# FOUNDERS FINANCIAL SECURITIES LLC X-17A-5 (2022-03-31) — Broker-dealer annual report - Company: FOUNDERS FINANCIAL SECURITIES LLC - Form: X-17A-5 - Filed: 2022-03-31 - Period: 2021-12-31 - Accession: 0001342396-22-000002 - CIK: 1342396 - File #: 8-67137 - Type: Broker-dealer - Material weakness: No - Auditor: GOLDMAN & COMPANY CPAS PC - Auditor location: MARIETTA, GA - Contact: Jill Reckamp - Phone: 4434707290 - Email: jreckamp@foundersfinancial.com - Website: foundersfinancial.com - Signed by: BRADLEY SHEPHERD (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1342396/000134239622000002/auditreport.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 > ANNUAL REPORTS FORM X-17A-5 PART III OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 SEC FILE NUMBER 8-67137 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 01/01/2021 12/31/2021 AND ENDING MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION NAME OF FIRM: FOUNDERS FINANCIAL SECURITIES, LLC TYPE OF REGISTRANT (check all applicable boxes): | Broker-dealer □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 1026 CROMWELL BRIDGE ROAD | | (No. and Street) | | | | | |------------------------------------------------------------|---------------------------------------------------------------------------|--------------------------------|------------|--|--| | TOWSON | | MARYLAND | | | | | (City) | (State) | | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | JILL RECKAMP | 443-470-7290 | JRECKAMP@FOUNDERSFINANCIAL.COM | | | | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | GOLDMAN & COMPANY CPAS PC | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | | 3535 ROSWELL RD, STE 32 MARIETTA | | GA | 30062 | | | | (Address) | (City) | (State) | (Zip Code) | | | | JUNE 25, 2009 | | 1952 | | | | (Date of Registration with PCAOB)(if applicable) FOR OFFICIAL USE ONLY (PCAOB Registration Number, if applicable) \* Claims for exemption from the requirement that the annual 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-5(e)(1){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 OMB control number. {1}------------------------------------------------ ### OATH OR AFFIRMATION | swear (or affirm) that, to the best of my knowledge and belief, the
financial report pertaining to the firm of FOUNDERS FINANCIAL SECURITIES, LLC
as of
12/31
, 2 21
partner, officer, director, or equivalent person, as the case may be, has any proprietary in any account classified solely as that of a customer.
Title:
CEO
Notary Public | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | | | | | | | This filing** contains (check all | | = (a) Statement of financial condition. | | [ (b) Notes to consolidated statement of financial condition. | | = {c} Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of
comprehensive income (as defined in § 210.1-02 of Regulation S-X). | - = (d) Statement of cash flows. - = (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - [ (f) Statement of changes in liabilities subordinated to claims of creditors. - = (g) Notes to consolidated financial statements. - (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - [ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - | (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - [ (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - = (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (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. - (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - □ {p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - | (q) Oath or affirmation in accordance with 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - \_ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - = (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [ (t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - |w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, as applicable. - | a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - O (z) Other: - \*\* To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(2), as applicable. {2}------------------------------------------------ ### **FOUNDERS FINANCIAL SECURITIES, LLC FINANCIAL STATEMENTS AND SCHEDULES** **Public Accounting Firm December 31, 2021 With Report of Independent Registered** {3}------------------------------------------------ ## **FOUNDERS FINANCIAL SECURITIES, LLC Financial Statements for the Year Ended December 31, 2021 Table of Contents** | Report of Independent Registered Public Accounting Firm | | |-------------------------------------------------------------------------------------------------------------------------------------------------------------|-----| | Financial Statements | | | Statement of Financial Condition | 2 | | Statement of Operations | 3 | | Statement of Changes in Member's Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6-8 | | Supplementary Schedule I - Computation of Net Capital Under Rule 15c3-1 of the Securities and
