# FINTRUST BROKERAGE SERVICES, LLC X-17A-5 (2020-02-26) — Broker-dealer annual report
- Company: FINTRUST BROKERAGE SERVICES, LLC
- Form: X-17A-5
- Filed: 2020-02-26
- Period: 2019-12-31
- Accession: 0001020141-20-000001
- CIK: 1020141
- File #: 8-49514
- Material weakness: No
- Auditor: GOLDMAN & COMPANY CPAS PC
- Auditor location: MARIETTA, GA
- Contact: ALLEN GILLESPIE
- Phone: 864-288-2849
- Signed by: ALLEN GILLESPIE (PRINCIPAL)
Original filing: https://www.sec.gov/Archives/edgar/data/1020141/000102014120000001/ftbs2.pdf
---
{0}------------------------------------------------
**UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C. 20549**
0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours oerresponse ...... 12.00
## **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill**
| SEC FILE NUMBER |
|-----------------|
| &-49514 |
**FACING PAGE**
**Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder**
| | MM/DD/YY | | ----------
MM/DD/YY |
|---------------------------------------------------------------------------|--------------------------------------------------------|-------------------|--------------------------------|
| | A. REGISTRANT IDENTIFICATION | | |
| NAME OF BROKER-DEALER: FINTRUST BROKERAGE SERVICES, LLC | | OFFICIAL USE ONLY | |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | FIRM I.D. NO. | |
| 124 VERDAE BLVD, SUITE 504 | | | |
| | (No. and Street) | | |
| GREENVILLE | SC | | 29607 |
| (City) | (State) | | (Zip Code) |
| NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | |
| ALLEN GILLESPIE | | | 864-288-2849 |
| | | | (Area Code _ Telephone Number) |
| | B. ACCOUNTANT IDENTIFICATION | | |
| INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* | | | |
| GOLDMAN & COMPANY CPAS PC | | | |
| | (Name - if individual, state last, firs/, middle name) | | |
| 3535 ROSWELL RD | MARIETTA | GA | 30062 |
| (Address) | (City) | (State) | (Zip Code) |
| CHECK ONE: | | | |
| I | | | |
| ✓
certified Public Accountant | | | |
| Public Accountant | | | |
| B
Accountant not resident in United States or any of its possessions, | | | |
| | FOR OFFICIAL USE ONLY | | |
| | | | |
*\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17 a-5 (e) (2)*
> **Potential 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.**
SEC 1410 (06-02)
{1}------------------------------------------------
#### **OATH OR AFFIRMATION**
I, \_A\_L\_L\_E\_N\_G\_I\_L\_L\_E\_S\_P\_IE \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ , swear (or affirm) that, to the best of
my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of FINTRUST BROKERAGE SERVICES, LLC ---------------------------------- ----------, as of DECEMBER 31 are true and correct. I further swear (or affirm) that
neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as follows:
This report"'\* contains (check all applicable boxes): 0 (a) Facing Page. ✓ (b) Statement of Financial Condition. ✓ (c) Statement of Income (Loss). ✓ (d) Statement of Changes in Financial Condition. Signature ·p */!.(* ;LJC I ? /J~ Title ✓ (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. ✓ (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. ✓ (g) Computation of Net Capital. (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. ✓ (i) Information Relating to the Possession or Control Requirements Under Rule l 5c3-3. @ (j) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule 15c3-1 and the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. **0 (k) A** Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of consolidation. 121 ✓ (I) An Oath or Affirmation. **121** (m) A copy of the SIPC Supplemental Report. D (n) A report describing any material inadequacies found to exist or found to have existed si nee the date of the previous audit.
*\*\*For conditions of confidential treatment of certain portions of this filing, see section 2 40.17 a-5 (e)* (3 ).
