# SKB SECURITIES, LLC X-17A-5 (2020-02-19) — Broker-dealer annual report

- Company: SKB SECURITIES, LLC
- Form: X-17A-5
- Filed: 2020-02-19
- Period: 2019-12-31
- Accession: 0000946634-20-000001
- CIK: 946634
- File #: 8-48390
- Material weakness: No
- Auditor: Geffen Mesher & Company
- Auditor location: Portland, OR
- Contact: George C. Schreck
- Phone: 5032202600
- Signed by: GEORGE C. SCHRECK (Chief Financial Officer)

Original filing: https://www.sec.gov/Archives/edgar/data/946634/000094663420000001/2019skbsecurities3.pdf

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## **5KB SECURITIES, LLC**

FORM X-17A-5 PART IIA OF THE Focus REPORT OF THE SECURITIES AND EXCHANGE COMM ISSION YEAR ENDED DECEMBER 31, 2019 (WITH INDEPENDENT AUDITORS<sup>1</sup>REPORT)

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|                                                                                                                                                                              | tiNll'Et.>STATltS<br>SECURJTtF.SANll tXCliANGl>:CO.MMfSSf(}N<br>\-\'il,hlngtoli; O.C, 2US4!1 |                       | ,, •. ~- ciMtfAPl-1101/ACh~ -1<br>Ol.11l 14i;m!::et<br>(xpi«:11;<br>~ii,nat;,tl ·-~ge b,,.rd-.,n | ,235.012; •<br>August 31. ;w,20                                      |  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|-----------------------|--------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|--|
|                                                                                                                                                                              | FORM X-17A-5<br>PART UI                                                                      | ANNUAL AUDITED REPORT |                                                                                                  | l!OOrS' )()He\$POO\$q., •. 12.00<br>I SEC AL~ NUM\$\:ft)<br>fs.411s2 |  |
| lnform:irfon Required of Broken and Dealers P'ursu:mt lo Section 17 oftlle                                                                                                   | .FACING PAGE<br>Securities .Exc:hangr .Act of 1934 :n:td Ruh: I 7a~.S Tben:uuditt            |                       |                                                                                                  |                                                                      |  |
| llcfO!n FO!t THE: f'EIUOl)                                                                                                                                                   |                                                                                              |                       | AND ENDING 12/31/19                                                                              | --                                                                   |  |
|                                                                                                                                                                              |                                                                                              |                       |                                                                                                  |                                                                      |  |
|                                                                                                                                                                              | A, REClSTRAN1" IDENTIFlCAl'ION                                                               |                       |                                                                                                  |                                                                      |  |
| NAME oF aRoKER·DEALER, SKB Securities, LLC                                                                                                                                   |                                                                                              |                       |                                                                                                  |                                                                      |  |
| AJ)l>RESS or f'lUNCfl'AL i'LACE. ()I' HOSINFSS: H><, 11,,1 0\$1) Po. ll;;i~ NiP                                                                                              |                                                                                              |                       |                                                                                                  | Ftl'!MW. NO.                                                         |  |
| 222 S.W. Columbia Street, Suite 700 -                                                                                                                                        | -------------------                                                                          |                       |                                                                                                  |                                                                      |  |
|                                                                                                                                                                              |                                                                                              |                       |                                                                                                  |                                                                      |  |
|                                                                                                                                                                              |                                                                                              |                       |                                                                                                  |                                                                      |  |
| NA ME AND TE.U}Pl'IONE Nl.JMfH:R OF l".ERSON TO CONTACT 1N REClARD TO THIS: REl'ORT<br>_G011J,;,scte  '"i<{SOSl 56_2_.:;_ll_rs _________ ==                                  | --                                                                                           |                       |                                                                                                  |                                                                      |  |
|                                                                                                                                                                              | H, ACCOUNTANT IDENTIFICATION                                                                 |                       |                                                                                                  |                                                                      |  |
| !NDEPENt>HNT PIJllUC ACCOUN"fAN 'r whose ttphtklh is o;:,)Mained trl ilds Rt:p,'l<l1•<br>Geff~?:er & ~-0~pany, P,C,                                                          | --·<br>fNat~ -· -./ mJJ;,-iJu,1t ,~tl' t:!-'i',\ fi.1''i't:. ,.,r~l,i/, il1l.W.t')           | -··-·                 | ~<br>·----<br>-<br>-                                                                             | ---                                                                  |  |
| 888 Fifth Avenue, Suite 800                                                                                                                                                  | Portland                                                                                     |                       |                                                                                                  | 97204                                                                |  |
|                                                                                                                                                                              |                                                                                              |                       |                                                                                                  |                                                                      |  |
| CIIIICK ONt::<br>~<br>Cem (ied Public Acrnuntnnl<br>B<br>!'uhh c .,\cc<>11n1.mt<br>•  .<br>~-<br>Acc<.mn1am no! l'<'sidei11 in Umtci.l States. or any of it, 1><,sse-,sin-,n |                                                                                              |                       |                                                                                                  |                                                                      |  |
|                                                                                                                                                                              | ~  JOFLOF-FlqfA,._JISJ: OftLY__                                                              | ,<br>,                | ··--···. 1                                                                                       |                                                                      |  |
| I<br>•('fuims jrw ,\U"v~ri,:m.J,rmr /Ji,• rr quin:m!t.lf! tlwrt Ilic ammal r¢t;<.'W lrc c,t,·etY;.,;i by 1/i!J W)l~im, ,,f,m bt<fl!:per,,rknl p1th!ir., accor,m,~m           |                                                                                              |                       |                                                                                                  | I                                                                    |  |