Exchange Commission Act of 1934 and Aggregate Indebtedness | 10 | | Supplementary Schedule II - Computation for Determination of Reserve Requirements | 11 | | Supplementary Schedule III - Information Relating to the Possession or Control Requirements | 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 Founders Financial Securities, LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Founders Financial Securities, LLC as of December 31, 2021, the related statements of operations, changes in member's equity and 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 Founders Financial Securities, LLC as of December 31, 2021, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of Founders Financial Securities, LLC 's management. Our responsibility is to express an opinion on Founders Financial Securities, LLC's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to 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 Founders Financial Securities, LLC's financial statements. The supplemental information is the responsibility of Founders Financial Securities, LLC's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-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 March 30, 2022 {5}------------------------------------------------ ### **STATEMENT OF FINANCIAL CONDITION FOUNDERS FINANCIAL SECURITIES, LLC As of December 31, 2021** #### ASSETS | Cash and cash equivalents | \$
1,868,108 | |------------------------------------------------------------------------------|-----------------| | Commissions and fees receivable | 755,443 | | Other receivables | 4,120 | | Property and equipment, at cost, less accumulated
depreciation of 181,489 | 30,240 | | Prepaid expenses and other assets | 146,025 | | Total assets | \$
2,803,936 | | | | ### LIABILITIES AND MEMBER'S EQUITY | Liabilities | | |---------------------------------------|-----------------| | Accounts payable and accrued expenses | \$
640,435 | | Commissions payable | 937,232 | | Deferred revenue | 2,791 | | Due to broker | 23,999 | | | | | Total liabilities | 1,604,457 | | | | | Member's equity | 1,199,479 | | | | | Total liabilities and member's equity | \$
2,803,936 | {6}------------------------------------------------ ### **FOUNDERS FINANCIAL SECURITIES, LLC STATEMENT OF OPERATIONS For the Year Ended December 31, 2021** | REVENUES | | |--------------------------------|------------------| | Commissions | \$
14,356,104 | | Advisory fees | 24,762,126 | | Registered representative fees | 1,303,114 | | Other income | 218,613 | | Total revenues | 40,639,957 | | EXPENSES | | | Compensation and benefits | 32,311,321 | | Clearing fees | 105,694 | | Insurance | 334,376 | | Occupancy | 199,040 | | Professional fees | 609,487 | | Regulatory fees | 190,650 | | Travel and entertainment | 59,580 | | Other operating expenses | 3,122,103 | | Total expenses | 36,932,251 | | NET INCOME | \$
3,707,706 | {7}------------------------------------------------ ### **STATEMENT OF CHANGES IN MEMBER'S EQUITY FOUNDERS FINANCIAL SECURITIES, LLC For the Year Ended December 31, 2021** | Balance, December 31, 2020 | \$
1,009,768 | |----------------------------|-----------------| | Member's Distributions | (3,517,995) | | Net Income | 3,707,706 | | Balance, December 31, 2021 | \$
1,199,479 | {8}------------------------------------------------ ## **FOUNDERS FINANCIAL SECURITIES, LLC STATEMENT OF CASH FLOWS For the Year Ended December 31, 2021** | CASH FLOWS FROM OPERATING ACTIVITIES: | | |-----------------------------------------------------------------------------------|--------------| | Net income | \$ 3,707,706 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | Depreciation | 15,671 | | Changes in operating assets and liabilities | | | Accounts receivable | (762,133) | | Prepaid expenses | 24,434 | | Accounts payable and accrued liabilities | 1,241,004 | | Due to broker | 11,119 | | Deferred revenue | 358 | | Net cash provided by operating activities | 4,238,159 | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | Computer purchase | (6,408) | | Net cash used in investing activities | (6,408) | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | Member's Distributions | (3,517,995) | | Net cash used in financing activities | (3,517,995) | | NET CHANGE IN CASH AND CASH EQUIVALENTS | 713,756 | | CASH AND CASH EQUIVALENTS: | | | Beginning of period | 1,154,352 | | End of period | \$ 1,868,108 | {9}------------------------------------------------ ### **FOUNDERS FINANCIAL SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS December 31, 2021** #### NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **Organization and Description of Business**: Founders Financial Securities, LLC (the "Company"), a Maryland limited liability company was formed in 2004. The Company began operations as a securities broker-dealer registered with the Securities and Exchange Commission ("SEC") and became a member of the Financial Industry Regulatory Authority ("FINRA") on April 6, 2006. The Company's operations consist primarily of providing financial advisory and wealth management services. The Company earns revenues primarily from commissions and fees earned from the sale of insurance products, mutual funds and investment advisory services. The Company is a wholly owned subsidiary of Founders Financial, Inc. **Basis of