# FIRST CHICAGO ADVISORS, INC. X-17A-5 (2019-02-25) — Broker-dealer annual report

- Company: FIRST CHICAGO ADVISORS, INC.
- Form: X-17A-5
- Filed: 2019-02-25
- Period: 2018-12-31
- Accession: 0001387764-19-000001
- CIK: 1387764
- File #: 8-67528
- Material weakness: No
- Auditor: Marvin M. Siegel
- Auditor location: Wilmette, IL
- Contact: Steve Knoop
- Phone: 3127390100
- Signed by: Steven Knoop (President)

Original filing: https://www.sec.gov/Archives/edgar/data/1387764/000138776419000001/PublicAnnual18.pdf

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PUBLIC UNITEDSTATES SECURITIES AND EX CHANG ECOMMISSION Washington, D.C. 20549

| ANNUAL AUDITED REPORT |
|-----------------------|
| FORM X-17A-5          |
| PART Ill              |

| OMB Number:              |  | 3235-0123                  |
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| Expires:                 |  | August 31, 2020            |
| Estimated average burden |  |                            |
|                          |  | hours per response   12.00 |
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OMB APPROVAL

| SEC ALE NUMBER |  |
|----------------|--|
| B-67528        |  |

FACING PAGE

Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder

| MM/DD/YY<br>A. REGISTRANT IDENTIFICATION<br>NAME OF BROKER-DEALER: First Chicago Advisors, Inc.<br>ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)<br>(No. and Street)<br>IL<br>(State)<br>1 AME A D TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THlS REPORT<br>B. ACCOUNTANT IDENTIFICATION<br>INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | AND ENDING ~~~~~<br>60010<br>(Zip Code)<br>(312)739--0100                                                | 12/31/18 ~~~~~~<br>MM/DD/YY<br>OFFICIAL USE ONLY<br>FIRM l.D. NO.<br>(Area Code - Telephone Number) |
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|                                                                                                                                                                                                                                                                                                                                                                                                   | IL                                                                                                       | 60091                                                                                               |
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|                                                                                                                                                                                                                                                                                                                                                                                                   | Wilmette<br>Accountant not resident in United States or any of its possessions.<br>FOR OFFICIAL USE ONLY | (Name- if individual. state last.first, middle name)                                                |

*\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facrs and circumstances relied on as the basis for the exemption. See Section 240. 17a-5(e)(2)* 

SEC 1410 (06-02)

Potential persons who are to respond to the collectlon of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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#### **OATH OR AFFIRMATION**

| I, Steven Knoop<br>, swear (or affirm) that, to the .best of                                                                                                                                                                          |  |                                                                                                                                 |  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|---------------------------------------------------------------------------------------------------------------------------------|--|
| my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of<br>Firs~~~<br>t Chicago Advisors, Inc.                                                                                |  | , as<br>--=--~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-                                                                             |  |
| of December 31                                                                                                                                                                                                                        |  | are true and correct. l further swear (or affirm) that                                                                          |  |
| classified solely as that of a customer, except as follows:                                                                                                                                                                           |  | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account      |  |
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|                                                                                                                                                                                                                                       |  | 7~<br>~<br>'~~<br>Signature                                                                                                     |  |
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|                                                                                                                                                                                                                                       |  | President                                                                                                                       |  |
|                                                                                                                                                                                                                                       |  | Title                                                                                                                           |  |
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| This report** contains (check all applicable boxes):                                                                                                                                                                                  |  |                                                                                                                                 |  |
| D (a) Facing Page.                                                                                                                                                                                                                    |  |                                                                                                                                 |  |
| D (b) Statement of Financial Condition.<br>D (c) Statement oflncome (Loss) or, if                                                                                                                                                     |  | tbere is other comprehensive income in the period(s) presented, a Statement                                                     |  |
| of Comprehensive Income (as defined in §210.1-02 of Regulation S-X).                                                                                                                                                                  |  |                                                                                                                                 |  |
|                                                                                                                                                                                                                                       |  |                                                                                                                                 |  |
| B (d) Statement of Changes in Financial ConcLition.<br>( e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.<br>D (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. |  |                                                                                                                                 |  |
|                                                                                                                                                                                                                                       |  |                                                                                                                                 |  |
| § (g) Computation of Net Capital.<br>(h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.                                                                                                               |  |                                                                                                                                 |  |
| (i) lnformation Relating to the Possession or Control Requirements Under Rule 15c3-3.                                                                                                                                                 |  |                                                                                                                                 |  |
| Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.                                                                                                                                             |  | D U) A Reconciliation, including appropriate explanation oftbe Computation ofNet Capital Under Rule 15c3-l and the              |  |
|                                                                                                                                                                                                                                       |  | D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of           |  |
| consolidation.                                                                                                                                                                                                                        |  |                                                                                                                                 |  |
| D (1)<br>An Oath or Affirmation.                                                                                                                                                                                                      |  |                                                                                                                                 |  |
| D (m) A copy of the SIPC Supplemental Report.                                                                                                                                                                                         |  |                                                                                                                                 |  |
| D                                                                                                                                                                                                                                     |  | (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. |  |
| **For conditions of confidential treatment of certain portions of this filing, see section 240. I 7a-5(e)(3).                                                                                                                         |  |                                                                                                                                 |  |

