# WHITAKER SECURITIES LLC X-17A-5 (2023-03-23) — Broker-dealer annual report - Company: WHITAKER SECURITIES LLC - Form: X-17A-5 - Filed: 2023-03-23 - Period: 2022-12-31 - Accession: 0001175898-23-000001 - CIK: 1175898 - File #: 8-65419 - Type: Broker-dealer - Material weakness: No - Auditor: Cree Alessandri & Strauss CPA LLC - Auditor location: Wellesley Hills, MA - Contact: Rosalie Nicosia - Phone: 646-723-6228 - Email: estee@dorfman-finop.com - Website: dorfman-finop.com - Signed by: Thomas E. ONeill (President & CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1175898/000117589823000001/wsp2.pdf --- {0}------------------------------------------------ # **UNITED STATES SECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549 | ANNUAL REPORTS | |----------------| | FORM X-17 A-5 | | PART Ill | 0MB APPROVAL 0MB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 SEC FILE NUMBER **FACING PAGE** **Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING **01-01-2022** MM/DD/YY AND ENDING **12-31-2022** MM/DD/YY **A. REGISTRANT IDENTIFICATION** # NAME oF FIRM: Whitaker Securities LLC TYPE OF REGISTRANT (check all applicable boxes): 0 Broker-dealer □ Security-based swap dealer D Check here if respondent is also an OTC derivatives dealer □ Major security-based swap participant ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 233 Broadway Ste 1700 | | (No. and Street) | | | | |----------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------------------------------------|------------|--| | New York | NY | | 10279 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | E~tee Dorfman | 781-780-7069 | estee@dorfman-finop.com | | | | (Name) | (Area Code -Telephone Number) | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Cree Alessandri & Strauss CPA LLC | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 20 Walnut Street, Ste 301 | Wellesley Hills | MA | 02481 | | | (Address) | (City) | (State) | (Zip Code) | | | 10/30/2018 | | 6566 | | | | l"
of Registcatioo with PCAOBJ(if applicable) | | (PCAOB Registcatioo N,mbec, if applicable)I | | | | | FOR OFFICIAL USE ONLY | | | | • Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-S(e)(l)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid 0MB control number. {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, Thomas E. O'Neill | swear (or affirm) that, to the best of my knowledge and belief, the | |--------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------| | financial report pertaining to the firm of Whitaker Securities LLC | as of | | 2~,
12/31 | is true and correct. I further swear (or affirm) that neither the company nor any | | as that of a customer. | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | | | | | j
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VLAD/\ NECHAEVSKY | VLAD/\ NECHAEVSKY NotJry Public - State of New JersC'y , My Commission Expires Mar 1 2024 ( ' # **This filing\*\* contains (check all applicable boxes):** - **ii!!!** (a) Statement of financial condition. - **ii!!!** (b) Notes to consolidated statement of financial condition. - D (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in§ 210.1-02 of Regulation S-X). - D (d) Statement of cash flows. - D (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - D (f) Statement of changes in liabilities subordinated to claims of creditors. - D (g) Notes to consolidated financial statements. - D (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-l, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.18a-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - D (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-l, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - **ii!!!** (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - **ii!!!** (t) Independent public accoun.tant's report based on an examination of the statement of financial condition . - D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - D (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.l 7a-5 or 17 CFR 240.18a-7, as applicable. - D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. - D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). D(z) Other:-------------------------------------- - *\*\*To* request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5{e)(3) or 17 CFR 240.18o-7(d)(2), as applicable. {2}------------------------------------------------ STATEMENT OF FINANCIAL CONDITION AND SUPPLEMENTARY INFORMATION DECEMBER 31, 2022 **PUBLIC** {3}------------------------------------------------ # Cree Alessandri & Strauss Certified Public Accountants LLC #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Members' of Whitaker Securities LLC #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Whitaker Securities LLC as of December 31, 2022, and the related notes (collectively referred to as the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of Whitaker Securities LLC as of December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of Wh itaker Securities LLC's management. Our responsibility is to express an opinion on Whitaker Securities LLC's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Whitaker 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 requirA that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statem~nts. We believe that our audit provides a reasonable basis for our opinion. We have served as Whitaker Securities LLC's auditor since 2022. Cree Alessandri & Strauss CPA LLC March 17, 2023 {4}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31, 2022 #### ASSETS | Cash | \$
