# R.J. O'BRIEN SECURITIES, LLC X-17A-5 (2020-03-02) — Broker-dealer annual report - Company: R.J. O'BRIEN SECURITIES, LLC - Form: X-17A-5 - Filed: 2020-03-02 - Period: 2019-12-31 - Accession: 0001393850-20-000003 - CIK: 1393850 - File #: 8-67587 - Material weakness: No - Auditor: Moss Adams LLP - Auditor location: Dallas, TX - Contact: Augustine Perrotta - Phone: 312-373-5023 - Signed by: Edward Keiley (CFO & FINOP) Original filing: https://www.sec.gov/Archives/edgar/data/1393850/000139385020000003/RJOBrienSecuritiesLLC2019.pdf --- {0}------------------------------------------------ ### **R.J. O'BRIEN SECURITIES, LLC** Report Pursuant to Rule 17a-5(d) Year Ended December 31, 2019 {1}------------------------------------------------ | | Washington, D.C. 20549
ANNUAL AUDITED REPORT | | August 31, 2020
Expires:
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hours per response 12.00 | | |-------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|--------------------------------------------------------------------------------------|--| | | FORM X-17A-5
PART III | | SEC FILE NUMBER
8-67587 | | | | FACING PAGE
Information Required of Brokers and Dealers Pursuant to Section 17 of the
Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | | | | | | REPORT FOR THE PERIOD BEGINNING 01/01/2019 9
MM/DD/Y Y | | MM/DD/Y Y | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME OF BROKER-DEALER: R.J. O'Brien Securities LLC | | OFFICIAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | FIRM I.D. NO. | | | | 222 South Riverside Plaza, Suite 1200 | | | | | | | (No. and Street) | | | | | Chicago | IL
(State) | | 60606
(Zip Code) | | | Edward Keiley (219) 629-0727 | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | (Area Code = Telephone Number) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report® | | | | | Moss Adams LLP | | | | | | | (Name - if individual, state last, first, middle name) | TX | 75254 | | | 14555 Dallas Parkway, Suite 300 Dallas
(Address) | (City) | (State) | (Zip Code) | | | | | | | | | CHECK ONE: | | | | | | Certified Public Accountant
Public Accountant | | | | | | | Accountant not resident in United States or any of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | | | | | \*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 facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid O SEC 1410 (11-05) | UNITEDSTATES | | | | | |------------------------------------|--|--|--|--| | SECURITIES AND EXCHANGE COMMISSION | | | | | | Washington, D.C. 20549 | | | | | | OMB APPROVAL | | | | |---------------------------|-----------------|--|--| | OMB Number: | 3235-0123 | | | | Expires: | August 31, 2020 | | | | Estimated average burden | | | | | hours per response 12.00 | | | | {2}------------------------------------------------ #### OATH OR AFFIRMATION | Edward Kelley | when a man a more and or affirm) that to the best of | |---------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | R.J. O'Brien Securities LLC | my knowledge and helice the accompanying financial statement and supporting schedules portaining to the firm of | | of December 31 | 20 19 19 are true and correct. I further swear (or affirm) that | | classified solely as that of a customer, except as follows: | acither the company nor any parcelor, principal officer or director bas any proprietary interest in any account | | OFFICIAL SEAL
LUCILLE M. CARAVETTE
Notary Public - State of Illnois | | | My Commission Expires 5/13/2020 | Signature | | | CFO & FINOP
Title | | | | | Notary Public | | | This report 3x contains (check all applicable hoxes); | | | (a) Facing Page.
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(b) Statement of Financial Condition, | | | | 7 (c) Statenent of Income (Lass) or, if there is other comprehensive income in the period, a Sarement | | of Comprehensive Income (as defined in \$210.1-02 of Regulation S-X). | | | (d) Statement of Changes in Financial Condition. | (e) Statement of Changes in Stockholders' Rquity or Partners' or Solo Proprietors' Capital. | | (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. | | | (g) Computation of Nel Capital. | | | (h) Computation for Delerminution of Reserve Requirements Pursuant to Rule 15e3-3. | | | (i) Information Relating to the Possession or Control Requirements Under Rale 15c3-3. | | | | (i) A Reconciliation, including appropriate explanation of Not Capital Under Kule 15c3-1 and the | | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 1563-3.