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### FIRST CID CA GO ADVISORS, INC. REPO~T ON ExAMINATiON FOR Tl:iE 12 MON1Rs ENDED DECEMBER 31, 2oi8

Public

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# **MARVIN M. SIEGEL CPA P.C.**

Certified Public Accountants . 3330 Old Glenview Road, Suite 7 Wilmette, IL 6009 i 847-256-8355

To: The Board of Directors Barrington, Illinois

#### **Independent Auditor's Report**

We have audited the accompanying statement of financial condition of First Chicago Advisors, Inc. (an iUinois·corporation), as ofDecember 31, 2018, anq the related statements of income, changes in·fmancial condition, an.d statement changes in stockholders\_ equity for the year then ended that you are filing pursuant to Rule 17a-5 ilnder the Securities Exchange Act of 1934. These financial statementS are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based.on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America,, and with auditing standards of the Public Company Accounting Oversight Bqard. Those standards require that we plan and perform the audit to obtain reasonable asstirance about whether the financial stlltements are free of material misstatement. An audit includes examining, on .test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial presentation. We believe that our audit provides a reasonabkbasis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Chicago Advisors, Inc., as of December 31, 2018, and the results of its operations and its cash flows for the year then ended, in conformity with accoU.nting principles generaliy accepted in the United States of ArneriCa.

Our audit was conducted for the purpose of forming an opinion of the basic financial statements taken as a Whole. The s\tpplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements, but *is*  supplementary information·required by Rule 17a-5 of the Securities and Exchange Commission. Such information has been subjected to the auditing procedures applie\_d in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements talc.E ~ a ~ole.

Wilmette, Illinois .b.- ,\'.'.. February 10, 2019

Steven M. Siegel Ce1tified Public Ac;;countant

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### Statement of Financial Condition

## **FIRST CHICAGO ADVISORS, INC. Balance Sheet As of December 31, 2018**

ASSETS

| CURRENT ASSETS               |                        |                  |    |        |
|------------------------------|------------------------|------------------|----|--------|
| Cash in Checking             |                        |                  |    |        |
| UBS Money Market             |                        | 4,172<br>\$<br>· |    |        |
| Harris Bank                  |                        | · 11 051         |    |        |
| Total Current Assets         |                        |                  | \$ | 15,223 |
| FIXED ASSETS                 |                        |                  |    |        |
| Computer                     |                        | 2,602            |    |        |
| Accumulated Depreciation -   | Computer               | (2,028)          |    |        |
| Equipment                    |                        | 2,467            |    |        |
| Accumulated Depreciation -   | Equipment<br>\,        | (2,467}          |    |        |
| Total Fixed Assets           |                        |                  |    | 574    |
|                              |                        |                  |    |        |
|                              |                        |                  |    |        |
| TOTAL ASSETS                 |                        |                  | \$ | 15,797 |
|                              |                        |                  |    |        |
|                              | LIABILITIES AND EQUITY |                  |    |        |
| CURRENT LIABILITIES          |                        |                  |    |        |
| Accrued Expenses             |                        | \$<br>3,540      |    |        |
| Total Current Liabilities    |                        |                  | \$ | 3,540  |
|                              |                        |                  |    |        |
| EQUITY                       |                        |                  |    |        |
| Common Stock                 |                        | 1,000            |    |        |
| Additional Paid-In Capital   |                        | 321<br>,016      |    |        |
| Retained Earnings            |                        | {309,759)        |    |        |
| TOTAL EQUITY                 |                        |                  |    | 12,257 |
|                              |                        |                  |    |        |
| TOTAL LIABILITIES AND EQUITY |                        |                  | \$ | 15,797 |
|                              |                        |                  |    |        |

(See Independent Auditor's Report.)