{2}------------------------------------------------
(A LIMITED LIABILITY COMPANY)
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
{3}------------------------------------------------
(A LIMITED LIABILITY COMPANY)
### **Table of Contents**
| Independent Registered Auditor's Report……………………………………………………1 | |
|-----------------------------------------------------------------------------------------------------------------------|--|
| Financial Statements | |
| Statement of Financial Condition………………………………………………………2 | |
| Statement of Operations……………………………………………………………… 3 | |
| Statement of Changes in Member's Equity …………………………………………4 | |
| Statement of Changes in Subordinated Liabilities …………………………………5 | |
| Statement of Cash Flows………………………………………………………………6 | |
| Notes to Financial Statements…………………………………………………………………7 | |
| Supplementary Schedule I - Computation of Net Capital………………………………… 10 | |
| Supplementary Schedules II and III………………………………………………………… 11 | |
| Independent Accountant's Report on Exemption……………………………………………12 | |
| Exemption Report………………………………………………………………………………13 | |
| Independent Accountant's Report on Agreed Upon
Procedures Related to SIPC Assessment Reconciliation…………………………………14 | |
| SIPC General Assessment Reconciliation Form SIPC-7………………………………… 15 | |
{4}------------------------------------------------
#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Member of Fintrust Brokerage Services, LLC
#### **Opinion on the Financial Statements**
We have audited the accompanying statement of financial condition of Fintrust Brokerage Services, LLC as of December 31, 2019, the related statements of operations, changes in member's equity, statement of changes in subordinated liabilities, cash flows for the year then ended, and the related notes and schedules 1, 2 and 3 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Fintrust Brokerage Services, LLC as of December 31, 2019, and the results of its operations and its cash flows for the period 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 Fintrust Brokerage Services, LLC 's management. Our responsibility is to express an opinion on Fintrust Brokerage Services, 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 the company 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 management, 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 Schedule's 1- Computation of Net Capital Under SEC Rule 15c3-1, Schedule 2-Computation for Determination of Reserve Requirements Pursuant to SEC Rule 15c3-3 (exemption) and Schedule 3- Information Relating to Possession or Control Requirements Pursuant to SEC Rule 15c3-3 (exemption) have been subjected to audit procedures performed in conjunction with the audit of Fintrust Brokerage Services, LLC's financial statements. The supplemental information is the responsibility of Fintrust Brokerage Services, 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. §240.17a-5. In our opinion, the schedule's 1, 2. and 3 are fairly stated, in all material respects, in relation to the financial statements as a whole.
We have served as the Company's auditor since 2015.
Goldman & Company, CPA's, P.C. Marietta, Georgia February 25, 2020
{5}------------------------------------------------
(A LIMITED LIABILITY COMPANY)
#### **STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019**
#### **ASSETS**
| ASSETS: | | |
|---------------------------------|---------|---------|
| Cash and cash equivalents | \$ | 175,602 |
| Deposit with clearing broker | | 75,000 |
| Receivable with clearing broker | | 24,654 |
| Investment | | 40,000 |
| Accounts receivable | | 10,000 |
| Due from parent | | 360,136 |
| Prepaid expenses | | 13,960 |
| Total assets | I | 699,352 |
| TOTAL | I
\$ | 699,352 |
| | | |
#### **LIABILITIES AND MEMBER'S EQUITY**
| LIABILITIES | | |
|-----------------------------------------|---------|---------|
| Accounts payable | \$ | 550 |
| Due to clearing broker | | 10,742 |
| Payroll payable | | 56,084 |
| Subordinated loan - secured demand note | | 40,000 |
| | | |
| Total liabilities | I | 107,376 |
| | | |
| MEMBER'S EQUITY | I | 591,976 |
| | | |
| TOTAL | I
\$ | 699,352 |
| | | |
The accompanying notes are an integral part of these financial statements.
{6}------------------------------------------------
(A LIMITED LIABILITY COMPANY)
#### **STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2019**
| COMMISSION AND FEE REVENUE | I
\$
1,759,840 |
|------------------------------------------|----------------------|
| | |
| OPERATING EXPENSES: | |
| Compensation and benefits | 967,670 |
| Rent | 48,267 |
| Regulatory licensing and compliance fees | 25,012 |
| Legal and professional fees | 89,828 |
| Travel | 14,272 |
| Computer and technology | 81,991 |
| Meals and entertainment | 6,215 |
| Telephone | 5,541 |
| Taxes and licenses | 3,885 |
| Insurance | 12,167 |
| Clearing expense | 135,733 |
| Other | 141,546 |
| | |
| Total expenses | I
\$
1,532,127 |
| | |
| NET INCOME | I
\$
227,713 |
| | |
The accompanying notes are an integral part of these financial statements.
3
{7}------------------------------------------------
(A LIMITED LIABILITY COMPANY)
#### **STATEMENT OF CHANGES IN MEMBER'S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2019**
| MEMBER'S EQUITY, JANUARY 1 | \$ | 364,263 |
|------------------------------|---------|---------|
| Net Income | | 227,713 |
| MEMBER'S EQUITY, DECEMBER 31 | I
\$ | 591,976 |
| | | |
The accompanying notes are an integral part of these financial statements.
