# LIBERTY ASSOCIATES, INC. X-17A-5 (2022-03-21) — Broker-dealer annual report
- Company: LIBERTY ASSOCIATES, INC.
- Form: X-17A-5
- Filed: 2022-03-21
- Period: 2022-01-31
- Accession: 0000742118-22-000002
- CIK: 742118
- File #: 8-31505
- Type: Broker-dealer
- Material weakness: No
- Auditor: Brian W. Anson
- Auditor location: Tarzana, CA
- Contact: Allison Lindh
- Phone: 212-869-8224
- Email: alindh@libertyai.com
- Website: libertyai.com
- Signed by: Allison M. Lindh (Chief Financial Officer)
Original filing: https://www.sec.gov/Archives/edgar/data/742118/000074211822000002/2021laiaudit.pdf
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**UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549**
0MB APPROVAL 0MB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12
# **ANNUAL REPORTS FORM X-17A-5 PART Ill**
| SEC FILE NUMBER |
|-----------------|
| 8-31505 |
**FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** 02/01 /21 1 /31 /22 FILING FOR THE PERIOD BEGINNING \_\_\_\_\_\_\_\_ AND ENDING \_\_\_\_\_\_\_\_ \_ MM/DD/VY MM/DD/VY **A. REGISTRANT IDENTIFICATION** Liberty Associates, Inc. NAME OF FIRM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ TYPE OF REGISTRANT (check all applicable boxes): !! Broker-dealer O Security-based swap dealer 0 Major security-based swap participant D Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) 501 Fifth Avenue, 15th Floor (No. and Street) New York NY (City) (State) **PERSON** TO CONTACT WITH REGARD TO THIS FILING 10017 (Zip Code) Allison M. Lindh 212-869-8224 alindh@libertyai.com (Name) (Area Code - Telephone Number) (Email Address) **B. ACCOUNTANT IDENTIFICATION** INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* Brian W. Anson, CPA (Name - if individual, state last, first, and middle name) 18455 Burbank Blvd., #404 Tarzana CA (Address) September 15, 2005 (City) (State) 2370 91356 (Zip Code) rt, of Reg;st,atloo w;th PCAOB )(;f appHcable) **FOR OFFICIAL USE ONLY** (PCAOB Reg;matloo N,mbe<, If applicable) I • 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-S(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**
1, Allison M. Lindh swear (or affirm) that, to the best of my knowledge and belief, the
financial report pertaining to the firm of Liberty Associates, Inc. , as of January 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 **,cf,'rtr. ~u.\_:'Tl\_m,,~--------**
Notary Publi~
# **This filing\*\* contains (check all applicable boxes):**
- ~ (a) Statement of financial condition.
- D (b) Notes to consolidated statement of financial condition.
- ~ (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) Statement of cash flows.
- ~ (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.
- ~ (g) Notes to consolidated financial statements.
- ~ (h) Computation of net capital under 17 CFR 240.1Sc3-1 or 17 CFR 240.18a-1, as applicable.
- □ (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- ~ U) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
- □ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.1Sc3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable.
- □ (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.1Sc3-3.
- ~ (m) Information relating to possession or control requirements for customers under 17 CFR 240.1Sc3-3.
- D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.1Sc3-3(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-1, 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.
- □ (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 240.18a-7, as applicable.
- □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- ~ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- D (t) Independent public accountant's report based on an examination of the statement of financial condition.
- ~ (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.
- ~ (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.l 7a-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).
- □ (z) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_
- \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5{e)(3) or 17 CFR 240.1Ba-7(d)(2), as applicable.
