# OSCAR GRUSS & SON INCORPORATED X-17A-5 (2022-03-31) — Broker-dealer annual report

- Company: OSCAR GRUSS & SON INCORPORATED
- Form: X-17A-5
- Filed: 2022-03-31
- Period: 2021-12-31
- Accession: 0000225412-22-000001
- CIK: 225412
- File #: 8-22371
- Type: Broker-dealer
- Material weakness: No
- Auditor: Mazars USA LLP
- Auditor location: Woodbury, NY
- Contact: Danielle Landau
- Phone: 212-419-4005
- Email: dlandau@oscargruss.com
- Website: oscargruss.com
- Signed by: Danielle Landau (Chief Financial Officer, Chief Compliance Officer)

Original filing: https://www.sec.gov/Archives/edgar/data/225412/000022541222000001/OG2021sfc.pdf

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**UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 

# **ANNUAL REPORTS FORM X-17A-5 PART** Ill

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## SEC FILE NUMBER 8-22371

**FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and lSa-7 under the Securities Exchange Act of 1934**  FILING FOR THE PERIOD BEGINNING **01 /01 /21**  MM/DD/VY AND ENDING **12/31 /21**  MM/DD/VY **A. REGISTRANT IDENTIFICATION**  NAME oF FIRM: Oscar Gruss & Son Incorporated

TYPE OF REGISTRANT (check all applicable boxes):

□ Check here if respondent is also an OTC derivatives dealer

[!] Broker-dealer O Security-based swap dealer □ Major security-based swap participant

ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)

# 1 0 East 53rd Street, 17th Floor

|                                                                                             |  | (No. and Street}                                                       |                                           |            |
|---------------------------------------------------------------------------------------------|--|------------------------------------------------------------------------|-------------------------------------------|------------|
| New York                                                                                    |  | New York                                                               |                                           | 10022      |
| (City)                                                                                      |  | (State)                                                                |                                           | (Zip Code) |
| PERSON TO CONTACT WITH REGARD TO THIS FILING                                                |  |                                                                        |                                           |            |
| Danielle Landau                                                                             |  | (212) 419-4005                                                         | dlandau@oscargruss.com                    |            |
| (Name)                                                                                      |  | (Area Code - Telephone Number)                                         | (Email Address)                           |            |
|                                                                                             |  | B. ACCOUNTANT IDENTIFICATION                                           |                                           |            |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*<br>Mazars USA LLP |  |                                                                        |                                           |            |
|                                                                                             |  | (Name - if individual, state last, first, and middle name)<br>Woodbury |                                           |            |
| 60 Crossways Park Drive West, Suite 301                                                     |  |                                                                        | New York                                  | 11797      |
|                                                                                             |  |                                                                        |                                           |            |
| (Address)                                                                                   |  | (City)                                                                 | (State)                                   | (Zip Code) |
| October 8, 2003                                                                             |  |                                                                        | 339                                       |            |
| T<br>"' of Reg,.,k>n w<h PCAOBJ{• appUcab~J                                                 |  |                                                                        | (PCAOB Re,;stration N,mbe<, ;1 applkable) |            |

\* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(l)(ii), if applicable.

**Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid 0MB control number.** 

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#### **OATH OR AFFIRMATION**

| Danielle Landau |  |
|-----------------|--|
|                 |  |

I, Danielle Landau swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Oscar Gruss & Son Incorporated , as of

12/31 2~ is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. **Commiss1onarofDMdi** ~a..w,l..U ~--

**CityofNewYork•No. ~1:Ul** Title: **Qualified in Ricbmm1d** ~ Chief Financial Officer, Chief Compliance Officer Comnrismon &fJim3 I o ! I / c1 I) di 3

**MARii!'.l'.f A C'Wll.1A}** Sign at~ • *()* 

111~~ Notary Public

#### **This filing\*\* contains (check all applicable boxes):**

- **ii** (a) Statement offinancial condition.
- **ii** (b) Notes to consolidated statement offinancial condition.
- D (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in§ 210.1-02 of Regulation S-X).
- D (d) Statement of cash flows.
- D (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
- D (f) Statement of changes in liabilities subordinated to claims of creditors.
- D (g) Notes to consolidated financial statements.
- D (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-l, as applicable.
- D (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- D 0) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
- 0 (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable.
- D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.1Sc3-3.
- 0 (m) Information relating to possession or control requirements for customers under 17 CFR 240.1Sc3-3.
- 0 (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable.
- □ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-l, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist.
- 0 (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
- **ii** (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable.
- D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- D (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- **ii** (t) Independent public accountant's report based on an examination of the statement of financial condition.
- D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
- D (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- D (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.1Sc3-le or 17 CFR 240.17a-12, as applicable.
- D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). <sup>D</sup>(z) Other: \_\_\_\_\_ \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_ \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_ \_ \_ \_
- 
- *\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e}(3} or 17 CFR 240.18a-7{d)(2), as applicable.*

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(A Wholly Owned Subsidiary of Makor Partners Limited)

Statement of Financial Condition

As of December 31, 2021

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(A Wholly Owned Subsidiary of Makor Partners Limited)