4
{8}------------------------------------------------
(A LIMITED LIABILITY COMPANY)
#### **STATEMENT OF CHANGES IN LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS FOR THE YEAR ENDED DECEMBER 31, 2019**
| SUBORDINATED LOANS, JANUARY 1 | \$ | 40,000 |
|---------------------------------|---------|--------|
| SUBORDINATED LOANS, DECEMBER 31 | I
\$ | 40,000 |
| | | |
The accompanying notes are an integral part of these financial statements. 5
{9}------------------------------------------------
(A LIMITED LIABILITY COMPANY)
#### **STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2019**
| OPERATING ACTIVITIES:
Net profit | \$ | 227,713 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|----------------------------------------|
| Adjustments to reconcile net income to net cash
provided by operating activities
Decrease in clearing broker receivable
Decrease in accounts receivable
Increase in due from parent
Decrease in prepaid expenses | | 40,071
50,062
(235,822)
1,500 |
| Increase in payroll payable and accounts payable
Decrease in due to clearing broker | | 5,277
6,754 |
| Net cash provided by operating activities | I | 95,555 |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | I | 95,555 |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | | 80,047 |
| CASH AND CASH EQUIVALENTS AT END OF YEAR | I
\$ | 175,602 |
The accompanying notes are an integral part of these financial statements.
6
{10}------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
#### **1. ORGANIZATION AND NATURE OF BUSINESS**
FinTrust Brokerage Services, LLC, a South Carolina limited liability company, is a registered broker-dealer in securities with the Securities and Exchange Commission (the "SEC") and is a member of various exchanges and the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company received its approval for membership on January 2, 1997.
Since the Company is a limited liability company, the member is not liable for the debts, obligations, or liabilities of the Company, whether arising in contract, tort or otherwise, unless the member has signed a specific guarantee.
#### **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
#### Basis of Accounting
The Company maintains its books and records on the accrual basis of accounting for financial reporting purposes, which is in accordance with U.S. generally accepted accounting principles and is required by the SEC and FINRA.
#### 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 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.
#### Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Company defines cash equivalents as highly liquid investments with original maturity dates of less than ninety days that are not held for sale in the ordinary course of business.
#### Revenue from Contracts with Customers
#### *Significant Judgements*
Revenue from contracts with customers includes commission income and fees from commissions. 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.
Mutual Funds or pooled investment vehicles (collectively, "funds") have entered into agreements with the Company to distribute/sell its shares to investors. Fees are paid up front and over time (12b-1 fees) on the basis of a contractual rate applied to the monthly or quarterly market value of the fund (that is, net asset value [NAV]), the fund may also pay, upon investor exit from the fund (that is, a contingent deferred sales charge [CDSC]), or as a combination thereof. Revenue is recognized monthly as services are provided.
#### *Brokerage Commissions*
The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership of the securities have been transferred to/from the customer.
{11}------------------------------------------------
#### Income Taxes
The Company is a limited liability company taxed as a partnership for income tax reporting purposes and as such, is not subject to income tax. Accordingly, no provision for income taxes is provided in the financial statements. The members report the Company's taxable income or loss on their respective tax returns. The Company has adopted provisions of ASC 740-10, Accounting for Uncertainty in Income Taxes. Under ASC 740-10 the Company is required to evaluate all of its tax positions to determine if they are more likely than not to be sustained upon examination. A tax position includes the entity's status. The Company believes it has no uncertain positions.
#### Advertising Costs
Advertising costs, if any, are charged to expenses as incurred. For the year ended December 31, 2019, the Company incurred \$4,102 of advertising costs.
#### Fair Value
FASB ASC 820 defines fair value*,* establishes a framework for measuring fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:
- Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities the Company has the ability to access.
- Level 2 Inputs are inputs (other than quoted prices included in level 1) that are observable for the assets or liability, either directly or indirectly.
- Level 3 Unobservable inputs for the asset or liability and rely on management's own assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs should be developed based on the best information available in the circumstances and may include the Company's own data.)
The Company is evaluating new accounting standards and will implement as required.
#### **3. GUARANTEES**
In the normal course of its business, the Company indemnifies and guarantees certain service providers, such as clearing and custody agents, trustees and administrators, against specified potential losses in connection with their acting as an agent of, or providing services to, the Company or its affiliates. The Company also indemnifies some clients against potential losses incurred in the event specified third-party service providers, including sub-custodians and third-party brokers, improperly executed transactions. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications. For the year ended December 31, 2019 the Company experienced no material net losses as result of the indemnity.
#### **4. NET CAPITAL REQUIREMENTS**
The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-1), 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 \$245,069, which was \$195,069 in excess of its required net capital of \$50,000. The Company's percentage of aggregate indebtedness to net capital was 27.49% at December 31, 2019.
