# M.D. SASS SECURITIES, L.L.C. X-17A-5 (2024-03-28) — Broker-dealer annual report - Company: M.D. SASS SECURITIES, L.L.C. - Form: X-17A-5 - Filed: 2024-03-28 - Period: 2023-12-31 - Accession: 0001353228-24-000003 - CIK: 1353228 - File #: 8-67246 - Type: Broker-dealer - Material weakness: No - Auditor: Citrin Cooperman & Company LLP - Auditor location: New York, NY - Contact: Sam Friedman - Phone: 212-710-8028 - Signed by: Sam Friedman (FINOP) Original filing: https://www.sec.gov/Archives/edgar/data/1353228/000135322824000003/report20231.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: Expires: Estimated average burden hours per response: SEC FILE NUMBER # ANNUAL REPORTS FORM X-17A-5 PART III | | PART III | | | | | | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|----------|-----------------|------------|--|--|--| | 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 _____________________ AND ENDING ______________________ | | | | | | | | | | MM/DD/YY | MM/DD/YY | | | | | | | A. REGISTRANT IDENTIFICATION | | | | | | | | | NAME OF FIRM: _______________________________________________________________________ | | | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
Broker-dealer
Security-based swap dealer
Major security-based swap participant
Check here if respondent is also an OTC derivatives dealer | | | | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | | | | | | | | | | | | _____________________________________________________________________________________
(No. and Street) | | | | | | | | | _____________________________________________________________________________________ | | | | | | | | | (City) | (State) | | (Zip Code) | | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | | _____________________________________________________________________________________ | | | | | | | | | (Name) | (Area Code – Telephone Number) | | (Email Address) | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
_____________________________________________________________________________________ | | | | | | | | | | (Name – if individual, state last, first, and middle name) | | | | | | | | _____________________________________________________________________________________ | | | | | | | | | (Address) | (City) | | (State) | (Zip Code) | | | | | | | | | | | | | | _____________________________________________________________________________________
(Date of Registration with PCAOB)(if applicable)
(PCAOB Registration Number, if applicable) | | | | | | | | | | 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-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}------------------------------------------------ | Sam Friedman | swear (or affirm) that, to the best of my knowledge and belief, the | |-------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------| | tinancial report pertaining to the firm of M.D. Sass Securities, L.L.C. | as of | | 12/31 | , 2 3 | | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | as that of a customer. | | | | Signaturer | | | Title:
FINOP | - - - - - - - - - - - - - - - - - - - - - - - - - - - {2}------------------------------------------------ #### **STATEMENT OF FINANCIAL CONDITION** #### **DECEMBER 31, 2023** **(Filed as public information pursuant to Rule 17a-5(d) under the Securities Exchange Act of 1934)** {3}------------------------------------------------ #### **INDEX DECEMBER 31, 2023** | | Pages | |------------------------------------------------------------|----------| | REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM | 1 | | STATEMENT OF FINANCIAL
CONDITION -
DECEMBER 31, 2023 | 2 | | NOTES TO STATEMENT OF FINANCIAL CONDITION | 3 -
5 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member M.D. Sass Securities, LLC ### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of M.D. Sass Securities, LLC as of December 31, 2023, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of M.D. Sass Securities, LLC as of December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. # **Basis for Opinion** This financial statement is the responsibility of M.D. Sass Securities, LLC's management. Our responsibility is to express an opinion on M.D. Sass 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 M.D. Sass Securities, LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial 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 statement. 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 statement. We believe that our audit provides a reasonable basis for our opinion. We have served as M.D. Sass Securities, LLC's auditor since 2006. New York, New York March 27, 2024 {5}------------------------------------------------ #### **STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2023** #### **ASSETS** | Cash and cash equivalents | \$
173,308 | |---------------------------------------|---------------| | Receivable from affiliate | 121,916 | | Commission receivable | 32,197 | | Other assets | 1,290 | | TOTAL ASSETS | \$
328,711 | | LIABILITIES AND MEMBERS' EQUITY | | | LIABILITIES: | | | Accounts payable and accrued expenses | \$
62,943 | | MEMBERS' EQUITY | 265,768 | | TOTAL LIABILITIES AND MEMBERS' EQUITY | \$
328,711 | The accompanying notes to statement of financial condition are an integral part of this statement. {6}------------------------------------------------ ### **NOTES TO STATEMENT OF FINANCIAL CONDITION** # NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES M.D. Sass Securities, L.L.C. (the "Company"), a registered broker-dealer with the Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority, Inc. ("FINRA"), was formed on September 23, 2005 primarily to act as a placement agent for various pooled onshore and offshore investment vehicles including hedge funds, private equity funds, commodity funds and fund of funds. The Company acts solely on an agency basis. The Company is a Delaware limited liability company and governed under a limited liability company agreement (the "Agreement"). The Agreement provides for the member's ownership, liabilities of the member, transfers of interest, capital contributions, distribution to the member and profit or loss allocations. The Company is scheduled to terminate on December 31, 2040 or shall be dissolved upon the occurrence of an event as set forth in the Agreement. The liability of the member shall be limited to the amount of capital contributions which such member is required to