SiE!Ul;l).621Srlz\_ *ci;;L*
Title: Chief Financial Officer
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**Liberty Associates, Inc.**
# **Financial Statements and Supplemental Schedules Required by the U.S. Securities and Exchange Commission**
**Including Independent Auditor's Report Thereon**
**For the Year-Ended January 31, 2022**
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| Independent Auditors Report | 3 |
|-------------------------------------------------------------------------------|----|
| Financial Statements | 4 |
| Statement of Financial Condition | 4 |
| Statement of Operations | 5 |
| Statement of Cash Flows
| 6 |
| Statement of Changes in Ownership Equity | 7 |
| Notes to Financial Statements | 8 |
| Supplementary Schedules Pursuant to SEA Rule 17a-5 | 12 |
| Computation of Net Capital | 12 |
| Computation of Net Capital Requirement
| 12 |
| Computation of Aggregate Indebtedness | 12 |
| Computation of Reconciliation of Net Capital
| 12 |
| Statement Related to Exemptive Provision (Possession and Control) | 13 |
| Statement Related to Material Inadequacies | 13 |
| Exemption Report Pursuant to SEA Rule 17a-5(d)(1)(i)(B)(2) | 14 |
| Auditors Review of Exemption Report Pursuant to SEA Rule 17a-5(d)(1)(i)(B)(2) | 15 |
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# **BRIAN W. ANSON**
*Certified Public Accountant*
18455 Burbank Blvd., Suite 404, Tarzana, CA 91356 • Tel. (818) 636-5660 • Fax (818) 881-2605
# **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
To the Shareholder's and Board of Directors of Liberty Associates, Inc.
# **Opinion on the Financial Statements**
I have audited the accompanying statement of financial condition of Liberty Associates, Inc. as of January 31, 2022, the related statements of operations, changes in stockholder's equity, and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In my opinion, the financial statements present fairly, in all material respects, the financial position of Liberty Associates, Inc. as of January 3 1, 2022, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
# **Basis for Opinion**
These financial statements are the responsibility of Liberty Associates, Inc. 's management. My responsibility is to express an opinion on Liberty Associates, Inc.'s financial statements based on my audit. I am a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and am required to be independent with respect to Liberty Associates, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
I conducted my audit in accordance with the standards of the PCAOB. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. My audit included performing procedures to assess the risks of material misstatement of the financial statements, 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. My audit also included evaluating the accounting principles used and significant estimates made by management, as evaluating the overall presentation of the financial statements. I believe that my audit provides a reasonable basis for my opinion.
# **Auditor's Report on Supplemental Information**
The information contained in Schedule I, II, and III ("Supplemental Information") has been subjected to audit procedures performed in conjunction with the audit of the Liberty Associates, Inc.'s financial statements. The Supplemental Information is the responsibility of the Liberty Associates, Inc.'s management. My audit procedures included determining whether the Supplemental Information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the Supplemental Information. In forming my opinion on the Supplemental Information, I evaluated whether the Supplemental Information, including its form and content is presented in conformity with 17 C.F.R. § 240. l 7a-5. In my opinion, Schedules I, II, and III are fairly stated, in all material respects, in relation to the financial statements taken as a whole.
I have served as Liberty Associates, Inc. 's auditor since 2018.
Tarzana, California March 18, 2022
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# **Liberty Associates, Inc. Financial Statements Statement of Financial Condition**
**For the Year-Ended January 31, 2022**
| Assets | |
|------------------------------------------------------------------------------------------------------|-----------|
| Assets | |
| Cash and cash equivalents | \$93,606 |
| Clearing Broker | 50,000 |
| Accounts Receivable | 8,000 |
| Total Assets | \$151,606 |
| Liabilities | |
| Liabilities | |
| Clearing Broker | \$1,198 |
| Accrued Liabilities | 7,600 |
| Other Liabilities | 10,030 |
| Total Liabilities | \$18,828 |
| Stockholder's Equity | |
| Common Stock
(1,440,000
shares
authorized, 1,440,000
shares issued
and outstanding) | 5,000 |
| Preferred Stock
(200,000
shares
authorized, 160,000
shares issued
and
outstanding) | 400,000 |
| Additional Paid in Capital | 370,000 |
| Retained Deficit | (642,223) |
| Total Stockholder's Equity | 132,777 |
| Total Liabilities and Stockholder's Equity | \$151,606 |
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# **Liberty Associates, Inc. Financial Statements Statement of Operations For the Year-Ended January 31, 2022**
| Revenues | |
|--------------------------------|-------------|
| Commissions Earned | \$190,495 |
| Services Income | 20,000 |
| Other Income | 951 |
| Dividend & Interest Income | 39 |
| Total Revenues | \$211,485 |
| Operating Expenses | |
| Professional
Services | \$48,550 |
| Clearance Fees | 45,269 |
| Commissions | 207,014 |