{12}------------------------------------------------
#### **5. COMMITMENTS AND CONTINGENCIES**
The Company has evaluated commitments and contingencies in accordance with Accounting Standards Codification 450, *Contingencies* (ASC 450) and Accounting Standards Codification 440, *Commitments* (ASC 440)*.* Management has determined that no significant commitments and contingencies exist as of December 31, 2017.
#### **6. RELATED PARTY TRANSACTIONS**
The Company has an expense sharing agreement with its member. Under the agreement, the Company pays its member a monthly fee for the use of office facilities, including furniture and equipment, and other administrative services. The sharing rates are based on relative revenue as adjusted for certain types of revenue that require less administrative and personnel expense. The amount totaled \$254,769 in 2019 which is included within various operating expense line items on the accompanying Statement of Operations. The Company processes all payroll and related taxes for employees who are shared with the member. Using the same rates, the member's share of this expense totaled \$3,061,149 for the year. In addition, the Company charges an affiliate for costs of trading including related office expenses which totaled \$104,442 and is included in revenue on the accompanying financial statements. As of December 31, 2019, the Company has recorded a receivable from its member related to these transactions for \$360,136.
#### **7. SUBSEQUENT EVENTS**
The Company evaluated subsequent events through February 25, 2020, the date its financial statements were issued. The Company did not identify any material subsequent events requiring adjustment to or disclosure in its financial statements.
#### **8. INVESTMENT DISCLOSURE**
Following table presents the Company's fair value hierarchy for those assets measured at fair value on a recurring basis as of December 31, 2019:
Fair Value Measurement on a Recurring Basis As of December 31, 2019:
| | Level 1 | Level 2 | Level 3 | Total |
|-------------------|----------|---------|---------|----------|
| Securities Owned: | | | | |
| Equities-Trading | \$40,000 | - 0- | -0- | \$40,000 |
The fair value above approximates cost and the Company uses the cost as fair value as there was no significant gain on the investments. The investments are restricted under the security agreement as referenced in note 9.
#### **9. SECURED DEMAND NOTE**
The Company entered into a secured demand note agreement with Mr. Allen Gillespie, a related party, on January 31, 2014 with an initial termination date of January 31, 2015. The agreement has been renewed through January 31, 2021. Mr. Gillespie pledged \$15,000 in cash and 1,000 shares of BP stock as collateral for the note. There has been no interest paid to date as interest does not accrue with this agreement. This demand note is secured by the investment referenced in note 8.
{13}------------------------------------------------
(A LIMITED LIABILITY COMPANY)
#### **COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF DECEMBER 31, 2019**
| | I | SCHEDULE I |
|---------------------------------------------------------------|---------|------------|
| | | |
| TOTAL MEMBER'S EQUITY QUALIFIED FOR NET
CAPITAL | \$ | 591,976 |
| ADDITIONS | I | |
| Subordinated loans | | 40,000 |
| DEDUCTIONS AND/OR CHARGES: | | |
| Blockage | | (2,804) |
| Non-allowable assets: | | |
| Accounts receivable | | (10,000) |
| Due from parent | | (360,136) |
| Prepaid expenses | | 0 |
| Haircuts | | (7) |
| NET CAPITAL | I
\$ | 259,029 |
| AGGREGATE INDEBTEDNESS - | | |
| Accounts payable and accrued expenses | | 550 |
| Due to clearing broker | | 10,742 |
| Payroll payable | | 56,084 |
| Total aggregate indebtedness | I
\$ | 67,376 |
| | | |
| COMPUTATION OF BASIC NET CAPITAL REQUIREMENT - | | |
| Minimum net capital required | I
\$ | 50,000 |
| | | |
| Excess net capital | I | 209,029 |
| Net capital in excess of the greater of: 10% of aggregate | | |
| indebtedness or 120% of minimum net capital | I | 199,029 |
| | | |
| Percentage of aggregate indebtedness to net capital | I | 26.01% |
| | | |
| | | |
| RECONCILIATION WITH THE COMPANY'S COMPUTATION (INCLUDED | | |
| IN PART II OF FORM X-17A-5 AS OF DECEMBER 31, 2019) | | |
| Net capital, as reported in the Company's Part II (unaudited) | | |
| FOCUS report | \$ | 259,029 |
| | | |
| | | |
| Net Capital as reported in the preceding calculation | I
\$ | 259,029 |
| | | |
The accompanying notes are an integral part of these financial statements.
{14}------------------------------------------------
DECEMBER 31, 2019
#### **SCHEDULE II**
### **COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER RULE 15C3- 3 OF THE SECURITIES AND EXCHANGE COMMISSION**
The Company is exempt from the provisions of Rule 15c3-3 under the Security Exchange Act of 1934 pursuant to paragraph (k)(2)(ii) of the rule. All customer securities transactions are cleared through another broker-dealer on a fully disclosed basis.