(k) A Recountliation belween the undited Stationents of Financial Cundition with respect to methods of | | consolidation. | | | (1) An Outh or Affirmation. | | | (m) A copy of the SIPC Supplemental Report. | | | | (a) A report describing any material inudequisios found to have existed sime the date of the previous audit. | | | as For confidential treatment of ceriain portions of this filing, see section 240.17a-51e)(3), | ... {3}------------------------------------------------ # **R.J. O'BRIEN SECURITIES, LLC** ## TABLE OF CONTENTS Page | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | 1 | |---------------------------------------------------------|----------------------------------------------------------------------------------------------|---------| | 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 | | SUPPLEMENTAL SCHEDULE | | | | Schedule I: | Computation of Net Capital Under
Rule 15c3-1 of the Securities
and Exchange Commission | 10 - 11 | | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON MANAGEMENT'S EXEMPTION REPORT | 13 | {4}------------------------------------------------ # Report of Independent Registered Public Accounting Firm To the Managing Member R.J. O'Brien Securities, LLC Opinion on the Financial Statements We have audited the accompanying statement of financial condition of R.J. O'Brien Securities, LLC (the "Company") as of December 31, 2019, the related statements of operations, changes in member's equity, and cash flows for the vear then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, 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 the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting fim 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 to 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. #### Opinion on the Supplemental Information The supplemental information in Schedule I has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The information in Schedule I is the responsibility of the Company's management. Our audit procedures include determining whether the information in Schedule I reconciles to the financial statements or the underlying and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in Schedule I. In foming our opinion on the information in Schedule I, we evaluated whether the information in Schedule I, including its form and content is presented in conformity with 17 C.F.R. § 240.17a-5. In our opinion, the information in Schedule I is fairly stated in all material respects in relation to the financial statements as a whole. Dallas, Texas February 28, 2020 We have served as the Company's auditor since 2016. {5}------------------------------------------------ # R.J. O'BRIEN SECURITIES, LLC December 31, 2019 Statement of Financial Condition # ASSETS | Assets: | | |---------------------------------|---------------| | Cash | \$
251,410 | | Firm investments, at fair value | 25,000 | | Prepaid expenses | 1,241 | | Total Assets | \$
277,651 | ### LIABILITIES AND MEMBER'S EQUITY | Liabilities: | | |---------------------------------------|---------------| | Payable from affiliate | \$
1,098 | | Accounts payable and accrued expenses | 14,000 | | | | | Total liabilities | 15,098 | | | | | | | | Member's Equity | 262,554 | | | | | | | | Total Liabilities and Member's Equity | \$
277,651 | {6}------------------------------------------------ # R.J. O'BRIEN SECURITIES, LLC Statement of Operations For the Year Ended December 31, 2019 | Revenues: | | | |--------------------|----------------|--| | Selling commission | \$
20,005 | | | Interest | 516 | | | | | | | | | | | Total revenue | 20,521 | | | | | | | | | | | Expenses: | | | | Operating expenses | 32,306 | | | Professional fees | 18,763 | | | | | | | | | | | Total expenses | 51,069 | | | | | | | Net Loss | \$
(30,548) | | | | | | | | | | {7}------------------------------------------------ # R.J. O'BRIEN SECURITIES, LLC Statement of Changes in Member's Equity For the Year Ended December 31, 2019 | Balance, December 31, 2018 | \$
293,102 | |----------------------------|---------------| | Capital contribution | - | | Net loss | (30,548) | | Balance, December 31, 2019 | \$
262,554 | {8}------------------------------------------------ # R.J. O'BRIEN SECURITIES, LLC Statement of Cash Flows For the Year Ended December 31, 2019 | Cash flows from operating activities | | |----------------------------------------------------------------|----------------| | Net loss | \$
(30,548) | | Adjustments to reconcile net loss to net cash | | | provided (used) by operating activities: | | | Change in assets and liabilities: | | | (Increase) / Decrease in prepaid expense | (750) | | (Increase) / Decrease in Deposit from clearing broker | 250,000 | | (Increase) / Decrease in receivable / (payable) from affiliate | 2,291 | | Increase / (Decrease) in accounts payable and accrued expenses | 764 | | Net cash used by operating activities | 221,757 | | Cash flows from investing activities | | | Net cash provided (used)by investing activities | - | | Cash flows from financing activities | | | Net cash provided (used)by investing activities | - | | Net decrease in cash | 221,757 | | Cash at beginning of period | 29,653 | | Cash at end of period | \$