make pursuant to the provisions of the Agreement and the member shall have no further liability to contribute money to the Company for, or in respect of, the liabilities or obligations of the Company, and shall not be personally liable for any obligations of the Company. #### (a) Related party relationships The Company entered into a service agreement dated January 31, 2007 with M.D. Sass Investors Services, Inc. ("Investors"), a related party registered as an investment advisor under Section 203 of the Investment Advisors Act of 1940. The Company provides broker services of marketing interests in investment funds advised by Investors ("Brokerage Services"), for which Investors and certain affiliates and former affiliates of Investors act as General Manager, Managing Member and Investment Advisor, in exchange for services and personnel to be provided by Investors ("Affiliated Services"). The service agreement calls for the Company to be compensated by Investors at an amount equal to 100.5% of all expenses incurred providing these Brokerage Services. All of the Company's expenses are primarily paid by Investors and allocated to the Company. The Company entered into a service agreement dated January 1, 2014 with Taurus Funds Management ("Taurus"), an affiliated entity, to cover expenses for Brokerage Services and administrative expenses. Taurus has agreed to pay the Company \$20,000 per annum which cannot terminate except as of December 31st of any calendar year subject to the terms of the agreement. The Company believes its performance obligation is satisfied when (i) the salesmen have procured a signed subscription agreement as such is fulfilled at the date of signing and (ii) other services are provided to the Company. Effective November 4, 2023, both Taurus and the Company agreed to terminate the relationship. The Company earns distribution fees for marketing and promoting investment funds of registered investment advisors affiliated or formerly affiliated with the Company to institutional clients. Generally, in consideration for these services the Company receives varying percentages of committed capital associated with such institutional clients' investment. {7}------------------------------------------------ ### **NOTES TO STATEMENT OF FINANCIAL CONDITION** ### NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (a) Related party relationships (Continued) In some cases, the Company will earn the distribution fee on committed and funded capital, payable within a certain period of each drawdown of capital with respect to such commitment. The Company believes its performance obligation is the fulfillment of the subscription agreement by the institutional clients and if such is fulfilled at signing. As of December 31, 2023, two registered investment advisors accounted for 100% of commission receivable. (b) Cash and Cash Equivalents Cash equivalents are defined as short-term, highly liquid money market funds with original maturities of less than 90 days. At December 31, 2023, substantially all of the cash and cash equivalents were held at two major financial institutions. (c) Income Tax As a wholly-owned limited liability company, the Company is considered to be a disregarded entity for tax reporting purposes and is thus not subject to Federal, state or local income taxes and does not file income tax returns in any jurisdiction. All items of income, expense, gains and losses are reportable by the member for tax purposes. (d) Use of Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. # NOTE 2 - REGULATORY REQUIREMENTS The Company is subject to the SEC Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act ("SEA") of 1934 ("the Rule") and has elected to compute its net capital under the Basic Method of the Rule. The Rule requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 subject to a minimum net capital requirement of \$5,000. At December 31, 2023, the Company had a net capital of \$134,512 which was \$129,512 in excess of its required net capital. The Company's net capital ratio was 47%. {8}------------------------------------------------ #### **NOTES TO STATEMENT OF FINANCIAL CONDITION** The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. 15c3-3. The Company files its exemption report relying on Footnote 74 of the SEC Release No. 34- 70073 adopting amendments to 17 C.F.R. § 240.17a-5 because the Company limits its business activities exclusively to receiving transaction-based compensation for referring securities transactions to other broker-dealers, 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 15c2-4 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 15c3-3) throughout the most recent fiscal year without exception. # NOTE 3 - RELATED PARTY TRANSACTIONS Investors, a related party through common ownership, is a registered investment advisor (see note 1(a)). Brokerage Services are provided to Investors by the Company. Substantially all expenses have been allocated to the Company from Investors in accordance with a services agreement. This agreement provides that Investors will provide various services and the use of equipment and in return the Company will provide Brokerage Services referred to above. At December 31, 2023, included in the statement of financial condition is a net receivable of \$121,916 due from Investors related to these relationships. # NOTE 4 - CONTINGENCIES The Company was subject to a FINRA dispute resolution arbitration with an investor in funds managed by affiliates of the Company whereby the investor made a claim of approximately \$346,000 plus other costs against the Company regarding, among other things, the suitability of such funds. On August 27, 2015, the Panel granted the Company's Motion to Dismiss in part with respect to all claims except claims related to one fund pursuant to FINRA Rule 12206. The Panel granted leave for the investor to refile claims relating to the specific fund but currently has not refiled claims. # NOTE 5 - SUBSEQUENT EVENTS The Company has evaluated subsequent events after December 31, 2023 through March 27, 2024, the date that the financial statement was issued. There have been no material subsequent events that occurred during such period that would require disclosure in this report or would be required to be recognized in the financial statements as of December 31, 2023. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.