#### **SCHEDULE III**
### **INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION**
The Company is exempt from the provisions of Rule 15c3-3 under the Security Exchange Act of 1934 pursuant to paragraph (k)(2)(ii) of the rule. The Company did not maintain possession or control of any customer funds or securities.
{15}------------------------------------------------
#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Member of FinTrust Brokerage Services, LLC
We have reviewed management's statements, included in the accompanying FinTrust Brokerage Services, LLC's Annual Exemption Report, in which (1) FinTrust Brokerage Services, LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which FinTrust Brokerage Services, LLC claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (the "exemption provisions") and (2) FinTrust Brokerage Services, LLC stated that FinTrust Brokerage Services, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. FinTrust Brokerage Services, 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 FinTrust Brokerage Services, 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)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934.
Goldman & Company, CPA's, P.C. Marietta, Georgia February 25, 2020
{16}------------------------------------------------
# **F I** N T RUST® BROKERAGE SERVICES ---
#### **EXEMPTION REPORT**
FinTrust Brokerage Services, LLC ("Company'') is a registered broker-dealer subject to SEC Rule 17a-S ("Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by Rule 17a-S(d)(l) and (4). To the best of its knowledge and belief, the Company states the following:
Throughout the fiscal year ended December 31, 2019, the Company claimed an exemption to SEC Rule 1Sc3-3 pursuant to paragraph (k)(2)(ii) ("identified exemption provision").
The Company has met the identified exemption provision throughout the most recent fiscal year without exception.
Chief Compliance Officer February 25, 2020
124 Verdae Boulevard, s·uite 504 I Greenville, SC 29607 Phone: 864.288.2849 I www.fintrustadvisors.com
Investment advisory services offered through FinTrust Capital Advisors, LLC. Securities offered through FinTrust Brokerage Services, LLC. Member FINRA & SIPC
{17}------------------------------------------------
#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES
#### To the Member of FinTrust Brokerage Services, LLC
We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below and were agreed to by FinTrust Brokerage Services, LLC and the SIPC, solely to assist you and SIPC in evaluating FinTrust Brokerage Services, LLC's compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2019. FinTrust Brokerage Services, LLC's management is responsible for its Form SIPC-7 and for its compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with standards established by the Public Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows:
- 1) Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences;
- 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for the year ended December 31, 2019 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2019, noting no differences;
- 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences;
- 4) Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences; and
- 5) Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed, noting no differences.
We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on FinTrust Brokerage Services, LLC's compliance with the applicable instructions of the Form SIPC-7 for the year ended December 31, 2019. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report is intended solely for the information and use of FinTrust Brokerage Services, LLC and the SIPC and is not intended to be and should not be used by anyone other than these specified parties.
Goldman & Company, CPA's, P.C. Marietta, Georgia February 25, 2020
{18}------------------------------------------------
| | SIPC-7
(35· REV 6/17) | SECURITIES INVESTOR PROTECTION CORPORATION | P.O. Box 92185 Washington, D.C. 20090-2185
202-371-8300
General Assessment Reconciliation
For 1he fiscal year ended 12131l2019 | | | | SIPC-7
(35-REV 6/17) | |
|------------------|--------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|-----|------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|--------------------------------------|
| | | (Read carefully !he instructions in your Working Copy before completing this Form) | | | | | | |
| | | TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS
1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for
purposes of the audit requirement of SEC Rule 17a·5: | | | | | | |
| | I
FINRA
I | SEC 8-49514
CRD 41608
December
FinTrust Brokerage Services, LLC
124 Verdae Blvd, Suite 504
Greenville, SC 29607 | | 7 | indicate on the form filed.