1,690,071 | |---------------------------------------------------------------------------|---------------------------| | Receivables from clearing broker | 1,383,289 | | Deposit with clearing broker | 500,000 | | Commissions Receivable | 142,341 | | Computer Equipment at cost, net of accumulated depreciation of \$254 ,742 | 9,594 | | Prepaid expenses and other assets | 134,023 | | TOTAL ASSETS | \$
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3,859,318 | | | | #### LIABILITIES AND MEMBERS' EQUITY LIABILITIES | Accrued expenses and other liabilities | \$
1,385,296 | |----------------------------------------|-----------------| | TOTAL LIABILITIES | \$
1,385,296 | | MEMBERS' EQUITY | 2,474,022 | | TOTAL LIABILITIES AND MEMBERS' EQUITY | \$
3,859,318 | | | | The Report of Independent Registered Public Accounting Fimi and accompanying footnotes are an integral part of these financial statements {5}------------------------------------------------ #### NOTES TO STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31, 2022 ### 1. ORGANIZATION AND NATURE OF BUSINESS Whitaker Securities LLC (the "Company") was organized as a Limited Liability Company in the State of Delaware May 14, 2002. The Company is a registered broker-dealer with the Securities and Exchange Commission and is a member of the Financial Industry Regulatory Authority, Inc. (FINRA). The Company executes principal and agency transactions for itself and its customers, including municipal bonds, convertible securities, corporate bonds , new issues and U.S. Treasuries. The company executes these transactions through its clearing broker Industrial and Commercial Bank of China Financial Services LLC ("ICBCFS") on a fully disclosed basis. In the normal course of business, the Company enters into financial transactions where the risk of potential loss due to changes in market (market risk) or failure of the other party to the transaction to perform (counterparty risk) exceeds the amounts recorded for the transaction. The Company's policy is to continuously monitor its exposure to market and counterparty risk through the use of a variety of financial, position and credit exposure reporting and control procedures . In addition , the Company has a policy of reviewing the credit standing of each broker-dealer, clearing organization, member and/or other counterparty with which it conducts business. As of December 31, 2022, the amount due from clearing broker reflected in the statement of financial condition are amounts receivable from ICBCFS. The Company introduces its customer transactions to ICBCFS with whom it has ·' correspondent relationships for clearance in accordance with the terms of the clearance agreements. In connection therewith, the Company has agreed to indemnify the firm for losses that it may sustain related to the Company's customers. 2. SIGNIFICANT ACCOUNTING POLICIES The Company records securities transactions and related revenues and expenses on a trade date basis. Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"). The revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation . {6}------------------------------------------------ ## NOTES TO STATEMENT OF FINANCIAL CONDITION (continued) ### DECEMBER 31, 2022 ### 2. SIGNIFICANT ACCOUNTING POLICIES (continued) In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved . The Company applied the modified retrospective method of adoption which resulted in no adjustment to retained earnings as of January 1, 2018 . 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 have been transferred to/from the customer Securities positions are stated at market value with unrealized gains or losses reflected in income on an accrual basis. Subsequent market fluctuations may require selling, or purchasing, the securities at prices which may differ from the market value reflected on the statement of financial condition . Security transactions and financing with the clearing brokers are classified as operating activities on the statement of cash flows since this is the Company's principal business. <The Company maintains its books and records on an accrual basis in accordance with accounting principles generally accepted in the United States of America which require management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from these estimates Depreciation of fixed assets is provided using straight-line method over the estimated useful lives of the related property . . Commissions and related clearing expenses are recorded on a trade-date basis as securities transactions occur. The preparation of financial statements in confirming with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures . Actual results could differ from these estimates. {7}------------------------------------------------ ### NOTES TO STATEMENT OF FINANCIAL CONDITION (continued) ### DECEMBER 31, 2022 ### 3. ACCOUNTING STANDARDS On January 1, 2020, The Company adopted FASB ASC Topic 326 - "Financial Instruments - Credit Losses" ("ASC Topic 326") which replaces the incurred loss methodology with the current expected credit loss ("CECL") methodology. The new guidance applies to financial assets measured at amortized cost, held-to-maturity debt securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must be recognized at the origination or purchase of in-scope assets. Expected Credit losses on off-balance sheet credit exposures must be estimated over the contractual period the Company is exposed to credit risk as a result of a present obligation to extend credit. The Company adopted ASC topic 326 using the modified retrospective approach for all in-scope