch office.

 

Tigress and Hedge Connection

 

The Company entered into various agreements and subsequent terminations with Tigress and Hedge Connection. Refer to Note 3 – Transactions with Tigress and Hedge Connection and Note 11– Equity Method Investment in Related Party for further detail.

 

RISE

 

During the year ended 2022, RISE issued and Siebert sold membership interests of RISE to Siebert employees, directors and affiliates. Refer to Note 4 – RISE for further detail. RISE entered into a clearing arrangement with MSCO and deposited a clearing fund escrow deposit of $50,000 to MSCO, and had excess cash of approximately $1.2 million in its brokerage account at MSCO as of March 31, 2023.