**SEC 1410 {11-05)** 

**Potential personll who are le nt&pond to tt,o c:oUeclion ol lntormstlon contained In lltla form are nM required 10 rospo11d unless lhe fomi dhiplalfll a currenlfy valid 0MB control numb et.** 

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#### **OATH OR APPIRMATION**

|                                                                                                                                                                                                                                               | ·--·····-<br>OATH OR APPIRMATION                                                                                                                                                                                                                                                      |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
| (. -~~~~'!ck~.,-------·                                                                                                                                                                                                                       | ·, '""Mr for 1iffirm·1 urn1, w 1he: bes, ,o[                                                                                                                                                                                                                                          |  |
| __<br>SKB Sewntk,.,;, LLC                                                                                                                                                                                                                     | my k11n1wkdge ~nd belief 1he 11¢;:,Hnt>sinying finnndal ,11ncan~1H and 311 p11<miog. l1Cllcdulcs pen11.lniug lo th.: firm uf                                                                                                                                                          |  |
|                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                       |  |
| n;:Hlwr u,, ~-omf1'my nm· any P'*rtncr, propric1ur, r,d,.dpal officer or dkcctor has n.ny pm:l}rietary mrcrc~t ht Ml}' il<br>d a,ssjfi.,J l\1Jkly ~ tl1il l ;;[ II CLlih>tnCf, C)CCCpi ilN folbows:                                           | Ctmint                                                                                                                                                                                                                                                                                |  |
|                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                               | Chief Fin.;,ncial Officer                                                                                                                                                                                                                                                             |  |
|                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                       |  |
| i hi~ report ~• ,tm rn i,,~ (di~"<l);; au api>Hccit-flc ~ox;;~).<br>EJ 1.1) f;1,;in g P<>gt<br>12] jli) SV!km<enl of Filt,llldlll Cmnfo.i,;,n.<br>,,! Ciltt,r:,rel!e:iisive h1.:-0m(' (llo. defined in §lWcl-02' a( R~g11.!a1imt S-X).        | Ol"FIGli',L STAMP<br>IHA.RON LOOFBIJRROW<br>~t<br>NOTARY l'Ul'ILIC. oaeaoN<br>COMl.liSSIQN NO,<br>MY'OOI.US\$0N EXPif€3fl~i;![\\1E~ 11, ~1<br>0 kJ s,~1.:mcm of lnc,;mc tL.os:>) or, if there 1s· other c11mpn:hon~1 ft'. lnoumc in Hie (!Cl'fo'>i(c,J pr,~s.::ni,:,d, a Statell\Cll! |  |
| (d) Sl~lclilll'm of Ch.a1t1NS iii Fhi.;ncial Canditi.:m.                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                       |  |
| <1r.) Smtnitn1 (,f Ch,~111.1e~ im Su,ck!1<>hl;:,r~· Equity cu ? ottRN'.i' or Sole l"ropri;,iol'!i' Cl1pital.<br>(fi S!~km,ttit (>f Ch~11gc:~ m Uabili1ies S11b<>iilinutcd 10 Cliiili'tt M C,editars.<br>~<br>(g) Compui~titH1 of Net C~pit1tL |                                                                                                                                                                                                                                                                                       |  |
| (h) Com11u11&tio11 for Oatcrmmation crfRcsci,,c Rc,quiremclil:l. 1'11 rs11a11t 10 Rule l5c3<i.                                                                                                                                                |                                                                                                                                                                                                                                                                                       |  |
| (fl lnfl1rm11Ho11 R.:l.ati11€: 10 the l'o,wssion or Control Rcqu ircml!'Jlls Under Rufo I ~~3-l<br>~                                                                                                                                          | 0 (J l A Rc-1:,">ndliait1011,, i.nchidmg ~Jlp.fOJlt line c;,;pl;li!~tio11 of the Cimipmathm orN~t Cllpi111l Urnfor Rule I 5d -I ,md the                                                                                                                                               |  |
| C,:mirmati,m for lktcr:min~!ion of th.: R,,s;:cn'c Rcq uircrncnl~ Under E  d1ibit A. of Ruk l Sc.3-3 .                                                                                                                                        |                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                               | 0 (}{ ) A Rcci.widlitttion bretwe,:n tht• ~1ud!Jcd a:nll n:nuudiled Sfal.l.Nncurs nf f lin.;,i:iu:ud Cont1ition with n.:s.:p~1.-;I to m:cl.hoJs of                                                                                                                                    |  |
| (<br>~l.)H~-t\tiidwtfm~,<br>I J i\11 Ott th nr :\ ff1m111tiim.                                                                                                                                                                                |                                                                                                                                                                                                                                                                                       |  |
| §<br>{m) A copy ,,f tltc :S[l'C :Stjppkm,m1,1I R~11ort.                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                               | f.11 i i\ report dcs.:dbi.111;1. an}' UHH1:d i'il in~d-<!qYi.ld ~,: found IAl ~:ti,f ,,,. foul!d w have existed ,;ince :!ut dim.• of tbc prevlous 11ui1J1.                                                                                                                            |  |