251,410 | {9}------------------------------------------------ ### R.J. O'BRIEN SECURITIES, LLC Notes to Financial Statements December 31, 2019 ### Note 1 - Summary of Significant Accounting Policies The accounting and reporting policies of R.J. O'Brien Securities, LLC (the "Company") conform to U.S. generally accepted accounting principles and to general practices within the securities industry. The following is a description of the more significant of those policies that the Company follows in preparing its financial statements. The financial statements present the financial position and results of operations of the Company, a single-member Delaware limited liability company. #### **Organization** The Company, a wholly-owned subsidiary of JVMC Holdings Corp. (the "Parent"), is a registered broker-dealer in securities under the Securities Exchange Act of 1934. The Company's engages in two types of business. The Company serves as lead selling agent for a commodity pool administered by an affiliated entity, which engages in the trading of commodity futures and options contracts. Through April 2019, the Company facilitated trades in equity options for clients of an affiliated entity on an agency basis that were given up to another broker-dealer for clearing. As of December 31, 2019, the Company did not have any significant operations. In addition, the Company does not carry any margin accounts and does not hold funds or securities for customers. The Parent makes capital contributions as necessary to cover any regular operating or regulatory requirements. #### **Fair Value Measurements** Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The investment assets and liabilities of the Company are measured and reported at fair value. #### **Income Taxes** The Company is organized as a limited liability company and has no federal tax liability. State tax liabilities are determined under individual state laws of which none were payable. Temporary differences between the amounts reported in the financial statements and the tax basis of assets and liabilities result in deferred taxes. The Company is a single-member limited liability company, which is disregarded for federal income tax purposes. The Company has reviewed the guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. The Company has evaluated such implications for all open tax years and has determined there is no impact to the Company's financial statements as of December 31, 2019. Any potential interest and penalty associated with a tax contingency, should one arise, would be included as a component of income tax expense in the period in which the assessment arises. The Company's income tax returns generally remain subject to examination by the regulatory authorities for three to five years from the date the return is due including extensions. {10}------------------------------------------------ ### R.J. O'BRIEN SECURITIES, LLC Notes to Financial Statements December 31, 2019 #### Note 1 - Summary of Significant Accounting Policies, continued #### **Revenue Recognition** The Company follows Accounting Standards Codification (ASC) Topic 606, *Revenue from Contracts with Customers* (ASC 606). ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance requires an entity to follow a five step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligation; in determining the transaction price, an entity may include variable consideration only to extent that is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved and (e) recognize revenue when (or as) the Company satisfies a performance obligation. Revenue from contracts with customers includes commission income primarily from give-up transactions. The recognition and measurement of revenue is based on the assessment of individual contract items. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate the transaction process where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable considerations should be applied due to uncertain future events. The Company earns commissions for facilitating equity options trading for the clients of an affiliated entity*.* Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. The Company accrues interest on its investments in the period when earned. Additionally, the Company acts as a wholesale broker-dealer facilitating transactions for its affiliate, OASIS Investment Strategies LLC. The Company does not earn any commissions or compensation for these transactions. The economic conditions which affect the firm's operations are related to the overall strength of the financial markets. All investments in money market funds are recorded at their estimated fair value, as described in Note 4. #### **Use of Estimates** The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### Note 2 - Related Parties The Company maintains an expense sharing agreement with an affiliated entity, R.J. O'Brien & Associates LLC (RJA), under which RJA pays certain expenses on behalf of the company. The Company had a payable of \$1,097 outstanding under this agreement at December 31, 2019. The Company and its affiliates are related parties under common control of the Parent and the existence of that control could create operating results and financial positions different than if the entities were autonomous. {11}------------------------------------------------ ### R.J. O'BRIEN SECURITIES, LLC Notes to Financial Statements December 31, 2019 ### Note 3 - Net Capital As a broker-dealer, the Company is subject to the Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital. Rule 15c3-1 requires that the Company maintain minimum net capital, as defined, of \$5,000 at December 31, 2019, and requires that the ratio of "aggregate indebtedness" to "net capital," as those terms are defined by the Rule, may not exceed 15 to 1. At December 31, 