| Earnings | 39,601 |
| Insurance Expense | 2,001 |
| Floor Brokerage, Exchange Fees | 4,900 |
| Tech, Data, & Communication | 11,658 |
| Registration Fees | 21,765 |
| Occupancy
& Expense Sharing | 47,100 |
| Other Expenses | 8,341 |
| Total Operating Expenses | \$436,199 |
| Operating Income (Loss) | \$(224,714) |
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# **Liberty Associates, Inc. Financial Statements Statement of Cash Flows For the Year-Ended January 31, 2022**
**Cash Flows From Operating Activities** Net Income (Loss) \$ (224,714) Accrued Commissions Accounts Receivable (10,823) (8,000) Clearing Deposit (50,000) Clearing Broker Liabilities 1,198 Payment Deposit Liabilities 10,000 Total Adjustments (57,625) **Net Cash Provided By (Used in) Operating Activities** \$(282,339) **Net Increase (Decrease) In Cash and Cash Equivalents** \$(282,339) **Cash and Cash Equivalents at Beginning of Period** \$375,945 **Cash and Cash Equivalents at End of Period** \$93,606 **Cash Paid for Interest** \$0 **Cash Paid for Income Taxes** \$0
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# **Liberty Associates, Inc. Financial Statements Statement of Changes in Ownership Equity For the Year-Ended January 31, 2022**
| | Common
Stock | Preferred
Stock | Paid-In
Capital | Retained
Deficit | Total Equity |
|--------------------------------|-----------------|--------------------|--------------------|---------------------|--------------|
| Balance –
February 1, 2021 | \$5,000 | \$400,00 | \$370,000 | (\$417,509) | \$357,491 |
| Net Income (Loss) | - | | - | (224,714) | (224,714) |
| Balance as of January 31, 2022 | \$5,000 | \$400,000 | \$370,000 | (\$642,223) | \$132,777 |
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# **Liberty Associates, Inc. Notes to Financial Statements For the Year-Ended January 31, 2022**
## NOTE A - SUMMARY OF ACCOUNTING POLICIES
Accounting principles followed by the Company and the methods of applying those principles which materially affect the determination of financial position, results of operation and cash flows are summarized below:
#### Organization
Liberty Associates, Inc. (the Company) was incorporated in the State of New York effective February 15, 1984. The Company has adopted a fiscal year ending January 31st.
## Description of Business
The Company, located in New York, NY is a broker and dealer in securities registered with the Securities and Exchange Commission ("SEC") and is a member of FINRA. The Company operates under an exemption pursuant to exemptive provision under Rule 15c-3(k)(2)(ii). The Company clears all transactions on a fully-disclosed basis through its clearing firm, RBC Correspondent Services with a \$50,000 clearing deposit.
#### Basis of Accounting
The financial statements of the Company have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities.
#### Revenue Recognition
Commission revenues are recorded by the Company on the settlement date reported by the commission statements.
#### Income taxes
Effective February 15, 1984, the Company began operations. Federal income taxation occurs at the entity level. The company is subject to audit by taxing agencies for years ended 2019, 2020, and 2021.
#### Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
#### SUBSEQUENT EVENTS
The Company has evaluated events subsequent to the balance sheet date for items requiring recording or disclosure in the financial statements. The evaluation was performed through March 18, 2022, which is the date the financial statements were available to be issued. As of October 2018, Liberty Associates, Inc. has established a clearing and custodial arrangement with RBC Correspondent Services.
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### NOTE B - ASC 606 Revenue Recognition
Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfied a performance obligation by transferring control over a product or service to a customer.
Taxes and regulatory fees assessed by a government authority or agency that are both imposed on and concurrent with a specified revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.
The following is a description of activities – separated by reportable segments, per FINRA Form "Supplemental Statement of Income (SSOI)"; from which the Company generates its revenue. For more detailed information about reportable segments see below.
Commissions: This includes performance obligations related to transactions that is subject to SEA Rule 10b-10 for any renumeration that would need to be disclosed. It also includes any transaction when the Company is engaged as an agent. It does not include net gains or losses from transactions made by the Company when acting as a principal, or riskless principal.
Net Gains or Losses on Principal Trades: This includes all realized and unrealized gains and losses from proprietary trading and market making activities and net gains or losses from "riskless" principal transactions.
Interest/Rebate/Dividend Income: This includes rebates and/or interest earned on Securities borrowings; reverse repurchase transactions; Margin interest; interest earned from customer bank sweep into FDIC insured products and '40 Act investments and any interest and/or dividends on securities held in Firm inventory.
Due to the nature of the Company's business, changes in receivables, contract assets and contract liabilities with customers due to revenue recognized from performance obligations satisfied in previous periods were immaterial.
