# ARETE WEALTH MANAGEMENT, LLC X-17A-5 (2021-03-17) — Broker-dealer annual report - Company: ARETE WEALTH MANAGEMENT, LLC - Form: X-17A-5 - Filed: 2021-03-17 - Period: 2020-12-31 - Accession: 0001056689-21-000003 - CIK: 1056689 - File #: 8-50854 - Material weakness: No - Auditor: Marcum, LLP - Auditor location: Deerfield, IL - Contact: David Hock - Phone: 312-940.3684 - Signed by: Joshua Rogers (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1056689/000105668921000003/annreport.pdf --- {0}------------------------------------------------ YEAR ENDED DECEMBER 31, 2020 This report is deemed confidential in accordance with Rule 17A-5(e)(3) under the Securities Exchange Act of 1934 {1}------------------------------------------------ U ITED TATE EC RITIE DE HA1 GECOMMISSIO Washington, D.C. 20549 0MB APPROVAL 0 MB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours oer resoonse ... . .. 12.00 SEC FILE NUMBER S-53489 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** FACI C PAGE Information Required of Brokers a nd Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 a nd Rule 17a-5 T hereunder | REPOR I FOR l llf~l'ERIOD BEGIN I G | /01/2020
01 | ---- | AND E DI G 12/31/2020 | | |----------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|-------------------|--------------------------------|--| | | MM DDtYY | | MM/DD/YY | | | | A. REGI TRANT IDE T | lFICATIO | | | | AME 0 1- BROK LR-DEALER: A rete Wealth Management, LLC
ADDRESS 01- PRI Cf PAL PLACE OF BU I E. ' : (Do not use P.O. Bo: | | OFFICIAL USE ONLY | | | | | | o.) | FIRM I.D. NO. | | | 1115 W Fulton Market, 3rd Floor | | | | | | | (No and tree!) | | | | | Chicago | IL | | 60607 | | | (CII)) | (SlalC) | | (lip Code) | | | AME AN[) I ELEPI 10
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David Hock 312-940·3684 | ro co I ACT I
UM BER OF- Pl R. 0 | REGA RD TO l 111 | REPOR r | | | | | | (Arca Code - Telephone Number) | | | | 8. ACCO | | | | | | I DcPE DI:. T PUBLIC ACCOU TA T ,1hosc opinion is contained in this Report• | | | | | Marcum, LLP | | | | | | | if 111dn·1dual. swte last. first. middle name
( amc | ) | | | | Nine Parkway N | orth, Suite 200 Deerfield | 60015 | | | | (Address) | | ( 131C) | (lrp Code) | | | CHECK O E: | | | | | | | | | | | | ccrti li cd Pu blic Accountant
Public Accountant | | | | | | | | | | | | B | Accountant not resident in United ' tatcs or an) of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | | | | | *\*Claims for exemption from the requiremell/ that the w11111al report be core red by the opinion of an independent public acco11111a111 11111st he supported by a statement of facts and circ11111sta11ces relied* 0 11*us the basis for the exemption See Section 2./0. I 7a-5(e)(2)* SEC 1410 (11-05) **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.** {2}------------------------------------------------ ### **OATH OR AFFIRMATION** | I. Joshua Rogers | • S\\ear (or affirm) that, to the best of | |------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------| | Arete Wealth Management, LLC | m} knowledge and belief the accompan) ing financial statement and supporting schedules pertaining to the firm of
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_________________
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. as | | of December 31 | . arc true and correct. I further swear (or affirm) that
. 20 20 | | | neither the compan} nor an) partner. proprietor. principal officer or director has an} proprietar) interest in an) account | classified solcl) as that of a customer. except as follO\\S: ![](_page_2_Figure_3.jpeg) •• *For conditions of confidential treatmem of certain portions of this filing. see section 2./0* , *-a-5(e)(3).* {3}------------------------------------------------ **YEAR ENDED DECEMBER 31 , 2020** #### CONTE TS | | Page | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------| | Report of Independent Registered Public Accounting Firm | 1-2 | | Financial statements: | | | Statement of financial condition | 3 | | Statements of income and changes in member's equity | 4 | | Statement of cash flows | 5 | | Notes to fi
nancial statements | 6-l
2 | | Supplementary information: | | | I of the
Schedule I -
Computation of net capital under Rule I 5c3-
Securities Exchange Act of 1934 | 13 | | Computation for determination of reserve requirements and
Schedule ll -
information relating to possession and control requirements
under Rule I 5c3-3 (exemption) | 14 | | Report of Independent Registered Public Accounting Firm | 15 | | Exemption Report | 16-l 7 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ### **REPORT OF INDEPE DE T REGI TERED P BLIC ACCOUNTI G FIRM** To the Member of **Arete Wealth Management LLC** ### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Arete Wealth Management LLC (the ··Company'·) as of December 31, 2020. the related statements of income and changes in member's equity, and cash nows for the year then ended, and the related notes (collecti vely referred to a the financi al statements). In our opinion. the financial statements present fairly, in all material respects, the financial position of the Compan) as of December 31, 2020. and the results of its operations and it cash flows for the )Car then ended in conformity with accounting principles generall y accepted in the Un ited States of America. ### **Basis for Opinion** These financial statements are the responsibility of the Company·s management. Our