# FGC SECURITIES, LLC X-17A-5 (2019-02-27) — Broker-dealer annual report - Company: FGC SECURITIES, LLC - Form: X-17A-5 - Filed: 2019-02-27 - Period: 2018-12-31 - Accession: 0001523726-19-000001 - CIK: 1523726 - File #: 8-68897 - Material weakness: No - Auditor: Raphael Goldberg Nikpour Cohen and Sullivan, CPA's PLLC - Auditor location: Woodbury, NY - Contact: Steven Bender - Phone: 6462907248 - Signed by: John Foley (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1523726/000152372619000001/fgcsaudit2018public.pdf --- {0}------------------------------------------------ UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Augus 31, 2020 Estimated average b rden hours er res nse ..... 12.00 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** SEC FILE NUMBER a-68897 r FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Ruic I 7a-5 Thereunder | REPORT FOR THE PERIOD BEGINNING January 1, 2018 | | AND ENDING December 31 | , 2018 | | |-----------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|------------------------|-------------------------------|--| | | MM/DDNY | | MM/DDNY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER-DEALER: FGC Securities, LLC | | | OFFICIAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM l.D. NO. | | | 915 Broadway, Suite 1002 | | | | | | | (No. and S1rcct) | | | | | New York | NY | 10010 | | | | (City) | (Slate) | (Zip Code) | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Steven C Bender 646.290.72248 | | | | | | | | | (Arca Code- TelephJnc Number) | | | | B. ACCOUNT ANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
Raphael Goldberg Nikpour Cohen & Sullivan, CPA's PLLC | (Nome - if i11divid11al. state last. jil'st. middle name) | | | | | 97 Froehlich Farm Blvd | Woodbury | NY | 97
11 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE:
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D | Accountant not resident in Un ited States or any of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | *•claims/or exemption from the requirement that the annual report be covered by the opinion of an independent public L countant mus/ be supported by a statement of facls and circumstances relied on as lhe basis/or the exemplion. See Section 240. I 7a-5(e}(2)* > Potential persons who are to respond to the collec tion of Information contained In this form are not required to respond unless the form displays a currentlyvalld OMB control number. SEC 1410 {11-05) {1}------------------------------------------------ #### **OATH OR AFFIR MATION** | 1, John Foley | , swear (or affirm) that, to the best of | |---------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | FGC Securities, LLC | my knowledge and belief the accompunying financial statement and supporting schedules pertaining to the firm of
, as
I | | of December 31 | 2018
a re true and correct. I further swear (or affirm) that | | | neither the company nor any partner. proprietor, principal offi cer or d irector has any proprietary interest in any account
classi tied solely as that of a customer, except as follows: | | None | | | | | | | | | 0 (a) Facing Page.
12] (b) Statement of Financial Condition. | CEO
Title
NEIL SCHNEJn~A
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This report** contains (check all applicable boxes):
No. 01 SC64'ft!)1 :{Ai
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MyCommlulonbpue~ 10-()9-2021 | | § (g) Computation of Net Capital.
D U) | D (c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X).
8 (d) Statement of Changes in Financial Condition.
(e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
D (f) Statement of Clrnnges in Liabilities Subordinated to Claims of Creditors.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule l 5c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule I 5c3-3.
A Reconciliation, in cluding appropriate explanation of the Computation of Net Capital Under Ru le I 5c3-I and the
Computation for Oe·termination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3. | | consolidation.
0 (I) An Oath or Affirmation.