#### NOTE C - CONCENTRATION OF CREDIT RISK
At January 31, 2022, the Corporation maintained a cash balance of \$142,407 in a bank account. The bank account is insured by the Federal Deposit Insurance Corporation up to \$250,000, and at January 31, 2022 is fully insured. The money market fund is unsecured. Accordingly, the Corporation is subject to credit risk from this concentration.
### NOTE D - COMMITMENTS AND CONTINGENCIES
Liberty Associates, Inc. does not have and never had any commitments, guarantees, or contingencies (arbitrations, lawsuits, claims, etc.) that may result in a loss or future obligation or that may be asserted against the firm at a future date.
### NOTE E - FAIR VALUE
The carrying amounts reflected in the balance sheet for cash, money market funds, and marketable securities approximate the respective fair values due to the short maturities of those Instruments.
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Available- for-sale marketable securities are recorded at fair value in the balance sheet. A comparison of the carrying value of those financial instruments is as follows:
| | Fair value at Reporting
Date Using | | |
|-----------------------|---------------------------------------|-----------------------|--|
| January 31, 2021 | Carrying Value
Level 1 | Fair Value
Level 1 | |
| Marketable Securities | \$0 | \$0 | |
| Total | \$0 | \$0 | |
# Fair Value of Financial Instruments
Financial instruments that are subject to fair value disclosure requirements are carried in the financial statements at amount that approximate fair value and include cash and cash equivalents. Fair values are based on quoted market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of perceived risk.
# NOTE F - NET CAPITAL REQUIREMENTS
The Company is subject to uniform net capital Rule (Rule 15c3-1) of the Securities and Exchange Commission. Minimum net capital is the greater of \$5,000 or 6 2/3 of aggregate indebtedness. In this case the minimum net capital is \$5,000. On January 31, 2022, the Company's net capital of \$124,777 exceeded the minimum net capital requirement of \$5,000 by \$119,777 and the Company's ratio of aggregate indebtedness of \$18,828 to net capital was .15:1, which is less than the 15:1 maximum ratio requirement.
# Statement of Exemption of Reserve Requirement
The Company is subject to the Uniform Net Capital Rule 15c3- 1, which requires the maintenance of minimum Net Capital. The Company has elected to use the basic computation method, as is permitted by the rule, which requires that the Company maintains minimum Net Capital pursuant to a fixed dollar amount or 6-2/3% percent of total aggregate indebtedness, as defined, whichever is greater, and does not, therefore, calculate it's net capital requirement under the alternative reserve requirement method.
# NOTE G - POSSESSION OR CONTROL REQUIREMENTS
The Company does not have any possession or control of customer's funds or securities. There were no material inadequacies in the procedures followed in adhering to the exemptive provisions under Rule 15c-3-3(k)(2)(ii).
# NOTE H - INCOME TAXES
The Company accounts for income taxes using the asset and liability method. Valuation allowances are established, when necessary, to reduce deferred tax assets when it is *more likely than not* that a portion or all of a given deferred tax asset will not be realized. Income tax expense includes (i) deferred tax expense, which generally represents the net change in the deferred tax asset or liability balance during the year plus any change in valuation allowances and (ii) current tax expense, with represents the amount of tax currently payable to or receivable from a taxing authority. The Company is subject to audit by the taxing agencies for years ending December 31, 2019, 2020, and 2021.
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The component of income taxes at December 31, 2021 are as follows:
| | | Current
Deferred | Total |
|---------|-----|---------------------|-----------|
| 2021 | | | |
| | | | |
| Federal | \$0 | \$35,993 | \$135,993 |
| State | \$0 | \$16,951 | \$16,951 |
The NOL carryforward is available for 20 years, expiring December 31, 2040 in the amount of \$178,897.
Deferred taxes have been calculated based on the significant temporary differences between current and future periods taxable income which are primarily due to accounts receivable, prepaid expenses, accounts payable, differences in depreciation methods and research and development tax credit carryforwards.
The components of the Company's deferred tax assets/liabilities are as follows:
| Deferred tax assets: | \$52,944 |
|----------------------|------------|
| Valuation allowance: | (\$52,944) |
| Total | \$0 |
Note I – Related Party Transactions
During the reporting period the Firm had in place an expense sharing agreement with S&E Azriliant, P.C., a related party in the amount of \$3,100 per month which includes rental expense, utilities, communication, telephone, and supplies totaling \$47,100. As of March 1, 2021, the Firm updated the expense sharing agreement for the updated amount totaling \$4,000 per month. The Firm believes ASC 842 lease accounting does not apply as it has an expense sharing agreement.