responsibilit) i to express an opinion on the Compan) · financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United tates) (PCAOB) and are required to be independent with respect to the Compan) 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 rea onable assurance about whether the financial statements are free of material misstatement. v,hether due to error or fraud. The Company i not required to have, nor were *v.e* engaged to perform. an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to asse the risks of material misstatement of the financial tatements. whether due to error or fraud. and performing procedures that respond to those risks. uch procedures included examining, on a test basis, evidence regarding the amounts and di clo ure in the financial statements. Our audit also included evaluating the accounting principles u ed and significant e timates made *by* management, as v ell as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. {5}------------------------------------------------ #### **Supplemental Information** The information presented in Schedule I and II (the ·'supplemental information'·) has been subjected to audit procedures performed in conjunction with the audit of the Company·s financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental infonnation 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 fo rming our opinion on the supplemental information, we evaluated whether the supplemental in formation, including its form and content, is presented in conformity with 17 C.F.R. §240. I 7a-5. In our opinion. the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as the Company's auditor since 20 19. Deerfield. Illinois March I 6, 2021 {6}------------------------------------------------ #### **STATEMENT OF FINANCIAL CONDITION** | December 3
1, 2020 | | | |-----------------------------------------------|----|---------------| | ASSETS | | | | Cash and cash equivalents and restricted cash | \$ | 594,55 l | | Commissions receivable | | 1,227,570 | | Prepaid expenses | | 84,804 | | Deposits | | I 00,000 | | | | | | Total assets | \$ | 2,006,925 | | LIABILITY AND MEMBER'S EQUITY | | | | Liabilities: | | | | Commissions payable | | 1,2
16,588 | | Accrued expenses | \$ | 185,000 | | Total liabilities | | 1,40
1,588 | | Member's equity | | 605,337 | | Total liability and member's equity | \$ | 2.006,925 | {7}------------------------------------------------ #### **STATEMENTS OF INCOME AND CHANGES IN MEMBER'S EQUITY** | Year ended December 3 I, 2020 | | |-------------------------------------------|---------------------| | | | | Revenues: | | | Investment banking income | \$
9,9
13.037 | | Commission income | 3,959,328 | | Who
lesale consulting income | 4,825,599 | | Managing broker dealer income | 12,865,404 | | Other income | 838.532 | | | | | Tota
l revenues | 32.401.900 | | | | | Expenses: | | | Commission expense and c
learing costs | 26,023,034 | | Expense sharing -
salaries | 695,000 | | Expense sharing -
office space | 278,000 | | office expenses
Expense sharing - | 626,000 | | Professional fees | 56,205 | | Registration fees | 196,429 | | Arbitration award | 185,000 | | Other | 24,040 | | | | | Total expenses | 28,083.708 | | | 4,3 I 8,
192 | | Net income | | | Member's equity. beginning of year | 768,145 | | | | | Member's distributions | ( 4.48
1,000) | | | | | Member's equity, end of year | \$
605,337 | {8}------------------------------------------------ #### **STATEMENT OF CASH FLOWS** | Year ended December 3 I, 2020 | | | |------------------------------------------------------------------|----|-------------------| | Cash nows from operating activities: | | | | Net income | \$ | 4,3
18,
192 | | Adjustments to reconcile net income to cash | | | | provided by operating activities: | | | | Changes in operating assets and liabilities: | | | | Commissions receivable | | (521.981) | | Prepaid expenses | | (2,8
13) | | Commissions payable | | 604,623 | | Accrued expenses | | 185.000 | | et cash provided by operating activities | | 4,583,021 | | Cash flows from financing activity: | | | | Member's distributions | | (4,481,000) | | et cash used in financing activity | | (4,481,000) | | Net increase in cash and cash equivalents and restricted cash | | 102,021 | | Cash and cash equivalents and restricted cash. beginning of year | | 492.530 | | Cash and cash equivalents and restricted cash. end of year | \$ | 594,55
1 | {9}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS** ### **1. Organization and summary of significant accounting policies** #### **Organization:** Arete Wealth Management LLC (the Company) is a registered securities broker-dealer with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (Fl RA). The Company. an Illinois limited liability corporation. was organized and began operations on January 20, 1998. and its operational life is perpetual. As a limited liability company, each member's liability is limited to the capital invested. The Company is headquartered in Chicago. Illinois. The Company is a wholly-owned subsidiary of Old Growth Capital, LLC, a Delaware holding company specializing in financial service company management. The Company operates under the provisions of Paragraph (k)(2)(ii) of Rule 15c3-3 of the SEC and, accordingly. is exempt from the remaining provisions of that rule. Essentially, the requirements of Paragraph (k)(2)(ii) provide that the Company clear all transactions on behalf