# **CONTENTS**

| Report of Independent Registered Public Accounting Firm |   |
|---------------------------------------------------------|---|
| Financial Statement                                     |   |
| Statement of Financial Condition                        | 2 |
| Notes to Financial Statement                            | 3 |

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![](_page_4_Picture_0.jpeg)

Maza rs USA LLP 60 Crossways Park Drive West Suite 301 Woodbury, New York 11797

Tel: 516.488.1200 www.mazars.us

## **Report of Independent Registered Public Accounting Firm**

**To the Directors and Stockholder of Oscar Gruss** & **Son Incorporated** 

#### **Opinion on the Financial Statement**

We have audited the accompanying statement of financial condition of Oscar Gruss & Son Incorporated, (the "Company"), as of December 31, 2021, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company, as of December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

#### **Basis for Opinion**

This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

We have served as the Company's auditor since 2020.

Woodbury, NY March 31, 2022

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(A Wholly Owned Subsidiary of Makor Partners Limited)

#### **Statement of Financial Condition December 31, 2021**

#### **ASSETS**

| Cash and cash equivalents                                                                                                       | \$<br>2,581,763  |
|---------------------------------------------------------------------------------------------------------------------------------|------------------|
| Restricted cash                                                                                                                 | 317,325          |
| Due from clearing broker, including clearing deposit of \$2,064,004                                                             | 3,701,966        |
| Commission receivable from other broker-dealers and customers, including an<br>allowance for commission receivable of \$145,000 | 2,896,947        |
| Property and equipment, net                                                                                                     | 216,090          |
| Right of use asset                                                                                                              | 3,012,469        |
| Due from affiliates                                                                                                             | 2,042,255        |
| Income taxes receivable                                                                                                         | 48,340           |
| Deferred tax assets                                                                                                             | 288,605          |
| Other assets                                                                                                                    | 220,717          |
| Total assets                                                                                                                    | \$<br>15,326,477 |
| LIABILITIES AND STOCKHOLDER'S EQUITY                                                                                            |                  |
| Liabilities:                                                                                                                    |                  |
| Accrued compensation payable                                                                                                    | \$<br>3,031,090  |
| Accounts payable and accrued expenses                                                                                           | 1,207,080        |
| Due to affiliates                                                                                                               | 998,482          |
| Lease liabilities                                                                                                               | 3,273,796        |
| Subordinated borrowings                                                                                                         | 3,000,000        |
| Total liabilities                                                                                                               | 11,510,448       |
|                                                                                                                                 |                  |
| Stockholder's Equity:                                                                                                           |                  |
| Common stock -<br>no par value; authorized 20,000 shares, issued                                                                |                  |
| and outstanding 16,536 shares                                                                                                   | 433,931          |
| Additional paid in capital                                                                                                      | 3,074,980        |
| Retained earnings                                                                                                               | 307,118          |
| Total stockholder's equity                                                                                                      | 3,816,029        |
| Total liabilities and stockholder's equity                                                                                      | \$15,326,477     |
|                                                                                                                                 |                  |

See Notes to Financial Statement.

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(A Wholly Owned Subsidiary of Makor Partners Limited)

#### **Notes to Financial Statement**

### **Note 1. Operations and Principal Business Activity**

Organization: Oscar Gruss & Son Incorporated (the "Company") is wholly owned by Makor Partners Limited (the "Parent"), and is registered with the Securities and Exchange Commission (the "SEC") as an introducing broker-dealer and is a member of various exchanges and associations, including the Financial Industry Regulatory Authority, Inc. ("FINRA"), National Futures Association ("NFA"), and the Securities Investor Protection Corporation ("SIPC"). The Company's transactions are executed with, and on behalf of, institutional investors, including other brokers and dealers, commercial banks, insurance companies, pension plans and other financial institutions.

Operations: As an introducing broker-dealer, the Company provides services for the purchases and sales of securities. Most transactions are cleared on a fully disclosed basis through an independent broker-dealer. The Company pays this broker-dealer various charges and fees for clearing services provided. All customer-related balances are carried on the books of the clearing broker. The Company carries no customer accounts and does not hold funds or securities for, or owe money or securities to, customers. In the event a customer is unable to fulfill its contractual obligation to the clearing broker, the Company may be exposed to off-balance-sheet risk (refer to Note 3). The Company is engaged in a line of business as a securities broker-dealer in riskless principal transactions.

The Company generates commission revenue through option executions. Similar to equities, the Company provides services for the purchases and sales of derivatives securities. These transactions are directed to the customers' prime broker for clearing services. The Company charges a commission for each of these executions. These customers are invoiced monthly.

Additional income is earned from the Company's research. This line of income is for research services and access to the Company's research database. Customers are invoiced on a monthly or quarterly basis.

The Company operates with a commission sharing agreement with one of its affiliates. This commission sharing agreement is for several securities products such as equities, derivatives, fixed income, foreign exchange currency and interest rate swaps. The Company invoices the affiliate monthly for this commission sharing per the agreement.

The Company operates under the provisions of Paragraph (k)(2)(ii) of Rule 15c-3-3 of the Securities Exchange Act of 1934, and is claiming an exemption from this rule.