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# **Liberty Associates, Inc. Supplementary Schedules Pursuant to SEA Rule 17a-5 Of the Securities and Exchange Act of 1934 For the Year-Ended January 31, 2022**
#### **Schedule II**
#### **Computation of Net Capital**
| Stockholder's Equity | | \$ 132,777 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|-----------------------------------------|
| Non-Allowable Assets
Property and Equipment
Accounts Receivable - other
Total Non-Allowable Assets | \$ 0.00
(8,000) | \$ (8,000) |
| Other Securities
Exempted Securities
Other Charges | \$0.00
0.00
0.00 | |
| Haircuts on Securities Positions
Securities Haircuts
Undue Concentration Charges | \$ 0.00
0.00 | \$0.00 |
| Net Allowable Capital | | \$ 124,777 |
| Computation of Net Capital Requirement | | |
| Minimum Net Capital Required as a Percentage of Aggregate Indebtedness
Minimum Dollar Net capital Requirement of Reporting Broker-Dealer
Net Capital Requirement
Excess Net Capital | | \$ 1,255
5,000
5,000
\$119,777 |
| Computation of Aggregate Indebtedness | | |
| Total Aggregate Indebtedness
Percentage of Aggregate Indebtedness to Net Capital
Computation of Reconciliation of Net Capital | | \$ 18,828
15.09% |
| Net Capital Computed on FOCUS IIA as of January 31, 2022 | | \$ 124,777 |
| Adjustments
Increase (Decrease) in Equity
(Increase) Decrease in Non-Allowable Assets
(Increase) Decrease in Securities Haircuts
Net Capital per Audit | | 0.00
0.00
0.00
\$ 124,777 |
| Reconciled Difference | | - |
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# **Liberty Associates, Inc. Supplementary Schedules Pursuant to SEA Rule 17a-5 Of the Securities and Exchange Act of 1934**
As of and for the Year-Ended January 31, 2022
#### **Schedule II**
# **Statement Related to Exemptive Provision (Possession and Control)**
The Company does not have possession or control of customer's funds or securities. There were no material inadequacies in the procedures followed in adhering to the exemptive provisions of SEA Rule [15c3-3(k)(2)(ii)]; All customer transactions cleared through another broker-dealer on a fully disclosed basis.
# **Schedule III**
# **Statement Related to Material Inadequacies**
This audit did not disclose any material inadequacies since the previous audit of the financial statements contained within the audit report of the Computation of Minimum Net Capital Requirement as reported in the Supplemental Schedules contained within the audit report or the filed Financial and Operational Combined Uniform Single Report filed pursuant to SEA Rule 15c3-1. The firm is exempt from 15c3-3; it does not maintain customer funds or securities and therefore does not maintain customer funds to segregate nor does it maintain separate accounts for customers.
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March 18, 2022 Brian W. Anson, CPA 18401 Burbank Blvd., #120 Tarzana, CA 91356
This representation letter is provided in connection with your audit of the financial statements of Liberty Associates, Inc. which comprise the statement of financial condition as of January 31, 2022, and the related statements of operations, changes in shareholder's equity, and cash flows for the year then ended pursuant to Rule 17a-5 under the Securities Exchange Act of 1934, and the related notes to the financial statements and supplemental information, for the purpose of expressing an opinion as to whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States (U.S. GAAP). We are also responsible for adopting sound accounting policies, establishing and maintaining internal control, and preventing and detecting fraud.
Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.
We confirm, to the best of our knowledge and belief, as of March 18, 2022, the following representations made to you during your audit.
- We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated February 28, 2022 including our responsibility for the preparation and fair presentation of the financial statements pursuant to Rule 17a-5 under the Securities and Exchange Act of 1934, and the related notes to the financial statements and supplemental information.
- The financial statements referred to above are fairly presented in conformity with U.S. GAAP and include all disclosures necessary for such fair presentation and disclosures required to be included by the laws and regulations to which the Company is subject.
- We have provided you with:
- o Access to all financial records and other information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statements, such as records, documentation, and other matters.
- o Additional information that you have requested from us for the purpose of the audit.
- o Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.