Presentation:** The Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States of Amercia. **Clearing Agreement:** The Company, under Rule 15c3-3(k)(2)(ii), is exempt from the reserve and possession or control requirements of Rule 15c3-3 of the Securities and Exchange Commission. The Company does not carry or clear customer accounts. Accordingly, all customer transactions are executed and cleared on behalf of the Company by its clearing broker on a fully disclosed basis. The Company's agreements with its clearing broker provides that as clearing broker, that firm will make and keep such records of the transactions effected and cleared in the customer accounts as are customarily made and kept by a clearing broker pursuant to the requirements of Rules 17a-3 and 17a-4 of the Securities and Exchange Act of 1934, as amended (the "Act"). It also performs all services customarily incident thereon, including the preparation and distribution of customer's confirmation and statements and maintenance margin requirements under the Act and the rules of the Self Regulatory Organizations of which the Company is a member. **Income Taxes**: No provision for income taxes is provided since the Company is considered a disregarded entity for federal and state income tax purposes. The member reports the Company's taxable income or loss on its respective income tax return. The Company has adopted the provisions of FASB ASC 740-10, accounting for uncertainty in income taxes. Under ASC 740-10, the Company is required to evaluate each of its tax positions to determine if they are more likely than not to be sustained if the taxing authority examines the respective positions. A tax position includes entity's status. The Company believes it has no uncertain tax positions. **Estimates**: Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could vary from the estimates that were assumed in preparing the financial statements. **Revenue Recognition:** On January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, "ASC 606"), which creates a single framework for recognizing revenue from contracts with customers that fall within its scope. Revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over goods or service to a customer. Services within the scope of ASC 606 include Investment Advisory, Investment Brokerage (including income earned on riskless principal transactions). Refer to Revenue Recognition Note: *Revenue from Contracts with Customers* for further discussion on the Company's accounting policies for revenue sources within the scope of ASC 606. {10}------------------------------------------------ #### **FOUNDERS FINANCIAL SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS December 31, 2021** #### NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED **Cash and Cash Equivalents**: The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. The Company maintains its cash and cash equivalents deposits in high credit quality financial institutions. Balances at times may exceed federally insured limits. **Commissions and Fees Receivable**: Commissions and Fees Receivable is comprised of commissions and fees with trade dates in the year ending December 31, 2021 and were collected in 2022, the Company believes no valuation allowance is needed on the receivable balance. **Other Receivable**: Other Receivables is comprised of amounts due from customers on margin accounts. The margin deficiet will be repaid within three days. No valuation allowance is deemed necessary. #### **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. #### *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 Comany 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. Other related services provided include financial planning services and the fees the Company earns, which are based on a fixed fee schedule, are recognized when the services are rendered. The Company earns commissions from variable and life annuities, the commissions are earned upon completion of the contract. 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. #### *Advisory fees* The Company earns advisory fees from its contracts with its brokerage customers to manage assets for investment and /or transact on their accounts. The advisory fees are primarily earned over time as the Company provides contracted quarterly services and are generally assessed based on a tiered scale of the value of assets under management at quarter end. Registered Representative Fees includes reimbursement from Company representatives of costs incurred by the firm such as errors and ommissions insurance, continuing education, access to the technology services and other items as agreed to by the Company and Representative. The Company is evaluating new accounting standards and will implement as required. **Property and Equipment:** Property and equipment are carried at cost and depreciated using the straight-line method over the estimated useful lives of the asset which is estimated to be three to seven years. Depreciation expense for the year ended 2021 equaled \$15,671. {11}------------------------------------------------ ## **FOUNDERS FINANCIAL SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS December 31, 2021** #### NOTE B - NET CAPITAL AND AGGREGATE INDEBTEDNESS REQUIREMENTS The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (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, 2021, the Company had net capital of \$920,886, which was \$813,922 more than its required net capital of \$106,964, which is 6 2/3% of aggregate indebetness, and the ratio of aggregate indebtedness to net capital was 1.74 to 1.0. ### NOTE C - RELATED PARTY TRANSACTIONS The Company has an expense sharing agreement with Founders Financial, Inc. ("FFI"), which was amended effective January 1, 2020. Under the agreement the Company pays certain operating costs, including rent, to, or on behalf of, FFI, based on the allocation methodology described in the agreement. This agreement does not expire until a new agreement replaces it. The amount expensed in the financial statements for 2021 under the arrangement is approximately \$2,671,603. The Company also pays office space rent on a month-to-month basis to an affilate with common ownership which totaled \$19,040 for 2021. #### NOTE D - FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND UNCERTAINTIES In the normal course of business, the Company's activities through its clearing broker involve the execution, settlement and financing of various customer securities transactions. These activities may expose the Company to off-balance sheet risk. In the event a customer fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at prevailing market prices in order to fulfull the customer's obligations. In addition, the Company bears the risk of financial failure by its clearing broker. If the clearing broker should cease doing business, the Company's receivable from this clearing broker could be subject to forfeiture. The Company's financial instruments, including cash and cash equivalents, receivables, prepaid expenses and other assets, accounts payable and accrued expenses, commissions payable and due to broker are carried at amounts that approximate fair value, due to the short-term nature of the instruments. The Company also maintains its cash balances in several financial institutions, which at times may exceed federally insured limits. As of December 31, 2019 the Company held \$51,765 in cash balances in excess of the federally insured limit. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. #### NOTE E - SUBSEQUENT EVENTS The Company has performed an evaluation of subsequent events through March 30, 2022, the date the financial statements were issued. The evaluation did not result in any subsequent events that required disclosures and/or adjustments to the financial statements. ### NOTE F - COMMITMENTS AND CONTINGENCIES There were no commitments or contingencies at the year ended December 31, 2021. {12}------------------------------------------------ #### **FOUNDERS FINANCIAL SECURITIES, LLC** ### **Supplementary Information Securities Exchange Act of 1934 Pursuant to rule 17(a)-5 of the** #### **December 31, 2021** The accompanying schedule I is prepared in accordance with the requirements and general format of FOCUS Form X-17 A-5. {13}------------------------------------------------ #### **FOUNDERS FINANCIAL SECURITIES, LLC** ## **AND EXCHANGE COMMISSION ACT OF 1934 SCHEDULE I COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND AGGREGATE INDEBTEDNESS** #### **December 31, 2021** | Net Capital | | |------------------------------------------------------------------------------------------|-----------------| | Total member's equity qualified for net capital | \$
1,199,479 | | Deduction for non-allowable assets: | | | Commissions receivable - non-allowable | (98,208) | | Other receivables | (4,120) | | Property and equipment | (30,240) | | Prepaid expenses and other assets | (146,025) | | Net capital | \$
920,886 | | Minimum net capital required (greater than \$50,000 or 6 2/3% of aggregate indebtedness) | \$
50,000 | | Aggregate Indebtedness:
Liabilities | \$ 1,604,457 | | Minimum net capital based on aggregate indebtedness | \$
106,964 | | Ratio of aggregate indebtedness to net capital | 1.74 to 1.0 | | Excess net capital | \$
813,922 | ### RECONCILIATION WITH COMPANY'S COMPUTATION OF NET CAPITAL INCLUDED IN PART IIA OF FORM X-17A-5 AS OF DECEMBER 31, 2021. There was no significant difference between net capital in Part IIA of Form X-17A-5 and net captial above. {14}------------------------------------------------ #### **FOUNDERS FINANCIAL SECURITIES, LLC** ## **SCHEDULE II COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER THE SECURITIES AND EXCHANGE COMMISSION RULE 15c3-3 December 31, 2021** The Company is not required to file the above schedules as it is exempt from Securities and Exchange Commission Rule 15c3-3 under paragraph (k)(2)(ii) of the rule and does not hold customers' monies or securities. ## **INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER THE SECURITIES AND EXCHANGE COMMISSION RULE 15c3-3 December 31, 2021 SCHEDULE III** The Company is not required to file the above schedules as it is exempt from Securities and Exchange Commission Rule 15c3-3 under paragraph (k)(2)(ii) of the rule and does not hold customers' monies or securities. {15}------------------------------------------------ ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member of Founders Financial Securities, LLC We have reviewed management's statements, included in the accompanying Founders Financial Securities, LLC's Annual Exemption Report, in which (1) Founders Financial Securities, LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which Founders Financial Securities, LLC claimed an exemption from 17 C.F.R. §240.15c3-3: k(2)(ii) (the "exemption provisions") and (2) Founders Financial Securities, LLC stated that Founders Financial Securities, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. Founders Financial Securities, LLC's management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about Founders Financial Securities, LLC's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. Goldman & Company, CPA's, P.C. Marietta, Georgia March 30, 2022 {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) ### EXEMPTION REPORT Founders Financial Securities, LLC ("Company") is a registered broker-dealer subject to SEC Rule 17a-5 ("Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by Rule 17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: Throughout the fiscal year ended December 31, 2021, the Company claimed an exemption to SEC Rule 15c3-3 pursuant to paragraph (k)(2)(ii) ("identified exemption provision"). The Company has met the identified exemption throughout the most recent fiscal year without exception. Ship in Shali Bradley Shepherd President February 28, 2022 {17}------------------------------------------------ ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES To the Member of Founders Financial Securities 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 Founders Financial Securities LLC and the SIPC, solely to assist you and SIPC in evaluating Founders Financial Securities LLC's compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2021. Founders Financial Securities 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, 2021 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2021, 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 Founders Financial Securities LLC's compliance with the applicable instructions of the Form SIPC-7 for the year ended December 31, 2021. 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. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. This report is intended solely for the information and use of Founders Financial Securities 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 March 30, 2022 {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 (35-REV 6/17) For the fiscal year ended 12/31/2021 (Read carefully the instructions in your Working Copy before completing this Form) ### TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS | purposes of the audit requirement of SEC Rule 17a-5: | | A
1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for
d
0 | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | 067137
FINRA
FOUNDERS FINANCIAL SECURITIES LLC
1026 CROMWELL BRIDGE RD
TOWSON, MD 21286-3308 | DEC | G
Note: If any of the information shown on the
mailing label requires correction, please e-mail
5
any corrections to form@sipc.org and so
ORKIN
indicate on the form filed.
Name and telephone number of person to
contact respecting this form.
M
JILL RECKAMP 410-308-9800 | | | | \$ 4,067.34 | | 2. A. General Assessment (item 2e from page 2)
B. Less payment made with SIPC-6 filed (exclude interest)
08/01/2021 | | 1,017.54 | | Date Paid
C. Less prior overpayment applied | | 0 | | D. Assessment balance due or (overpayment) | | 3,049.80 | | E. Interest computed on late payment (see instruction E) for__________________________________________________________________________________________________________________ | | 0 | | F. Total assessment balance and interest due (or overpayment carried forward) | | 3,049.80 | | G. PAYMENT: V the box
Check mailed to P.O. Box Funds Wired V
Total (must be same as F above) | \$ 3,049.80 | | | H. Overpayment carried forward | \$ ( | | | 3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number): | | | | The SIPC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct
and complete. | suply is | Founders Financial Securities, LLC
(Name of Corporation, Partnership or other organization)
M & CAR | | 20 22
Dated the 30 day of March | | (Authorized Signature)
CEO | | for a period of not less than 6 years, the latest 2 years in an easily accessible place. | | (Tille)
This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form | | Dates:
Postmarked
Received | Reviewed | | | REVIEWER
Calculations_ | Documentation ________________________________________________________________________________________________________________________________________________________________ | Forward Copy - | | Exceptions:
J | | | os Disposition of exceptions: 1 {19}------------------------------------------------ ## DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT Amounts for the fiscal period beginning JANUARY 1, 2021 and ending DECEMBER 31, 2021 | Item No.