Allen Gillespie | any corrections to form@sipc.org and so
Name and telephone number of person to
contact respecting this form. | Note: Jf any of the information shown on the
mailing label requires correction, please e-mail
864-288-2849 :!= | c.::,
-
z:
==-::
a:
O |
| 2. A. | | General Assessment (item 2e from page 2) | | | | \$978.82 | | |
| B. | | Less payment made with SIPC·6 filed (exclude Interest) | | | | ( 429.41 | | |
| | | | | | | | | |
| | | Date Paid
C. Less prior overpayment applied | | | | | | |
| | | D. Assessment balance due or (overpayment) | | | | 549.41 | | |
| E. | | Interest computed on late payment (see instruction E) for ____ days at 20% per annum | | | | 0 | | |
| | | F. Total assessment balance and interest due (or overpayment carried forward) | | | | \$549.41 | | |
| | G. PAYMENT: | ~
✓ the box
Check malled to P.O. Box
Funds Wired
Total (must be same as F a ove) | □
\$_5_4_9_.4_1 | | ______
_ | | | |
| | | H. Overpayment carried forward | \$( | | _________
_ | | | |
| | | 3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number): | | | | | | |
| | and complete. | The SIPC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct | | | FINTRUST BROKERAGE SERVICES, LLC | r organlzalionl | | |
| | | Dated the.2L_ day ofh_-c;;;;;;;.(o:,,-= ""'-~-• 20 Z.o . | | | | | | |
| | | | | | (TIiie)
I | | | |
| | | This form and the assessment pa ment Is due 60 days after the end of lhe fiscal year. Retain the Working Copy of this form
for a period of not less than 6 years, the latest 2 years in an easily accessible place. | | | | | | |
| 3 | ffi Dates: | Postmarked
Received | Reviewed | | | | | |
| I.I.I | > Calculations __ | _ | Documentation _ | _ _ | | | | |
| I.I.I
a:
u | Exceptions: | | | | | | Forward Copy | |
| ~ | | en Disposition of exceptions: | | | | | | |
{19}------------------------------------------------
#### **DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT** Amounts for the fiscal period
| | beginning JANUARY1, 2a19
and ending oeceMBER>1.,01, |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|
| Item No.
2a. Total revenue {FOCUS Line 12/Part IIA Line 9, Code 4030) | Eliminate cents
\$1,759,840 |
| 2b. Additions:
(1) Total revenues from the securities business of subs.idiaries (except foreign subsidiaries) and
predecessors not included above. | |
| (2) Net lass from principal transactions in securities in trading accounts. | |
| {3) Net loss from principal transactions in commodities in trading accounts. | |
| (4) Interest and dividend expense deducted in determining item 2a. | |
| (5) Net loss from management ol or participation in the underwriting or distribution of securities. | |
| (6) Expenses other than advertising, printing, registration lees and legal lees deducted in determining net
profit from management of or participation in underwriting or distribution of securities. | |
| (7) Net loss from securities in investment accounts. | |
| Total additions | |
| 2c. Deductions:
(1) Revenues from the distribution of shares ol a registered open end investment company or unit
investment trust, from the sale of variable annuities, from the business of insurance, from investment
advisory services rendered to registered investment companies or insurance company separate
accounts, and from transactions in security futures products. | 975,823 |
| (2) Revenues from commodity transactions. | |
| (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions. | 128,860 |
| (4) Reimbursements for postage in connection with proxy solicitation. | |
| (5) Net gain from securities in investment accounts. | |
| (S) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date. | 2,613 |
| (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9){L) ol the Act). | |
| (8) Other revenue not related either directly or indirectly ta the securities business.
(See Instruction C): | |
| {Deductions in excess of \$100,000 require documentation) | |
| (9) (i) Total in1erest and dividend expense (FOCUS Line 22/PART IIA Line 13,
__________
Code 4075 plus line 2b(4) above) but not in excess
\$
_
of total interest and dividend income. | |
| _________
(ii) 40% oi margin interest earned on customers securities
\$
_
accounts (40% of FOCUS line 5, Code 3960). | |
| Enter the greater of line (i) or (ii) | |
| Total deductions | 1,107,296 |
| 2d. SI PC Net Operating Revenues | \$652,544 |
| Rate effective 1/1/2017
2e General Assessment@ .0015 | \$ 978.82 |
(to page 1, line 2.A.)
{20}------------------------------------------------
## **SIPC-7 Instructions**
This form is to be filed by all members of the Securities Investor Protection Corporation whose fiscal years end in 2011 and annually thereafter. The form together with the payment is due no later than 60 days after the end of the fiscal year, or after membership termination. Amounts reported herein must be readily reconcilable with the member's records and the Securities and Exchange Commission Rule 17a-5 report filed. Questions pertaining to this form should be directed to SIPC via e-mail at lorm@sipc.org or by telephoning 202-371-8300.
A. For the purposes of this form, the term "SIPC Net Operating Revenues" shall mean gross revenues from the securities business as defined in or pursuant to the applicable sections of the Securities Investor Protection Act of 1970 ("Act') and Article 6 of SIPC's bylaws (see page 4}, less item 2c(9) on page 2.
B. Gross revenues of subsidiaries, except foreign subsidiaries, are required to be included in SIPC Net Operating Revenues on a consolidated basis except for a subsidiary filing separately as explained hereinafter.