assets. The impact of the adaptation of the current expected credit loss ("CECL") methodology to the current period was not material. Receivables from clearing broker: The Company's receivables from clearing broker include amounts receivable from unsettled trades, including amounts receivable for securities failed to deliver, accrued interest receivables and cash deposits. A portion of the Company's trades are cleared through a clearing organization and settled daily between the clearing organization and the Company. Because of this daily settlement, the amount of unsettled credit exposures is limited to the amount owed the Company for a very short period of time. The Company continually reviews the credit quality of its counterparties. The company has no lease obligations under ASC 842, Leases. See note 5. ### 4. CASH AND CASH EQUIVALENTS ,{ The Company maintains cash accounts with a single financial institution located in the United States. Funds deposited with a single bank are insured up to \$250,000 in the aggregate by the Federal Deposit Insurance Corporation ("FDIC"). The Company has not experienced any losses on these accounts. Deposits with a single brokerage institution are insured up to \$500,000 per customer, including up to \$250,000 for cash deposits, by the Securities Investor Protection Corp. ("SIPC"). The Company considers all highly liquid instruments purchased with a maturity date of three months or less when purchased to be cash equivalents. The company held no cash equivalents at December 31, 2022. {8}------------------------------------------------ ## NOTES TO STATEMENT OF FI NANCIAL CONDITION (continued) ### DECEMBER 31 , 2022 #### 5. RELATED PARTY TRANSACTIONS The Company has an administrative services agreement with an entity controlled by the Company's members. Under this agreement, the affiliate provides office space, furniture, communication equipment, and other administrative services to the Company. The Company pays for these services on a monthly basis. Fees related to this agreement are reassessed by the affiliate on a quarterly basis. Included in the statement of income is \$936,000 for expenses related to this agreement, of which none were payable at December 31, 2022. ## 6. PROVISION FOR INCOME TAXES The Company is recognized as a Limited Liability Company (an "LLC") by the Internal Revenue Service. As an LLC, the Company is not subject to income taxes . The Company's income or loss is reportable by its members on their individual tax returns based on methodology prescribed in the Company's Operating Agreement. The Company is however, subject to the New York City Unincorporated Business Tax. A provision for taxes in the amount of \$3,000 is included in the financial statements. FASB provides guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership's tax returns to determine whether the tax positions are "more-likely-thannot" of being sustained "when challenged" or "when examined" by the applicable tax authority . Tax positions not deemed to meet the more-likely-than-not threshold would be *.1* recorded as a tax benefit or expense and liability in the current year. For the year ended December 31 , 2022 management has determined that there are no material uncertain income tax positions. The tax years that remain subject to examination are 20 19, 2020 and 2021 . #### 7. EMPLOYEE BENEFIT PLAN The Company has a defined contribution plan, with a December 31 st year-end, under Section 401 (k) of the Code covering all qualified employees. Contributions to the plan by employees are determined based on an elected percentage of annual compensation, subject to annual limits prescribed by the Internal Revenue Code. The Company has elected not to match employee contributions. State Street Bank and Trust Company serves as trustee of the plan. Additionally, the Company has a profit-sharing plan, with a December 3P1 year-end, covering all qualified employees. Contributions to the plan are discretionary and are determined annually by the Company. There were no contributions to the plan for the year ended December 31, 2022. {9}------------------------------------------------ # NOTES TO STATEMENT OF FINANCIAL CONDITION (continued) ### DECEMBER 31 , 2022 #### 8. NET CAPITAL REQUIREMENTS The Company is subject to the Securities and Exchange Commission's Net Capital Rule 15c3-1 , which requires the maintenance of minimum net capital (\$100,000 for the Company) and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2022, the Company had net capital of \$2,254,197 which exceeded the minimum requirement of \$100,000 by \$2,154,197 The Company's ratio of aggregate indebtedness to net capital was .615 to 1 # 9. COMMITMENTS AND CONTINGENT LIABILITES The Company had no underwriting commitments , no contingent liabilities and had not been named as defendant in any lawsuit at December 31, 2022 or during the year then ended. On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern" and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. 1The Company may be directly impacted from the markets in which it operates and the volatility of the financial markets. The effects of the potential impact cannot be estimated at this time. #### 10. SUBSEQUENT EVENTS The Company has evaluated the need for disclosures and/or adjustments resulting from subsequent events through March 17, 2023, the date the financial statements were issued. Based on this evaluation, no disclosures or adjustments were required to the financial statements as of December 31 , 2022. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.