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888 SW 5TH AVENUE . SU ITE 800. PO RTLA ND. OR 97204 tel 503-22 1-0 141 I fax 503 -22 7-7924 I GMCOCOM

GeffenMesher

#### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Member 5KB Securities, LLC Portland, Oregon

#### **Opinion on Financial Statements**

We have audited the accompanying statement of financial condition of 5KB Securities, LLC as of December 31, 2019, the related statements of operations, changes in member's equity, and cash flows for the year then ended, and the related notes and supplemental information (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of SKB Securities, LLC as of December 31, 2019, 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 SKB Securities, LLC's management. Our responsibility is to express an opinion on SKB Securities, LLC's financial statements 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 SKB Securities, LLC 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 statements are 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 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. Our audit also included evaluating the accounting principles used and significant estimates made by man.igement, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

#### **Auditor's Report on Supplemental Information**

The supplemental schedule of computation of net capital under Rule 15c3-1 has been subjected to audit procedures performed in conjunction with the audit of SKB Securities, LLC's financial statements. The supplemental information **is**  the responsibility of Sl<B Securities, LLC's management. Our 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 our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240. l 7a-5. In our opinion, the supplemental schedule of computation of net capital under Rule 15c3-1 is fairly stated, in all material respects, in relation to the financial statements as a whole.

**i t ,~,,,:;e~::,:],o,~~2004.** 

January 31, 2020 Portland, Oregon

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| December 31, 2019                                       |                        |
|---------------------------------------------------------|------------------------|
| ASSETS                                                  |                        |
| Cash<br>Due from related party                          | \$<br>20,840<br>4,681  |
| Prepaid expenses                                        | \$<br>24,972<br>50,493 |
| LIABILITIES AND MEMBER'S EQUITY<br>Due to related party | \$<br>873              |
| Member's equity                                         | 49,620                 |
|                                                         | \$<br>50,493           |

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#### **Vear Ended December 31, 2019**

| Revenue:                                     |     |          |
|----------------------------------------------|-----|----------|
| · Placement fees & contingent placement fees | \$  | 140,375  |
|                                              |     |          |
| Expenses                                     |     |          |
| Comm issions                                 |     | 62,408   |
| Filing Fees                                  |     | 9,486    |
| Escrow Bank Fees                             |     | 4,008    |
| Regulatory fees                              |     | 23,264   |
| Website operating fees                       |     | 25,992   |
| Professional fees                            |     | 34,908   |
| Administrative services                      |     | 188,688  |
| Insurance                                    |     | 116,964  |
| Rent                                         |     | 9,240    |
| Equipment expense                            |     | 16,247   |
| Telephone                                    |     | 2,472    |
| Office expense                               |     | 4,209    |
| Taxes and licenses                           |     | 646      |
|                                              |     |          |
|                                              |     | 498,532  |
|                                              |     |          |
| Net loss                                     | (\$ | 358,157) |
|                                              |     |          |

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#### **SKB** SECURITIES, LLC STATEMENT OF CHANGES IN MEMBER'S EQUITY

|                            | Member's<br>equity |
|----------------------------|--------------------|
| Balance, January 1, 2019   | \$<br>157,857      |
| Net loss                   | (358,157)          |
| Member contributions       | 249,920            |
| Balance, December 31, 2019 | \$<br>49,620       |