of customers on a fully disclosed basis with a clearing broker-dealer and promptly transmit all customer funds and securities to the clearing broker-dealer. The clearing broker-dealer carries all of the accounts of the customers and maintains and preserves all related books and records as are customarily kept by a clearing broker-dealer. #### **Use of estimates:** The preparation offinancial statements in accordance with accounting principles generally accepted in the United tales of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. #### **Cash and cash equivalents and restricted cash:** The Company considers all highly liquid investments with a maturity of less than 90 days at the time of purchase to be cash equivalents. In accordance with the clearing agreement, all of the Company's property held by the clearing broker including, but not limited 10, securities, deposits, monies and receivables, are used as collateral to secure the Company·s liabilities and obligations co the clearing broker. As of December 3 I. 2020, the Company has \$100,000 on deposit. {10}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS (CONTINUED)** # **l. Organization and summary of significant accounting policies (continued)** ### **Concentration of risk:** The Company maintains it cash in bank accounts which, at times, may exceed federally-insured limits. The Company has uninsured balances of approximately \$345,000 at December 31, 2020. Management believes that the Company is not exposed to any significant credit risk on cash. #### **Commissions receivable:** Commissions receivable represents the net amount relating to commissions/trading income less clearing costs from the clearing organization. The Company considers commissions receivable to be fu lly collectible; accordingly, no allowance for doubtful accounts is required. #### **Revenue recognition:** The Company recognizes revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. #### **Income taxes:** The Company is a limited liability company and is taxed a a partnership under the provisions of the Internal Revenue Code. Under these provisions, the Company is not required to pay federal income tax on its income. Instead, the member of the Company is liable for federal and state income taxes on its taxable income, if any. As discussed in ote I, the Company is a wholly-owned subsidiary of Old Growth Capital, LLC, and thus. is a disallowed entity for income tax purposes. 7 {11}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS (CONTINUED)** ### **2. COVID-19 impact** On March 11 , 2020, the World Health Organization (WHO) recognized COVID-1 9 as a global pandemic, prompting many national, regional, and local governments to implement preventative or protecti ve measures. such as travel and business restrictions. temporary store closures, and widesweeping quarantines and stay-at-home orders. As a result, COVI0-1 9 and the related restrictive measures have had a significant adverse impact upon many sectors of the economy. During the COVlD-1 9 pandemic, the Company's services have not been materially interrupted. As the situation continues to evolve, the Company is closely monitoring the impact of the COVID-1 9 pandemic on all aspects of the Company's business, including how it impacts the Company's customers, vendors, and employees. The Company believes that the ultimate impact of the COVID-1 9 pandemic on its operating results, cash flows, and fi nancial condition is likely to be determined by factors which are uncertain, unpredictable, and outside of the Company's contro l. The situation surrounding COVID-19 remains fluid, and if disruptions do arise, they could materially adversely impact the Company. ### **3. Revenue from contracts with customers** #### *Significant j udgments* The recognition and measurement of revenue is based on the assessment of individual contract terms. Significantjudgment 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; and whether constraints on variable consideration should be applied due to uncertain future events. #### *Investment banking commission income* The Company provides advisory services on mergers and acquisitions (M&A). Revenue for advisory arrangements is generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transaction). However, for certain contracts, revenue is recognized over time for advisory arrangements in which the performance obligations are simultaneously provided by the Company and benefits are received by the customer. In some circumstances, significant judgment is needed to determine the timing and measure of progress appropriate for revenue recognition under a specific contract. Retainers and other fees received from customers prior to recognizing revenue are reflected as contract liabilities. At December 3 1. 