# MUTUAL TRUST Co OF AMERICA SECURITIES X-17A-5 (2022-03-29) — Broker-dealer annual report - Company: MUTUAL TRUST Co OF AMERICA SECURITIES - Form: X-17A-5 - Filed: 2022-03-29 - Period: 2021-12-31 - Accession: 0000320250-22-000005 - CIK: 320250 - File #: 8-25547 - Type: Broker-dealer - Material weakness: No - Auditor: OHAB and COMPANY, PA - Auditor location: Maitland, FL - Contact: Jed Bandes - Phone: 727-799-9922 - Email: jed@mutualtrustco.com - Website: mutualtrustco.com - Signed by: Jed Bandes (President) Original filing: https://www.sec.gov/Archives/edgar/data/320250/000032025022000005/fixed.pdf --- {0}------------------------------------------------ | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
PUBLIC
Washington, D.C. 20549
ANNUAL REPORTS
FORM X-17A-5
PART Ill
FACING PAGE
Information Required Pursuant to Rules 17a-S, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | | | 0MB APPROVAL
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SEC FILE NUMBER | | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|-----------------|------------------------------------------------------------------------------------------------------------------------------------------|--|--|--| | AND ENDING 12/31 /21 | | | | | | | | | | FILING FOR THE PERIOD BEGINNING 0 1/01 /21
MM/DD/VY | | | MM/DD/VY | | | | | | A. REGISTRANT IDENTIFICATION | | | | | | | | NAME oF FIRM: Mutual Trust Co. Of America Securities | | | | | | | | | TYPE OF REGISTRANT (check all applicable bDxes):
® Broker-dealer
□ Major security-based swap participant
□ Security-based swap dealer
□ Check here If respondent is also an OTC derivatives dealer
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | | | 546 16th Ave NE | | | | | | | | | | (No. and Street)
St. Petersburg | Florida | | 33704 | | | | | {City) | | (State) | | (Zip Code) | | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | Jed Bandes | 727 -799-9922 | | | jed@mutualtrustco.com | | | | | (Name) | (Area Code -Telephone Number) | | | (Email Address) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
OHAB AND COMPANY, PA
{Name- if individual, state last, first, and middle name)
100 E SYBELIAAVE, SUITE 130 MAITLAND | | | | | | | | | | | | FL | 32751 | | | | | (Address)
JULY 28, 2004 | {City) | | (State)
1839 | (Zip Code) | | | | | | | | | | | | | | | • 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 | FOR OFFICIAL USE ONLY | | | | | | | CFR 240.17a-5(e){l)(II), if applicable. | | | | | | | | I i I > I t I I I : r i I I' 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.** {1}------------------------------------------------ ## **OATH OR AFFIRMATION** I, ~ *d* tsC(..(.A.d:(f , swear, (or aff~ that, to the best of my, knowledge a~d \_belief, the finanl w repp rt per-wining to the firm of *Mu* ttctt.( *tr~* Co. *6't:~{,rtA, X C<,tt.-f,es.* as of v'Y(6f:LlA *'d--***1 R...** • 20 **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. ,.. \_\_ ...,. \_\_\_ ..\_\_ ... ~ Signatur :/4,, .,--------- # **T~s filing•• contains (check all applicable boxes):** - - 'tl'.J, (a) Statement of financial condition. i (b) Notes to consolidated statement of financial 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.lSa-l , as applicable. - D (i) Computation of tangible net worth under 17 CFR 240. lSa-2. - D U) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (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.lSa-4, as applicable. - D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (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.lSa-4, as applicable. - D (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.lSa-1, or 17 CFR 240.lSa-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.lSa-4, as applicable, if material differences exist, or a statement that no material differences exist. - D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - ~ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.lSa-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.lSa-7, as applicable. - D (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.lSa-7, as applicable. - 1:8!" (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 financia l report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.lSa-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.lSa-7, as applicable. - D (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.l 7a-5 or 17 CFR 240.lSa-7, as applicable. - D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-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). D(z) Other: \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_ \_ - - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18o-7(d)(2), as applicable. {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) 100 E. Sybelia Ave. Suite 130 Maitland, FL 32751 *Certified Public Accountants* **Email: pam@ohnbco.com** Telephone 407-740-73.I I Fax 407-740-6441 > l I > > I ' ,1 ·' ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Members' of Mutual Trust Company of America Securities #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Mutual Trust Company of America Securities 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 Mutual Trust Company of America Securities as of December 31, 2021 in conformity with accounting prir).ciples generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of Mutual Trust Company of America Securities' management. Our responsibility is to express an opinion on Mutual Trust Company of America Securities' 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 Mutual Trust Company of America Securities in accordance with the 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 financiai 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 statements. 