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#### **SKB SECURITIES, LLC STATEMENT OF CHANGES IN CASH FLOWS**

## **Year Ended December 31, 2019**

| Cash flows from operating activities               |     |          |
|----------------------------------------------------|-----|----------|
| Net loss                                           | (\$ | 358,157) |
| Adjustments to reconcile net loss to net cash used |     |          |
| in operating activities                            |     |          |
| Expenses paid on behalf of the company             |     | 249,920  |
| Change in operating assets and liabilities         |     |          |
| Due from related party                             |     | 4,681)   |
| Prepaid expenses                                   |     | 994      |
| Accrued liabil ities                               |     | 24,611)  |
| Due to related party                               |     | 13,605)  |
|                                                    |     |          |
| Net cash used in operating activities              |     | 150,140) |
|                                                    |     |          |
| Net change in cash                                 |     | 150,140) |
|                                                    |     |          |
| Cash at beginning of year                          |     | 170,980  |
|                                                    |     |          |
| Cash at end of year                                | \$  | 20,840   |

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#### **SKB SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS**

#### **YEAR ENDED DECEMBER 31, 2019**

## **1. Line of business and summary of significant accounting policies**

#### **Line of business**

SKB Securities, LLC (the "Company"), is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is located in Portland, Oregon and provides real estate investment banking services to customers throughout the United States.

#### **Use of estimates**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates based on assumptions about current and, for some estimates, future economic and market conditions that affect the reported amounts of assets and liabilities and related 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. Although the Company's estimates contemplate current conditions and how management expects them to change in the future, as appropriate, it is reasonably possible that future conditions could be different than anticipated in those estimates, which could materially affect the Company's results of operations and financial position.

#### **Revenue recognition**

Placement fee & contingent placement fee revenue are fees earned for the private placement of debt and equity securities and related back-end commissions earned on those placements and are recorded based upon the terms of the agreement for each transaction. Placement fees are generally earned at a rate of 3% of equity raised from outside investors and are recognized by and paid to the Company upon the closing of an investment project and corresponding purchase of a real estate asset. Contingent placement fee revenue is earned at varying rates and is recognized by and paid to the Company upon the closing of a sale of a real estate asset. The Company believes that the participation income and related back-end commissions are not known nor do they exist until the closing of a real estate asset sale because that is when the real estate sales price is determ ined. This in turn determines whether any participation income and re lated back-end commissions are earned, as well as the amount, if any.

During the year ended December 31, 2019, the Company recognized placement fee revenue of \$109,110 and contingent placement fee revenue of \$31,265.

#### **Concentration of credit risk**

The Company has cash in bank deposit accounts which may exceed depository insurance limits from timeto-time. The Company has not experienced any losses in such accounts. The Company's cash balance did not exceed insurance limits in 2019.

#### **Income taxes**

The Company is a single member LLC and as such, it does not file a separate tax return; rather, its income and expenses are included in the tax returns of its member. The Company records income taxes following the separate return allocation method. This method allocates income taxes for the Company as if it were a separate taxpayer from its member. With the exception of local income taxes, the Company is not subject to Income taxes. Management evaluates tax positions taken by the Company and recognizes a tax liability (or asset) if the Company has taken an uncertain position that more likely than not would not be sustained upon examination by taxing authorities.

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## **SKB SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS**

## **YEAR ENDED DECEMBER 31, 2019**

## **Subsequent events**

The Company has evaluated subsequent events through January 31, 2020 which is the date these financial statements were available to be issued. Events, if any, are disclosed within the notes to these financial statements.

#### **2. Net capital requirements**

The Company is subject to the SEC Uniform Net Capital Rule 15c3-l, which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2019, the Company had net capital of \$19,967, which was \$14,967 in excess of its required net capital of \$5,000. The Company's ratio of aggregate indebtedness to net capital ·was .04 to 1.

## **3. Related party transactions**

The Company is a single member LLC, wholly-owned by ScanlanKemperBard Companies ("SKB"). SKB is engaged in real estate merchant banking, development and investment. During 2019, the Company earned 100% of its placement fees in deals in which SKB was the operating manager.

Under a facilities-sharing agreement, 5KB provides the Company with administrative services, computer equipment and software, facilities, equipment and supplies. In consideration of the services and resources, the Company either pays 5KB a monthly payment or accepts a capital contribution based upon mutually agreed pro rata amounts as described in the facilities sharing agreement. 5KB charged the Company approximately \$375,000 in 2019 which \$250,000 was treated as capital contributions to the Company.