The requirements of Paragraph (k)(2)(ii) provide that the Company clear all transactions on behalf of customers on a fully disclosed basis with a clearing broker-dealer and promptly transmit all customer funds and securities to the clearing broker-dealer. The clearing broker-dealer carries all of the accounts of the customers and maintains and

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(A Wholly Owned Subsidiary of Makor Partners Limited)

#### **Notes to Financial Statement**

#### **Note 1. Operations and Principal Business Activity (continued)**

preserves all related books and records as are customarily kept by a clearing brokerdealer.

Branch Offices: The Company currently has four branch office locations. The main office of supervisory jurisdiction is located in New York. This branch operates as the hub with all lines of business operations generating out of this location as well as serving as the main supervisory office for all branches.

The Company has a branch office in Ramat Gan, Israel. This branch operates as the introducing broker-dealer for transactions and customers located primarily in Israel. The Company has a branch office in Dallas, Texas. This branch functions exclusively as a research facility with no transactions being generated.

#### **Note 2. Summary of Significant Accounting Policies**

Basis of Presentation: The Company follows accounting principles generally accepted in the United States of America ("U.S. GAAP"), as established by the Financial Accounting Standards Board (the "FASB"), to ensure consistent reporting of financial condition, results of operations and cash flows.

Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Property and Equipment: Property and equipment is recorded at cost and is depreciated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the economic useful life of the improvement or the term of the lease.

Cash and Cash Equivalents: The Company maintains cash in accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant financial risk. At December 31, 2021, the amount in excess of federally insured limits was approximately \$2,659,000. The Company's cash equivalents are highly liquid investments with an original maturity of three months or less as of acquisition.

Revenue and Expense Recognition: The Company complies with ASC 606, "Revenue from Contracts with Customers" which provides guidance on the recognition of revenue from customers.

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(A Wholly Owned Subsidiary of Makor Partners Limited)

#### **Notes to Financial Statement**

## **Note 2. Summary of Significant Accounting Policies (continued)**

The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer.

Equity and credit research fees are paid to the Company for providing equity and credit research. Revenue is recognized once an arrangement exists and access to research has been provided, which is the point in time when the Company believes that the performance obligation is satisfied. The Company had research income receivable of approximately \$288,000 at December 31, 2021, which is included in other assets on the accompanying statement of financial condition.

Foreign Currency: Gains or losses resulting from foreign currency transactions are included in commission revenue in the statement of operations. Commission revenue and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions.

Income Taxes: The Company's provision for income taxes is based on all items included in income as reported for financial statement purposes. In accordance with U.S. GAAP, uncertain tax positions should be recognized, measured, disclosed and presented in the financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are sustainable when potentially challenged by the applicable tax authority. Tax positions deemed potentially unsustainable would be recorded as a tax expense and liability in the current year. For the year ended December 31, 2021, management has determined that there are no uncertain tax positions.

Deferred Taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in deferred tax assets and liabilities. Valuation allowances are established, if necessary, to reduce the deferred tax assets to their estimated net realizable value.

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(A Wholly Owned Subsidiary of Makor Partners Limited)

#### **Notes to Financial Statement**

#### **Note 2. Summary of Significant Accounting Policies (continued)**

Fair Value of Financial Instruments: At December 31, 2021, the carrying value of the Company's financial instruments, such as cash and cash equivalents, due from clearing broker, commission receivable from other broker-dealers and customers, accounts payable, accrued expenses and loan payable approximate their fair values due to the nature of their short term maturities.

#### Recently Issued Accounting Pronouncements:

In August 2014, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, (Topic 326): Measurement of Credit Losses on Financial Instruments which updated the accounting standards related to account for credit losses on certain types of financial instruments, including loans and debt securities. For short-term account receivables, the new guidance requires a current expected credit loss (CECL) approach to determine the allowance for credit losses. CECL requires loss estimates for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts. The update requires an entity to estimate the credit losses expected over the life of the asset. The estimate of the expected credit losses and subsequent changes in the estimate is reported in current period earnings and recorded through an allowance for credit losses on the balance sheet.

Leases: Effective January 1, 2019, the Company adopted ASC Topic 842, Leases ("ASC 842"). The new guidance increases transparency by requiring the recognition of right to use assets and lease liabilities on the statement of financial condition. The recognition of these lease assets and lease liabilities represents a change from previous U.S. GAAP requirement, which did not require lease assets and lease liabilities to be recognized for most operating leases.

The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lease, have not significantly changed from previous U.S. GAAP requirements.

On October 1, 2020, the Company entered into a new lease. In applying ASC 842, the Company made an accounting policy election not to recognize the right of use assets and lease liabilities relating to short-term leases. Implementation of ASC 842 included an analysis of contracts, including real estate leases and service contracts to identify embedded leases, to determine the initial recognition of the right to use assets and lease liabilities, which required subjective assessment over the determination of the associated discount rates to apply in determining the lease liabilities.

The new lease falling under ASC 842 resulted in the recording of operating lease right of use assets and operating lease liabilities of approximately \$3,563,000 at October 1, 2020.


Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.