2020, there were no such retainers. {12}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS (CONTINUED)** # **3. Revenue from contracts with customers (continued)** ### *Commissions* The Company buys and sel Is 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 financ ial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. ### *Variable Annuity Trail and 12b-1 Fee income* The Company earns variable annuity trails and I 2b- I fees in accordance with selling agreements. Fees are based on a percentage applied to the customer's assets under management. Fees are received monthly or quarterly and are recognized as revenue in the month or quarter that relates specifically to the services provided in that period, which are distinct from the services provided in other periods. ### *Wholesale consulting and managing broker-dealer income* The Company receives fees that vary based on the terms of the individual contract. Revenue is recognized on the date in which the customer accepts the subscription from the investor. The Company believes this date is the appropriate point in time to recognize revenue as there are no significant actions which the Company needs to take subsequent to this date. These fees typically vary from 0.50% to 1.00%. {13}------------------------------------------------ **NOTES TO FINANCIAL STATEMENTS (CONTINUED)** # **3. Revenue from contracts with customers (continued)** ### **Disaggregation of revenue:** The following table presents disaggregated revenue by major source: | Year ended December 31
, 2020 | | |---------------------------------------|---------------------| | Revenue from contracts with customers | | | Investment banking income | \$
9,9
13,037 | | Commission income | | | Equities and fixed income | 904,607 | | Mutual funds and I 2b-
I | 849,471 | | Variable annuities and trails | 2,205,250 | | Total commission income | 3,959,328 | | Wholesale consulting income | 4,825,599 | | Managing broker dealer income | 12,865,404 | ### **4. Clearing agreement** The Company typically maintains. as collateral against losses due to potential nonperformance by its customers, deposits to cover its inventory and outstanding customer positions. The Company"s clearing agreement expired on December 4. 20 17. The clearing agreement contained a provision that stated that if there was no written notification provided to the Company at the conclusion of the renewal term. the contract will remain in effect until either party provides 90 days written notification of the termination of the contract. or a new clearing agreement is agreed upon. {14}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS (CONTINUED)** # **5. Net capital requirements** The Company is subject to the SEC Uni form Net Capital Ru le (Rule 15c3-I ), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to regulatory net capital, both as defined. shall not exceed a 15 to I ratio. At December 3 1, 2020. the Company had regulatory net capital of\$328,024. which was \$234,585 in excess of its required net capital of \$93,439. At December 31, 2020, the Company's net capital ratio was 4.27 to I . Withdrawals of capital are subject to certain notification and other provisions of the net capital rule of the EC and other regulatory bodies. Additionally. the Company is a member of the National Futures Association (NFA), which requires the maintenance of adjusted net capital equal to or in excess of the greater of the following minimum net capital requirements: - i. \$45,000 - ii . \$6,000 per offi ce operated - iii. \$3,000 for each associated person sponsored - iv. Amount of net capital required by Rule I 5c3- I of the ecurities and Exchange Commission At December 31, 2020, the Company's adjusted net capital under CFTC regulation 1.17 was \$328,024, which was \$234,585 in excess of its required net capital of \$93.439. ### **6. Counterparty risk** In the normal course of business, the Company executes. as agent. securities transactions on behalf of its customers. If the agency transactions do not sell le because of fai lure to perform by either the customer or the counterparty. the Company may be obligated to discharge the obligation of the nonperforming party and, as a result. is subject to market risk if the market value of the securities is different from the contract amount of the transactions. The Company does not anticipate nonperformance by customers or counterparties in the above situations. ### 7. **Related party transactions** Per the terms of an expense sharing agreement, the parent company pays general expenses related to offi ce space. salaries and insurance and allocates a portion of those expenses to the Company. Expense sharing fees paid to the parent organization were \$ 1,599,000 for the year ended December 31, 2020. {15}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS (CONTINUED)** ### **8. Contingencies** The Company is periodically subject to examination of its operations by various regulatory agencies. There are no examinations currently in progress. The Company is a defendant or respondent in various pending and threatened arbitrations, administrative proceedings and lawsuits seeking compensatory damages. One of the lawsuits against the Company is a class-action lawsuit in which the Company is one of 76 broker-dealer defendants asserting an unspecified amount of damages. Claim amounts are in frequently indicative of the actual amounts the Company will be liable for, if any. Many of these claimants also seek, in addition to compensatory damages, punitive or treble damages, and all seek interest, costs and fees. These matters arise in the normal course of business. The Company intends to vigorously defend itself in these actions, and the ultimate outcome of these matters cannot be determined at this time. {16}------------------------------------------------ ### **SCHEDULE 1- COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1** | December 3
1. 2020 | | |----------------------------------------------------------------------|---------------------| | Computation of net capital: | | | Total member's equity from statement of financial condition | \$