- o Minutes of the meetings of stockholders, directors, and committees of directors, or summaries of actions of recent meetings for which minutes have not yet been prepared (no meetings took place during the prior fiscal year).
- We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements and supplementary information that are free from material misstatement, whether due to fraud or error.
- We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
- Related party relationships and transactions and amounts receivable from or payable to related parties have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP.
- Significant assumptions we used in making accounting estimates, including those measured at fair value, are reasonable.
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- Significant estimates and material concentrations known to management have been properly disclosed in accordance with U.S. GAAP.
- The effects of uncorrected misstatements are immaterial, both individually and in the aggregate, to the financial statements as a whole.
- The effects of all known actual or possible litigation, claims, and assessments have been accounted for and disclosed in accordance with U.S. GAAP.
- Guarantees, whether written or oral, under which the company is contingently liable, have been properly recorded or disclosed in accordance with U.S. GAAP.
- All securities exchange memberships and participation in joint accounts carried by others have been properly recorded.
- There are no material unrecorded assets or contingent assets, such as claims relating to buy-ins, unfulfilled contracts, etc., whose value depends on the fulfillment of conditions regarded as uncertain.
- All borrowings and financial obligations of which we are aware are included in the financial statements, and all borrowing arrangements of which we are aware are disclosed.
- There are no securities or investments not readily marketable owned by us or borrowed under subordination agreements.
- The Company has assessed the impact of FASB ASC 740, Income Taxes , and has determined that no material liability is required to be recorded.
- There are no borrowings or claims unconditionally subordinated to all claims or general creditors pursuant to a written agreement.
- The books and records underlying the financial statements and supplemental information have been reconciled to supporting data and properly adjusted as necessary.
- All material transactions have been properly recorded in the accounting records and reflected in the financial statements.
- We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.
- We have no knowledge of any fraud or suspected fraud that affects the entity and involves:
- o Management,
- o Employees who have significant roles in internal control, or
- o Others where the fraud could have a material effect on the financial statements.
- We have no knowledge of any allegations of fraud or suspected fraud affecting the Company's financial statements communicated by employees, former employees, regulators, or others.
- We have no knowledge of any violations or suspected violations of laws and regulations whose effects should be considered when preparing financial statements or as a basis for recording a loss contingency.
- We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements.
- We are not aware of any pending or threatened litigation, claims, or assessments or unasserted claims or assessments that are required to be accrued or disclosed in the financial statements in accordance with U.S. GAAP, and we have not consulted a lawyer concerning litigation, claims, or assessments
- We have obtained the service auditor's report from our service organization RBC Capital Markets, LLC. We have reviewed that report, including the complementary user controls. We have implemented the relevant user controls and they were in operation for the year ended January 31, 2022.
- There are no other liabilities or gain or loss contingencies that are required to be accrued or disclosed under GAAP.
- We have disclosed to you the identity of the Company's related parties and all the related party relationships and transactions of which we are aware.
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- The company has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral.
- Information about financial instruments with off-balance-sheet risk and financial instruments (including receivables) with concentrations of credit risk have been properly disclosed.
- We have no plans or intentions that may materially affect the carrying value or classification of assets and liabilities.
- We have complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
- We understand and acknowledge our responsibility for the fair presentation of the (Schedule I, Statement of Net Capital Under Rule 15c3-1, Schedule II, Determination of Determination of Reserve Requirements Under Rule 15c3-3 (exemption), and Schedule III, Information for Possession or Control Requirements Under Rule 15c3-3 (exemption)) in accordance with U.S. GAAP and Rule 17a-5 of the Securities and Exchange Act of 1934. We believe the Statement of Net Capital, Determination of Reserve Requirements, Information Relating to Possession or Control, and SIPC Form 7, including its form and content, is fairly presented in accordance with U.S. GAAP and SEC Rule 17a-5. The methods of measurement and presentation of the Statement of Net Capital, Determination of Reserve Requirements, Information Relating to Possession or Control, and SIPC Form 3 have not changed from those used in the prior period. The form and content of Statement of Net Capital, Determination of Reserve Requirements, Information Relating to Possession or Control, and SIPC Form 3 complies, in all material respects, with the regulatory requirements of SEC Rule 17a-5. We are responsible for, and have disclosed to you, any significant assumptions or interpretations underlying the measurement and presentation of the supplemental information, and we believe that those assumptions or interpretations are appropriate.