If a subsidiary was required to file a Rule 17a-5 annual audited statement of income separately and is also a SIPC member, then such subsidiary must itself fi le SIPC-7, pay the assessment, and should not be consolidated in your SIPC-7.
SIPC Net Operating Revenues of a predecessor member which are not included in item 2a, were not reported separately and the SIPC assessments were not paid thereon by such predecessor, shall be included in item 2b(1}.
- C. Your General Assessment should be computed as follows:
- (1) **line 2a** For the applicable period enter total revenue based upon amounts reported in your Rule 17a-5 Annual Audited Statement of Income prepared in conformity with generally accepted accounting principles applicable to securities brokers and dealers. or if exempted from that rule, use X·17A-5 (FOCUS Report) Line 12, Code 4030.
- (2) Adjustments The purpose of the adjustments on page 2 is to determine SIPC Net Operating Revenues.
- (a) Additions Lines 2b(1} through 2b(7) assure that assessable income and gain items of SIPC Net Operating Revenues are totaled, unreduced by any losses (e.g., if a net loss was incurred for the period from all transactions in trading account securities, that net loss does not reduce other assessable revenues). Thus, line 2b(4) would include all short dividend and interest payments including those incurred in reverse conversion accounts, rebates on stock loan positions and repo interest which have been netted in determining line 2(a).
- (bl **Oedttctiaas** Line 2c(1) through line 2c(9) are either provided for in the statue, as in deduction 2c(1), or are allowed to arrive at an assessment base consisting of net operating revenues from the securities business. For example, line 2c(9) al lows for a deduclion of either the total of interest and dividend expense (not to exceed interest and dividend income}, as reported on FOCUS line 22/PART IIA line 13 (Code 4075), plus line 2b(4) or 40% of interest earned on customers' securities accoun1s {40% of FOCUS Line 5 Code 3960}. Be certain to complete both line (i) and (ii), entering the greater of the two in the far right column. Dividends paid to shareholders are not considered 'Expense" and thus are not to be included in the deduction. Likewise, interest and dividends paid to partners pursuant to the partnership agreements would also not be deducted.
ff the amount reported on line 2c (8) aggregates to \$100,000 or greater, supporting documentation must accompany the form that identifies these deductions. Examples of support information include; contractual agreements, prospectuses, and limited partnership documentation.
- (i) Determine your SIPC Net Operating Revenues, item 2d, by adding to item 2a, the total of item 2b, and deducting the total of item 2c.
- (ii) Multiply SIPC Net Operating Revenues by the applicable rate. Enter the resulting amount in item 2e and on I in e 2A of page 1.
- (iii) Enter on line 28 the assessment due as reflected on the SIPC-6 previously filed.
- (iv) Subtract line 28 and 2C from line 2A and enter the difference on line 2D. This is the balance due for the period.
- (v) Enter interest computed on late payment (if applicable} on line 2E.
- (vi) Enter the total due on line 2F and the payment of the amount due on line 2G.
- (vii) Enter overpayment carried lo rward (if any} on line 2H.
D. Any SIPC member which is also a bank (as defined in the Securities Exchange Act of 1934) may exclude from SIPC Net Operating Revenues dividends and interest received on securities in its investment accounts to the extent that it can demonstrate to SIPC's satisfaction that such securities are held, and such dividends and interest are received, solely in connection with its operations as a bank and not in connection with its operations as a broker, dealer or member of a national securities exchange. Any member who excludes from SIPC Net Operating Revenues any dividends or interest pursuant to the preceding sentence shall file with this form a supplementary statement setting forth the amount so excluded and proof of its entitlement to such exclusion.
E. Interest an Assessments If all or any part of assessment payable under Section 4 of the Act has not been postmarked within 15 days after the due date thereof, the member shall pay, in addition 10 the amount of the assessment, interest at the rate of 20% per annum on the unpaid portion of the assessment for each day it has been overdue.
F. Securities and Exchange Commission Rule 17a-5{e) (4) requires those who are not exempted from the audit requirement of the rule and whose gross revenues are in excess of \$500,000 to file a supplemental independent public accountants report covering this SIPC-7 no later than 60 days after their fiscal year ends.
**Mail this completed form to SIPC together with a check for the amount due, made payable to SIPC, using the enclosed return PO BOX envelope or wire the payment to: Bank Name: Citibank, New York Swift: CITIUS33 ABA#:** 021000089 Account Number: 30801482 Address: 111 Wall Street, New York, New York 10043 USA On the wire identify the name of the firm and its SEC Registration 8-# and label It as "for assessment." Please fax a copy of the assessment form to (202)-371-6728 or e-mail a copy to form@sipc.org on the same day as the wire.