605,337 | | Deductions and/or charges: | | | Nonallowable assets: | | | Commissions receivable | (
192,509) | | Prepaid expenses | (84,804) | | Net capital | \$
328,024 | | Computation of net capital requirement: | | | Minimum net capital required (6-2/3% of \$1,401,588) | \$
93.439 | | Minimum dollar net capital requirement of reporting broker or dealer | \$
5,000 | | Excess net capital | \$
234,585 | | Computation of aggregate indebtedness: | | | Commissions payable and accrued expenses | \$
,588
1.401 | | Percentage of aggregate indebtedness to net capital | 427.28% | There are no material differences between the amounts presented above and the amounts presented in the Company's December 31 , 2020 unaudited FOCUS Part I I Report, as amended on March 16. 2021. {17}------------------------------------------------ #### **SCHEDULE 11 - COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS AND INFORMATION RELATING TO THE POSSESSION AND CONTROL REQUIREMENTS UNDER RULE 15c3-3 (EXEMPTION)** #### **AS OF DECEMBER 31, 2020** The Company is exempt from Rule 15c3-3 pursuant to subparagraph (k)(2)(ii) thereof and those contemplated by Footnote 74 of the SEC Release o. 34-70073 adopting amendments to 17 C.F.R. §240. I 7a-5. *See report of independent registered public accounting firm.* {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) ### **REPORT OF lNDEPE DE T REGI TERED PUBLIC ACCOU TING FIRM** We have reviewed management's statements, included in the accompanying Exemption Report, in which ( 1) Arete Wealth Management LLC (the ··Company"") identified the fo llowing provision of 17 C.F.R. §240. l 5c3-3(k) under "' hich the Company claimed an exemption from 17 C.F.R. §240. I 5c3-3: (k)(2)(ii) (the "exemption provisions"), (2) the Company stated that the Company met the identified exemption provision throughout the most recent fiscal year" ithout exception and (3) the Compan) is relying on Footnote 74 of the EC Release o. 34-70073 adopting amendments to 17 C.F.R. §240. l 7a-5 becau e the Company limits its other business activiti es to those exclusively listed in its Exemption Report and the Company (I) did not directly or indirectly receive. hold, or otherwi e owe funds or securities for or to customers. (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule l 5c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a sub cription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Ru le l 5c3-3) throughout the most recent fiscal year without exception. The Company' management is responsible for compliance with EC Rule l 5c3-3 and its statements. Our review was conducted in accordance with the tandards of the Public Company Accounting Over ight Board (United tales) and, accordingly. included inquiries and other required procedures to obtain evidence about the Compan) ·s compliance with EC Rule l 5c3-3. A review i substantially less in scope than an examination. the objective of " hich is the expression of an opinion on management's statement . According!). 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 tated, in al I material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934 and based on footnote 74 to SEC Release o. 34-70073 adopting amendments to 17 C.F.R. §240. l 7a-5. Deerfield, Illinois March 16. 202 I MARCLJM(,RQUP M E M BER {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) ### EXEMPTION REPORT Arete Wealth Management, LLC (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-S(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: The Company claimed an exemption from 17 C.F.R. § 240.1 Sc3-3 under the following provisions of 17 C.F.R. §240.1 Sc3-3 **(k):** (k)(2)(ii). The Company met the identified exemption provisions in 17 C.F.R. §240.1 Sc3-3 (k) throughout the most recent fiscal year without exception. The Company is also filing this Exemption Report because the Company's other business activities contemplated by Footnote 7 4 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 are limited to: (1) effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company; (2) receiving transaction-based compensation for identifying potential merger and acquisition opportunities for clients, referring securities transactions to other broker-dealers, and (3) engaging solely in activities permitted for capital acquisition brokers ("CAB") as defined in FINRA's CAB rules and approved for membership in FINRA as a CAB, and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 1 Sc2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 1 Sc3 -3) throughout the most recent fiscal year without exception. ### **ARETE WEAL TH** 111 S W. FULTON MARKET, 3rd FLOOR CHICAGO, IL 60607 T 312.940.3684 **F** 312.264.0087 ARETEWEAL TH.COM Sccunt1<'s off,,,ro through Arctc Wealth Management. member FINRA SIPC. NFA. Advisory Services offered through Aretc Wealth Advisors, an SEC Reg,5tered Investment Advi~r {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) I, Joshua Rogers, affirm that, to my best knowledge and belief, this Exemption Report is true and correct. CEO 03/17/2021 **ARETE WEAL TH** 111 5 W. FULTON MARKET, 3rd FLOOR CHICAGO, IL 60607 **T** 312.940.3684 F 312.264.0087 ARETEWEAL TH.COM Securities offered through Arete Wealth Management. member FINRA. SIPC NFA Advisory Services offered through Arete Wealth Advisors. an SEC Registered Investment Advisor Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.