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 statements. We believe that our audit provides a reasonable basis for our opinion. *0--f,.\_v* ~ Ohab and Company, PA We have served as Mutual Trust Company of America Securities' auditor since 2021. Maitland, Florida March 27, 2022 {3}------------------------------------------------ # **MUTUAL TRUST COMPANY OF AMERICA SECURITIES STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2021** i ' I I, ! i i' i ii " "' li1 I. ii ,, i! i .I ]1 | Assets | | | |---------------------------------------------------------------------------------|----|-----------| | Cash and cash equivalents | | 744,123 | | Deposits with clearing organizations and others | | 216,906 | | Accounts receivable | | 281,593 | | Prepaid expenses | | 23,275 | | Total assets | \$ | 1,265,897 | | | | | | Liabilities and Members' equity | | | | Liabilities | | | | Accounts payable | \$ | 458,659 | | Total liabilities | | 458,659 | | Members' equity | | | | Common stock, \$1 par value,
1,000 shares authorized, issued and outstanding | | 1,000 | | Paid in capital | | 177,733 | | Retained earnings | | 628,505 | | Total members' equity | | 807,238 | | Total liabilities and net assets | \$ | 1,265,897 | **The accompanying notes are an integral part of these financial statements.** {4}------------------------------------------------ #### NOIE 1- **ORGANIZATIONANDNATIJREOFBUSINESS** Mutual Trust Company of America Securities (the Company) is a broker-dealer registered with the Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority (FINRA). The Company was incorporated in Florida on June 23, 1980. The Company is a broker/dealer registered with the Securities and Exchange Commission and engaged in the business of selling securities including stock, bonds, and other marketable securities. ## **NOIE2- SUMMARYOFSIGNIFICANT ACCOUNTINGPOIICIES** **Basis of presentation** - The accompanying financial statements of the Organization have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. **Use of estimates** - The preparation of fmancial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses. These estimates are based on management's knowledge and experience. Actual results could differ from estimates. #### **Fair value of financial instruments** - The Company uses a three-level valuation hierarchy for disclosures of fair value measurements and enhances disclosure requirements for fair value measures. The estimated fair value of the Company's cash and cash equivalents, commissions receivable and commissions payable at December 31, 2021 approximates their respective value in these financial statements due to their relatively short holding periods. I; I' l I 'I I: **Cash and cash equivalents** - The Company considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. The Company maintains cash balances in insured financial institutions. Cash account balances may exceed amounts insured by the Federal Deposit Insurance Corporation at any given time. On December 31, 2021, cash deposits exceed federally insured limits by approximately \$494,123. The deposits with clearing firms are maintained at a highly capitalized, national clearing firm that is also regulated by FINRA. The Company believes this concentration of credit risk is mitigated by the overall fmancial strength of the clearing firm. At December 31, 2021, deposit held with clearing firms was \$216,906. **Impairment oflong-lived assets** - Long-lived assets are reviewed for possible impairment on an annual basis or whenever adverse events, or circumstances indicate the carrying value of an asset may not be recoverable. Where indications of impairment are identified, management determines whether impairments are present by comparing carrying amounts to the undiscounted future cash flows at the lowest discernible level. hnpairment charges, if present, are calculated upon discounted cash flows or fair value, whichever is more readily available. **Revenue recognition** - The Company's revenue includes commission income, based on purchases and sale of securities done on its customer's behalf. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgement is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; whether revenue should be presented gross or net of certain costs; and whether constraints on variable consideration should be applied due to uncertain future events. {5}------------------------------------------------ ii 11\_ i,' ·' > i ,I ,, !, ## **NOIE2-SUMMARYOFSIGNIFICANf ACOJUNilNGPOLICIES(Continued)** #### **Revenue recognition (Continued)** *Commissions* *Brokerage commissions.* The Company buys and sells securities on behalf of its customers. Each time a customer enters a buy or sell transaction, the Company charges a commission. Commissions and related 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 of the securities have been transferred to/from the customer. *Distribution fees.* The Company enters into arrangements with managed accounts or other pooled investment vehicles (funds) to distribute shares to investors. The Company may receive distribution fees paid by the fund up front, over time, upon the investor's exit from the fund (that is, a contingent deferred sales charge), or as a combination thereof. The Company believes that its performance obligation is the sale of securities to investors and as such this is fulfilled on the trade date. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares at future points in time as well as the length of time the investor remains in the fund, both of which are highly susceptible to factors outside the Company's influence, the Company does not believe that it can overcome this constraint until the market value of the fund and the investor activities are known, which are usually monthly or quarterly. Distribution fees recognized in the current period are primarily related to performance obligations that have been satisfied in prior periods. **Expense recognition** - Expenses are recorded as incurred. Any expense incurred but not paid in the current operating cycle is recorded as a current liability in accounts payable. Direct costs include commissions paid to brokers and management fees. **Income taxes** - The Company has elected under Subchapter S of the Internal Revenue Code to be treated as a disregarded entity for purposes of income taxation. As a disregarded entity, all elements of income and expense of the Company are allocated to the Owner and reported on his individual income tax return. Accordingly, there is no provision for income taxes in these financial statements. The Company is open to review generally three years after the filing date of the return. {6}------------------------------------------------ II f It l' I # **N01E3-FAIRVALUEMEASUREMENTS** The Company's assets recorded at fair value have been categorized based upon a fair value hierarchy in accordance with ASC 820-10, *Fair Value Measurement.* Fair value is defined as the price that would be received to sell as asset or would be paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measure date. ASC 820-10 established a three-level hierarchy for fair value measurements that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and the reporting entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The hierarchy level assigned to each security held by the Company is based on the assessment of the transparency and reliability of the inputs used in the valuation of such security at the measurement date. The three hierarchy levels are defined as follows: *Level I* - Valuations based on unadjusted quoted market prices in active markets for identical securities. *Level 2* - Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. *Level 3* - Valuations based on inputs that are unobservable and significant to the overall fair value measurement and involve management judgment. When available the Company measures fair value using level I inputs because they generally provide the most reliable evidence of fair value. {7}------------------------------------------------ # **NOTE** 4 - **RELATED PARTY TRANSACTIONS** The Company does not own or lease property or lease office space. Tue Company shares office space with several non-affiliated entities under a verbal cost sharing agreement. In exchange for office space, the services of the Owner's assistant and certain other office expenses are exchanged for certain clearing fees and commissions. Under the agreement, no revenue or expenses have been recognized for the shared services. Tue Company does not have employment contracts with its key employees, including the controlling member who is an officer of the Company. The Company pays a management fee to an affiliated entity for the services ofits President. Management fees of\$750,000 were paid in 2021 for these services. The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties. # **NOTE 5** - **NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule 15c3-I, which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, as defined, shall rtot exceed 15 to I. At December 31, 2021 we had net capital of \$779,625 which was \$679,625 in excess of the required net capital of \$100,000. The ratio of aggregate indebtedness to net capital was 1 to 58.83 or 58.53% at December 31, 2021. # **NOTE 6- CONCENTRATIONS OF CREDIT RISK** The Company engaged in various trading and brokerage activities in which counterparties primarily include broker-dealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty, or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standings of each counterparty. {8}------------------------------------------------ # **NOTE 7 - COMMITMENTS AND CONTINGENCIES** # **LITIGATION** From time to time, the Company may be involved in legal proceedings arising out of the ordinary course of business. The company is subject to a claim for alleged losses exceeding \$500,000 for allegations of unsuitable investments, which happened during the Covid pandemic. The company not only denies the amount of alleged losses but the basis of the claim itself and will be vigorously defending its position. The companies has an insurance policy that will cover any potential loss with a \$50,000 deductible that has been recorded as a liability as of year-end 2021. l '' 'i ;, I I # **NOTES-SUBSEQUENT EVENTS** The Company has performed an evaluation of events that have occurred subsequent to December 31, 2021, and through March 27, 2022, the date the filing of this report. There have been no material subsequent events that occurred during such period that would require disclosure in this report or would be required to be recognized in the financial statements as of December 31, 2021. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.