## **4. Going concern and related party support**

The Company has experienced operating losses and negative cash flows from operations for four consecutive years. The major part of the Company's working capital requirements is provided by 5KB. 5KB is reliant upon the Company's function as a broker dealer in order to continue with its primary operations. 5KB has committed to fund the Company's net capital needs, should it be required. Having considered this and made due inquiries, the Company's management has determined 5KB possesses the financial capabilities to fulfill its commitment and continues using the going concern basis of accounting in preparing the financial statements which assumes the Company will continue in operation for the foreseeable future.

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#### SUPPLEMENTARY INFORMATION

#### **SKB** SECURITIES, LLC **COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION**

| December 31, 2019                              |           |        |
|------------------------------------------------|-----------|--------|
|                                                |           |        |
| Net capital                                    |           |        |
| Total member's equity                          | \$        | 49,620 |
|                                                |           |        |
| Less nonallowable asset                        |           |        |
| Prepaid expenses and related party receivable  |           | 29,653 |
|                                                |           |        |
| Net capital                                    | \$        | 19,967 |
|                                                |           |        |
| Aggregate indebtedness                         | \$        | 873    |
|                                                |           |        |
| Computation of basic net capital requirements  |           |        |
| Minimum net capital required                   | \$        | 5,000  |
|                                                |           |        |
| Excess net capital                             | \$        | 14,967 |
|                                                |           |        |
| Ratio of aggregate indebtedness to net capital | 0.04 to 1 |        |

**Note:** There are no material differences between the preceding computation and the Company's corresponding unaudited Part II of Form X-17A-5 as of December 31, 2019.

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## **SKB SECURITIES, LLC EXEMPTION FROM RESERVE REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION**

#### **YEAR ENDED DECEMBER 31, 2019**

#### **Exemptive provisions**

The Company is claiming an exemption from Rule 15c3-3 under subsection (k)(2)(i) as the Company carries no margin accounts, promptly transmits all customer funds and delivers all securities received in connection with its activities as a broker or dealer, does not otherwise hold funds or securities for, or owe money or securities to, customers and effectuates all financial transactions between broker or dealer and its customers through one or more bank escrow accounts where funds are designated as a special account for the exclusive benefit of the issuer of the securities being sold by the Company.

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888 SW 5TH AVENUE. SU ITE 800, PORTLAND , OR 9720 4 tel 503-221-0141 I fax 50 3-2 27-7924 I GMCO COM

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# GeffenMesher

#### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Member SKB Securities, LLC Portland, Oregon

We have reviewed management's statements, included in the accompanying Exemption Report required by SEC Rule 17a-5, in which (1) SKB Securities, LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which SKB Securities, LLC claimed an exemption from 17 C.F.R. §240.1Sc3-3 under the provision (2)(i) "Customer protection-Reserves and Custody of Securities" and (2) SKB Securities, LLC stated that SKB Securities, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. SKB Securities, LLC's management is responsible for compliance with the exemption provisions and its statements.

Our 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 SKB Securities, LLC's compliance with the exemption provisions. 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, we do not express such an opinion.

Based on our review, we are 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)(i) "Customer Protection-Reserves and Custody of Securities" of Rule 15c3-3 under the Securities and Exchange Act of 1934.

January 31, 2020 Portland, Oregon

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## SKB SECURITIES

Ml'MGER FINRA A St BS!DiARY OF SCANLANKEMPERLl.•\RD CO\IFANIES

#### January 22, 2020

Securities Exchange Commission I 00 F Street, NE Washington, DC 20549

RE; Exemption Report for SEC Rule l 5c3-3

To the SEC:

In accordance with SEC Rule l 5c3-3, SKB Securities, LLC. ("SKB") hereby is claiming an exemption from Rule l 5c3-3 under subsection (k)(2)(i), based on the following representations:

- **SKB** Securities carries no margin accounts, promptly transmits all customer funds and delivers all securities received in connection with its activities as a broker or dealer, does not otherwise hold funds or securities for, or owe money or securities to, customers and effectuates all financial transactions between the broker or dealer and its customers through one or more bank escrow accounts where funds are designated as a special account for the exclusive benefit of the issuer of the securities being sold by SKB Securities.
- SKB Securities has met the identified exemption provisions throughout the most recent fiscal year without exception.

We assume that this adequately addresses the requirements for the exemption under Rule I5c3-3; however, should you have any questions, please contact me at (503) 552-3579 or by e-mail at gschreck(w,skbcos.com.

Sincerely, George C. chreck

Chief Financial Officer General Counsel Chief Compliance Officer

\V\V\V.SKBCOS.COM


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