There have been no regulatory examination reports, supervising correspondence, or similar materials received from applicable regulatory agencies, including communications concerning supervisory actions or noncompliance with, or deficiencies in, rules, regulations, or supervisory actions during the year ended January 31, 2022 or through March 18, 2022
- There are no capital withdrawals anticipated within the next six months other than in the ordinary course of business.
- We are responsible for establishing and maintaining adequate internal control for safeguarding the Company's securities and for the practices and procedures relevant to the objectives stated in SEC Rule 17a-5(g), including making periodic computations of aggregated indebtedness (or aggregate debits) and net capital under Rule 15c3-1 and for maintaining compliance with the exemptive provisions of Rule 15c3- 3. Because the Company does not carry securities accounts for customers or perform custodial functions relating to customer securities, we do not maintain practices and procedures related to the following:
- o Making quarterly securities examinations, counts, verifications, and comparisons, and recording the differences as required by Rule 17a-13.
- o Complying with the requirements for prompt payment for securities under Section 8 of Federal Reserve Regulation T of the Board of Governors of the Federal Reserve System.
We believe that our practices and procedures were adequate at January 31, 2022 to meet the SEC's objectives. There have been no significant changes in internal control since January 31, 2022.
• We acknowledge our responsibility for compliance with the identified exemption provisions throughout the year, and our assertions. We have made available to you all records and other information relating to our assertions, including communications from regulatory agencies, internal auditors, and others who perform equivalent functions and compliance functions concerning possible exceptions to exemption provisions through the date of the review report. There have been no known events or other factors subsequent to the period addressed in our assertions that might significantly affect our compliance with the identified exemption provisions.
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The Company has been in compliance with the exemptive provisions of SEC Rule 15c3-3 at all times during the year ended January 31, 2022 and through March 18, 2022.
- Net capital computations prepared by us during the period February 1, 2019 through March 18, 2022 indicated that we were in compliance with the requirements of The Net Capital Rule (SEC Rule 15c3-1) at all times during the period. The Company is not subject to, and did not prepare, a calculation for the reserve requirements of SEC Rule 15c3-3.
- There were no significant deficiencies, material weaknesses, or material inadequacies at January 31, 2022 or during the period February 1, 2020 through March 18, 2022, in internal control over financial reporting and control activities for safeguarding the Company's securities (as well as other assets), and the practices and procedures followed in making periodic computations of aggregate indebtedness (or aggregate debits) and net capital as defined in accordance with the Net Capital Rule (SEC Rule 15c3-1).
- The Company did not owe the PCAOB any accounting support fees for the year ended January 31, 2022
- We are aware of the requirements regarding expense-sharing agreements as specified in SEC Rule 15c3-1(a)(2)(i)(F) and the July 11, 2003, letter issued by the Securities and Exchange Commission, Division of Market Regulation. We believe that the Company has sufficient documentation necessary to verify the financial independence of the affiliated entity assuming the Company's liabilities, has appropriately recorded all expenses relative to the operation of its business, and is in compliance with the Rule and the requirements stipulated in the letter.
No events have occurred subsequent to the balance sheet date and through the date of this letter that would require adjustment to, or disclosure in, the financial statements.
Signature:
Title: Chief Financial Officer
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**BRIAN W. ANSON**
*Certified Public Accountant* 18455 Burbank Blvd., Suite 404, Tarzana, CA 91356 • Tel. (818) 636-5660 • Fax (818) 881-2605
# **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
Board of Directors Liberty Associates, Inc. New York, New York
I have reviewed management's statements, included in the accompanying Liberty Associates, Inc., Exemption Report in which (1) Liberty Associates, Inc. identified the following provisions of 17 C.F.R. § 15c3-3(k) under which Liberty Associates, Inc. claimed an exemption from 17 C.F.R. §240. l 5c3-3: (k)(2)(ii) (the "exemption provision") and 2 Liberty Associates, Inc. stated that Liberty Associates, Inc. met the identified exemption provision throughout the most recent fiscal year without exception. Liberty Associates, Inc.'s management is responsible for compliance with the exemption provision and its statements.
My review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and accordingly, included inquiries and other required procedures to obtain evidence about Liberty Associates, Inc. 's compliance with the exemption provision. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, I do not express such an opm1on.
Based on my review, I am not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934.
Bnan W. Anson Certified Public Accountant Tarzana, California March 18, 2022
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.