2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) | Eliminate cents
\$ 40,639,419 | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------| | 2b. Additions:
(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | | (2) Net loss 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 of or participation in the underwriting or distribution of securities. | | | (6) Expenses other than advertising, registration fees and legal fees 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 of a registered open end investment company or unit
investment trust, from the sale of variable annuilies, 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. | 37,400,039 | | (2) Revenues from commodity transactions. | | | (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions. | 527,821 | | (4) Reimbursements for postage in connection with proxy solicitation. | | | (5) Net gain from securities in investment accounts. | | | (6) 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. | | | (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) of the Act). | | | (8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C) : | | | (Deductions in excess of \$100,000 require documentation) | | | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13,
Code 4075 plus line 2b(4) above) but not in excess
\$ 0
of total interest and dividend income. | | | (ii) 40% of margin interest earned on customers securities
0
accounts (40% of FOCUS line 5, Code 3960). | | | Enter the greater of line (i) or (ii) | 0 | | Total deductions | 37,927,860 | | 2d. SIPC Net Operating Revenues | 2,711,559 | | 2e. General Assessment @ . 0015 Rate effective 1/1/2017 | 4,067.34 | | | (to page 1, line 2.A.) | {20}------------------------------------------------ # SIPC-7 Instructions This form is to be filed by all member Protection Corporation whose fiscal years end in 2011 and annually thereatter. The form together with the payment is due no later the end of the fiscal year, or after membership termination. Amounts reported herein must be readily reconcilable with the member's records and Exchange Commission Rule 17a-5 report filed. Questions pertaining to this form should be directed to SIPC via e-mail at form@sipe.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 reguired to file a Rule 17a-5 annual audited statement of income separately and is also a SIPC member, then such subsidiary must itself file 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). - (b) Deductions 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) allows for a deduction 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 accounts (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. If 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 line 2A of page 1. - (iii) Enter on line 2B the assessment due as reflected on the SIPC-6 previously filed. - (iv) Subtract line 2B 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 forward (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 on 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 to 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 connections in securities effected for customers as agent (net of commissions paid to other brokers and dealers in connections) 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 invesment 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 to securities; (1) 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 (i) Treasury bills, bankers acceptances, or commercial paper which have a maturily at the of 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 in connection in the portfolio margining account of a customer carried as securities accounts pursuant to a portfolio margining program approved by the com does not include revenues received by a broker 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 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, bond, debenture, evidence of indebtedness, any collateral trust certificate, preorganization certificate or subscription, trust certificate, certificate of deposit, certificate of deposit for a security, or any security future as that term is delined in section 78c(a){55}(A) of this title, any investment contract or cerificate 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 with the Commission pursuant to the Securities Act of 1933 [15 U.S.C. 77a et seq.)), any put, call, straddle, oplion, or privilege on any security, or group or 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 certification in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase or sell any of the instrument commonly known as a securily. Except as specifically provided above, the term "security" does not include any currency, or any commodity or related ontract or futures contract, or any warrant or right to subscribe to or purchase or sell any of the foregoing. #### From SIPC Bylaw Article 6 (Assessments): Section 1 (f): The term "gross revenues from the securities business" in the definition of gross revenues from the securities business set forth in the applicable sections of the Act. ### Section 3: For purpose of this article: (a) The lern "securities in trading accurities 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 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 calegories of the securities business" shall mean all revenue related either directly or indirectly to the securities except revenue included in Section 16(9)(A)-(L) and revenue specifically excepted in Section 4(c)(3)(C)[Item 2c(1), page 2]. Note II the anount of assessment entered on in the of 1% of "gross reenves from the securities business" as defined above, you may submit hat caculation along with the SIPC-7 form to SIPC and pay the smaller amount, subject to review by your Examining Authority and by SIPC. #### SIPC Examining Authorities: | ASE
CBOE
CHX | American Stock Exchange, LLC | | |--------------------|----------------------------------------------|--| | | Chicago Board Options Exchange, Incorporated | | | | Chicago Slock Exchange, Incorporated | | 4 FINRA Financial Industry Regulatory Authority Arca, Inc. NYSE NASDAQ OMX PHLX SIPC Securities Investor Protection Corporation Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.