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### **MARVIN M. SIEGEL CPA P .C.**

Certified Public ·Accountants · 3330 Old Glenview Road, Suite 7 Wilmette, IL 60091 847-256-8355

To the Board of Directors:

In planning and performing our audit of the financial statements of First Chicago Advisors, Inc. (the Company), as of and for the year ended December 31, 2018, in accordance with audit standards generally accepted in the United States of America, we consiqered the Company's internal control over fl.naricial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we do not express an opinion on the effectiveness of the Gompany's internal control.·

Also, as required by Rule 17a-5(g)(l) of the Securities and Exchange Commission (SEC), we have made a study of the practices and procedures followed by the Company, including consid~ration of control activities for safeguarding securities. This study included tes~s of such practices and ptocedures that we considered relevant to the objectives state<fin Rule 17a-5Cg), in making the periodic computations of aggregate indebtedness and net capital under Rule 17a~3(a)(l 1) and for determining compliance with the exemptive provisions ofRUle.15c3-3. Because the Company does not carry securities accounts for customers or perform custodial functions relating to customer securities, we did hot review the practices and procedures followed by the Company in any of the following: (1) making quarterly securities ex-ations, counts, verifications, and compariso.ns and recordation of differences required by Ri.tle 17a-13; and (2) · complying wit}). the requirements for prompt payment for securities under Section 8 of Federal Reserve Regulation T of the Board of Governors of the Federal Reserve System.

The management of the Company is responsible for establishing and maintaining internal control and the practices and procedures referred to in the preceding paragraph. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls and of the practices and procedures referred to in the preceding paragraph, and to assess whether those practices and procedures can be expected to achieve the SEC's above-mentioned objectives. Two of the objectives of internal control and the practices and procedures are to provide management with reasonable, but not absolute, assurance that assets for which the Company has responsibility are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with ~anagement's authorization and recorded properly to pennit the preparation of financial statements in confonnity with generally accepted accounting principles. Rule 17a-S(g) lists additional objectives of the practices and procedures listed in the preceding paragraph.

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Because of inherent limitations in internal control and the practices and procedures referred to al2ove, en-or of fraud may occur and not be detected. Also, projection of any evaluation of them to future periods is subject to the risk that they may become inadequat~ because of the changes in conditions or that the effectiveness of their design and operation may deteriorate.

A *control deficiency* exists when the design or operation of control does not allow management or employees, in the normal course of performing their assigned function, to prevent or detect misstatements on a timely basis. A *significant deficiency* is a control deficiency, or combination of control deficiencies, that adversely affects the entity's . ability to initiate, authorize, record, process or report financial data reliably in accordance with gen~rally accepted ac<;:-ounting principles such that 'there is more than a remote likelihood that a misstatement of the entity's financial st~tements that is more than inconsequential will not be prevented or detected by the entity's internal control.

A *material weakness* is a significant deficiency, or combination of significant deficiencies, that result in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control.

Our consideration of internal control was for the limited purpose described in the first and second paragraphs and would not necessarily identify all deficiencies in internal control that might be material weaknesses'. We did not identify any deficiencies in intemal control and activities for safeguarding securities that we consider to be material weaknesses, as defined above.

We understand that practices and procedures that accomplish the objectives refened to in the second paragraph of this report are considered by the SEC to be adequate for its purpose in accordance with the Securities Exchange Act of 1934 and related regulations, and that practices and procedures that do not accomplish such objectives in all material respects indicate a material inadequacy for such purposes. Based on *this* understanding and on our study, we believe that the Company's practices and procedures, as described in the second paragraph of *this* report, were adequate at December 31, 2018, to meet the SEC's objectives.