2019, the Company had net capital of \$260,813, which was \$255,813 in excess of its required net capital and its ratio of indebtedness to net capital was 0.0579 to 1. #### Note 4 - Fair Value Measurements The Company has established a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the reported date. The three levels are defined as follows: Level 1 – quoted prices in active markets are available for identical assets or liabilities as of the reported date. Level 2 – quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as of the reported date. Level 3 – prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the reported date. These financial instruments do not have active markets and are measured using management's best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. An asset's or liability's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Company's investments consist of a money market mutual fund and are valued under the market approach through the use of unadjusted quoted market prices available in an active market and are classified with Level 1 of the valuation hierarchy. There were no transfers into or out of the Level 1, 2 and 3 categories in the fair value measurement hierarchy for the year ended December 31, 2019. The Company did not hold any financial liabilities measured at fair value at December 31, 2019. {12}------------------------------------------------ Supplemental Information Pursuant of Rule 17a-5 of the Securities Exchange Act of 1934 as of December 31, 2019 {13}------------------------------------------------ ### **Schedule I** # As of December 31, 2019 of the Securities and Exchange Commission Computation of Net Capital Under Rule 15c3-1 R.J. O'BRIEN SECURITIES, LLC ### **COMPUTATION OF NET CAPITAL** | Total member's equity qualified for net capital | \$
262,554 | |------------------------------------------------------|---------------| | Add: | | | Other deductions or allowable costs | - | | Total capital and allowable subordinated liabilities | 262,554 | | Deductions and/or charges: | | | Non-allowable assets: | | | Prepaid expense | 1,241 | | | 1,241 | | | | | Net capital before haircuts on securities positions | 261,313 | | Haircuts on securities (computed, where applicable, | | | pursuant to Rule 15c3-1(f)) | 500 | | Net capital | \$
260,813 | | | | | AGGREGATE INDEBTEDNESS | | | Items included in statement of financial condition: | | | Accounts payable and accrued expenses | \$
15,098 | | Total aggregate indebtedness | \$
15,098 | {14}------------------------------------------------ # **Schedule I (continued)** R.J. O'BRIEN SECURITIES, LLC Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission As of December 31, 2019 ## **COMPUTATION OF BASIC NET CAPITAL REQUIREMENT** | Minimum net capital requirement required (6 2/3% of total
aggregate indebtedness) | \$
1,007 | |--------------------------------------------------------------------------------------|---------------| | Minimum dollar net capital requirement of | | | reporting broker or dealer | \$
5,000 | | Net capital requirement (greater of above two | | | minimum requirement amounts) | \$
5,000 | | Net capital in excess of required minimum | \$
255,813 | | Net capital less greater of aggregate indebtedness
or 120% of minimum net capital | \$
254,813 | | Ratio: Aggregate indebtedness to net capital | 0.0579 to 1 | ### **RECONCILIATION WITH COMPANY'S COMPUTATION** There were no material differences in this computation of net capital and the corresponding computation prepared by the Company and included in the unaudited Form X-17A-5 Part II FOCUS Report as of the same date. {15}------------------------------------------------ Report of Independent Registered Public Accounting Firm On Management's Exemption Report Required By SEC Rule 17a-5 Year Ended December 31, 2019 {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) # Report of Independent Registered Public Accounting Firm To the Managing Member R.J. O'Brien Securities, LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) R.J. O'Brien Securities, LLC (the Company) identified the following provisions of 17 C.F.R. \$ 15c3-3(k), under which the Company claimed an exemption from 17 C.F.R. § 240.15c3-3: (k)(2)(i) and (k)(2)(ii) (the exemption provisions), and (2) the Company stated that it met the identified exemption provisions throughout the most recent fiscal year without exception. The Company'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 the Company'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)(i) of Rule 15c3-3 under the Securities Exchange Act of 1934. Dallas, Texas February 28, 2020 {17}------------------------------------------------ #### MANAGEMENT'S EXEMPTION REPORT R.J. O'Brien Securities, LLC (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5 "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.17a-5{d){1) and (4). To the best of its knowledge and belief the Company states the following: - 1) The Company claimed an exemption from 17 C.F.R. 5240.15c3-3 under the following provisions of 17 C.F.R. §240.15c3-3(k){2}{i) and 17 C.F.R. §240.15c3-3{k}(2){ii) - 2) The Company met the identified exemption provisions in 17 C.F.R. §240.15c3-3(k) throughout the period from January 1, 2019 to December 31, 2019 R.J. O'Brien Securities, LLC I, Edward Keiley, swear (or affirm) that, to the best of my knowledge and belief, this Exerciption Report is true and correct. By: Title: FINOP and Chief Financial Officer 2020 Date: Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.