{21}------------------------------------------------
#### **From Section 16(9) of the Act:**
The term ·gross revenues from the securities business• means the sum of (but without duplication)-
(A) commissions earned in connection with transactions in securities effected for customers as agent (net of commissions paid to other brokers and dealers in connection with such transactions) and markups with respect to purchases or sales of securities as principal;
(B) charges for executing or clearing transactions in securities for other brokers and dealers;
(C) the net realized gain, if any, from .principal transactions in securities in trading accounts;
(D) the net profit, if any, from the management of or participation in the underwriting or distribution of securities;
(E) interest earned on customers' securities accounts;
(F) fees for investment advisory services (except when rendered to one or more registered Investment companies or insurance company separate accounts) or account supervision with respect to securities;
(G) fees for the solicitation of proxies with respect to, or tenders or exchanges of, securities;
(H) income from service charges or other surcharges with respect IOI securities;
(I) except as otherwise provided by rule of the Commission, dividends and interest received on securities in investment accounts of the broker or dealer;
(J) fees in connection with put, call, and other options transactions in securities;
(K) commissions earned for transactions in (i) certificates of deposit, and (ii) Treasury bills, bankers acceptances, or commercial paper which have a maturity at the lime ol issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof, the maturity of which is likewise limited, except that SIPC shall by bylaw include in the aggregate of gross revenues only an appropriate percentage of such commissions based on SIPC's loss experience with respect to such instruments over at least the preceding five years; and
(L) fees and other income from such other categories of the securities business as SIPC shall provide by bylaw.
Such term includes revenues earned by a broker or dealer in connection with a transaction in the portfolio margining account of a customer carried as securities accounts pursuant to a portfolio margining program approved by the Commission. Such term does not include revenues received by a broker or dealer in connection with the distribution of shares of a registered open end investment company or unit investment trust or revenues derived by a broker or dealer from the sales of variable annuities, the business of insurance, or transactions in security futures products.
#### **From Section 16(14) of the Act:**
The term 'Security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, any collateral trust certificate, preorganization certificate or subscription, transferable share, voling trust certificate, certificate of deposit, certificate of deposit for a security, or any security future as that term is defined in section 78c(a)(55)(A) of this title, *any* investment contract or certificate of interest or participation in any profit-sharing agreement or in any oil, gas or mineral royalty or lease (if such investment contract or interest is the subject of a registration statement with the Commission pursuant to the provisions of the Securities Act of 1933 [15 U.S.C. 77a et seq.]), any put, call, straddle, option, or privilege on any security, or group or index of securities (including any interest therein or based on the value thereof), or *any* put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase or sell any of the foregoing, and any other instrument commonly known as a security. Except as specifically provided above, the term "security" does not include any currency, or any commodity or related contract or futures contract, or any warrant or right to subscribe to or purchase or sell any of the foregoing.
## **From SIPC Bylaw Article 6 (As·sessments): Section 1 (f):**
The term "gross revenues from the securities business" includes the revenues in the definition of gross revenues from the securities business set forth in the applicable sections of the Act.
#### **Section 3:**
For purpose ol this article:
(a) The term "securities in trading accounts" shall mean securities held for sale in the ordinary course of business and not identified as having been held for investment.
(b) The term "securities in investment accounts" shall mean securities that are clearly identified as having been acquired for investment in accordance with provisions of the Internal Revenue Code applicable to dealers in securities. ·
(c) The term "fees and other income from such other categories of the securities· business' shall mean all revenue related either directly or indirectly to the securities business except revenue included in Section 16(9)(A)-(L) and revenue specifically excepted in Section 4(c)(3)(C)[ltem 2c(1 ), page 2].
rotate: If the amounl ol assessmenl entered on line 2e of SIPC-7 is grea1er lhan 112 of 1% of ·gross revenues from lhe securities business· as defined above, you may submil that calculation along with the SfPC•7 lorm to SIPC and pay the smaller amount, subjeol to review by your Examining Authority and by SIPC.
**SIPC Examining Authorities·**
| ASE | American Stock Exchange. LLC | | FINRA | Financial lnousiry Regulatory Aulhority |
|------|----------------------------------------------|---|-------|-----------------------------------------|
| CBOE | Chicago Board Options Exchange. Incorporated | | NYSE | Arca, Inc. |
| CHX | Chicago Stock Exchange. Incorporated | 4 | | NASDAQ OMX PHLX |
NASDAQ OMX PHLX SIPC Securilies Investor Pro1ection Corporallon
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.