This report is intended solely for the information and use of management, the Securities and Exchange Commission, the National Association of Securities Dealers, Inc., and other regulatory agencies that rely on RuJe 17a-5(g) under the Securities Exchange Act·of 1934 in their regulation of registered brokers and dealers, and is not intended to be and should not be used by anyone other than these specified parties.

l~ Q Stlvtm M. Siegel

Wilmette, Illinois February 10, 2019

Certified Public Accountant

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## Notes to Financial Statements December 31, 2018

#### Note 1: Organization and Nature of Business

The Company was formed on January 18, 2005, as a corporation under the laws of the State of lliinois Act.

The terms of the Company is perpetual unless and until dissolved in accordance with the provisipn of the member's operating agreement.

The Cotnpany is registered as a nonclearing broker/dealer and was approved as a member of the National Association of Securities Dealers, Inc. (NASD), in July 2007.

The Company was formed for the purpose of assisting in the private placement of securities, along with other securities business activities, such as mergers, acquisitions and other corporate reorganization transactions including financial advisory services.

The Company is wholly owned by Steven Knoop.

#### Note 2: Summary of Significant Accounting Practices

A summary of the Company's significant accounting policies applied in the preparation of the accompanying financial statements follows:

*Accrual basis of accounting.* The Company uses the accrual basis of accounting.

*Property and equipment.* Pi:operty and equipment items are stated at cost and are depreciated. over their estimated useful lives using the straight"line depreciation method.

*Income taxes.* The Company has elected to be treated as a subcbapter S corporation for income tax purposes. Generally, any taxable income of a subchapter S corporation flows through to the shareholder and is reported on personal income tax returns.

*Statement of cash flows.* For the purposes of the statement of cash flows, the Company considers only bank accounts to be cash equivalents.

#### Note 3: Net Capital Requirements

The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-1). Under this rule, the company is required to maintain "net capital" equivalent to \$5,000 or 6 2/3% of "aggregate indebtedness," whichever is greater, as these terms are defined.

Net capital and aggregate indebtedness change from day to day, but at December 31, 2018, the Company had excess net capit{ll requirements of \$6,600.00, which includes

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\$83.00 in money market haircuts not included in the December 31, 2018, amended focus report. The net capital rule may effectively restrict the payment of shareholder capital\_ withdrawals.

#### Note 4: Employee Benefit Plan

The Company maintains a SEP IRA profit-sharing plan for all eligible emp1oyees. Employees are eligible to participate in the plan if they are 21 years of age, employed as regular full-time employe¢s, and have completed 30 days of service. However, no contributions were made for the\_year ended December 31,. 2018.

#### Note 5: Subsequent Events

None.

#### Note 6: E~emption from SEC Rule 15c3-3 .

Th~ compap.y does not engage in any securiqes transactions that require clearing of monies. The company is an introducing broker dealer, solely engaged 1n mergers and acquisitions and private placements. The company carries no ~ustomer accotints and does no clearing.for customer funds or securities. Therefore, it is exempt from SEC Rule 15c3-3 under provisions of Rule 15c3-~ (k) (2) (i).

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# **MARVIN M.SIEGRL CPAP.C.**

Certified Puoiic Acc0tµitants 3330 O~d. Glenview Ro~d, Suite 7 Wilm~tte, tL 60091 847-256-8355

February 10, 2019

To Whom It May Concern:

We have reviewed management's statements, included in the accompanying December 31, 2018, letter titled "Exemption from SEC Rule 15c3-3" (th~ "Exemption Letter Report"), in which (1) First Chicago Advisors, Inc. ("First Chicago") identified the following provisions of 17 C.F.R. § .15c3-3(k) under which First Chicago claimed an exemption from 17 C.F.R. § 240.15c3-3 (k) *(2) (i)* (the "exemption provisions") and (2) First' Chicago stated that First Chicago met th~ identified exemption provisions throughout the most recent fiscal year without exception. First Chicago's management is responsible for compliance with the exemption provisions and its statements.

Our review was cpnducted 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 First Chlcago's compliance with the exeµiption provisions. A review is substantially less in scope than an examination, the objective of which is the expr~ssion of an opinion on management's statements. Accordingly, we do not express such an opllrion.

Based on our review, we are not aware of any material mqdifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, · based on the provis'ions set forth in paragraph (k) *(2) (i)* of Rule 15c3-3 under the Securities Exchange Act of 1934.

I <sup>I</sup>

Steven M. Siegel, CPA Wilmette, Illinois


Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.