D (m) A copy of the SI PC Supplemental Report. | D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
I
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). | | | | {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) Mark C. Goldberg, CPA Mark Raphael, CPA Floria Samii-N ikpour, CPA Allan B. Cohen, CPA Michael R. Sullivan, CPA Founding Partner: Melvin Goldberg, CPA Anita C. Jacobsen, CPA ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Members of FGC Securities, LLC ## Opinion on the Financiall Statement We have audited the accompanying statement of financial condition of FGC Securities, LLC (the "Company") (a limited liability company), as of December 31 , 2018, and the related notes to the financial statement. In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of FGC Securities, LLC as of December 31, 2018, in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion This financial statement is the responsibi lity of the Company's management. Our responsibility is to express an opinion on the Company'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 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 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. Raphael Goldberg Nikpour Cohen & Sullivan Certified Public Accountants PLLC We have served as the Company's auditors since 2016 Woodbury, New York February 26, 2019 {3}------------------------------------------------ ### **STATEMENT OF FINANCIAL CONDITION** ### **December 31, 2018** | Assets | | |------------------------------------------------------------|-----------------| | Cash | \$
2,062,966 | | Deposits with clearing broker | 50,279 | | Account
s receivable | 1, 133,155 | | Fixed assets (net of accumulated depreciation of \$45,510) | 11,061 | | Prepaid expenses and other | 102,624 | | Total assets | \$
3,360,085 | | Liabilities and member's equity | | | Liabilities: | | | Account
s payable | \$
49,097 | | Accrued commission payable | 425,000 | | Due to Parent | 7,000 | | Due to clearing broker | 4,550 | | Other current !liabilit
ies | 59,54
2 | | Total liabilities | 5,189
54 | | Member equity | 2,814,896 | | Total liabilities and member's equity | \$
3,360,085 | The accompanying notes are an integral part of this financial statement . {4}------------------------------------------------ ## NOTES TO THE FINANCIAL STATEMENTS ## DECEMBER 31. 20 18 ## I. Organization and Nature of Business Activity FGC Securities, LLC (the "Company") is a Limited Liability Company formed in the State of Delaware. The Company is a bro ker-dealer registered with tlhe Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA" ). The Company is wholly-owned by FGC Holdings LLC (the "Member"). The Company received its FINRA approval for membership on November 2 1, 2012. The Company operates under the provisions of Paragraph (k) (2) (ii) of Rule 15c3-3 of the SEC and, accordingly, is exempt from the remaining provisions of that rule. The Company has agreed to limit its business to brokering corporate securities over-the-counter and engaging as a put and call broker solely on behalf of institutional investors. ## 2. Summary of Significant Accounting Policies A. Revenue Recognition Commission income (and the recognition ofrelated income and expenses) is recorded on a settlement date basis, generally the third business day following the transaction date. Any receivable for such transactions is evaluated by management for collectability. There is no material difference from trade date basis as required by generally accepted accounting principles ("GAAP"). B. Cash and Cash Equivalents The Company considers its investments in financial instruments with original maturities of less than ninety 90 days when issued to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk related to cash. C. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets {5}------------------------------------------------ #### NOTES TO THE FINANCIAL STATEMENTS #### DECEMBER 31. 20 18 and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. D. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board {"FASB") Accounting Standards Updated ("ASU") issued ASU No. 2016-02, Leases (Topic 482), which supersedes the existing guidance for lease accounting. ASU 2016-02 requires lessees to recognize leases w ith terms longer than 12 months on their balance sheets. It requires different patterns of recording lease expense for finance and operating leases. It also requires expanded lease agreement disclosure. Lessor accounting is largely unchanged. ASU is effective for the Company as of its year ending December 3 1, 201 9. Management has determined that ASU 201 6-02 will not have a material impact on the Company's fi nancial statements. 3. Income Taxes No provision for federa l and state income taxes bas been made since the Company is not a taxable entity. As a single member limited liability company, the member is individually liable for the taxes on the Company's income or loss. However the company is subject to New York City Unincorporated Business Tax and, when applicable, a provision is included in the statement of operations. 4. Commitments and Contingencies The Company currently is leasing its premises on a three year, two month term beginning March 2017. Rent expense for the year ended December 31 , 2018 amounted to \$ 194,358 and is reported as occupancy on the statement of operations. | Future lease commitments | Year | Amount | |--------------------------|-------|---------------| | | 2019 | \$19
1,895 | | | 2020 | 191,895 | | | Total | \$383 790 | The Company had no other lease or equipment rental commitments, no underwriting commitments, and no contingent liabilities and had not been named as a defendant in any lawsuit at December 3 'I , 201 8 or during the year then ended. {6}------------------------------------------------ ### NOTES TO THE FINANCIAL STATEMENTS ## DECEMBER 31. 20 18 ## 5. Financial Jnstmments with Off-Balance-Sheet Credit Risk As a securities broker, the Company is engaged in arranging for the buying and selling of securities for a diverse group of institutional investors. The Company's transactions are introduced to a clearing broker/dealer. The Company's exposure to credit risk associated with non-performance of customers in fulfi lling their contractual obligations pursuant to securities transactions can be directly impacted by volatile trading markets which may impair the customers' ability to satisfy its obligations to the Company and the Company's ability to liquidate the collateral at an amount equal to the original contracted amount. The Company seeks to control the aforementioned risks by monitoring all transactions entered into on a daily basis and insuring that no incorrect trades are recorded. ## 6. Net Capital Requirement The Company is subject to the SEC's Net Capital Rule l 5c3-1, 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 l. At December 3 1, 2018, the Company's net capital of \$ 1,993,056 which was. \$1 ,956,71 0 in excess of its required net capital of \$36,346. The Company's aggregate indebtedness to net capital ratio was .27 to l. The Company does not handle cash or securities on behalf of customers. Therefore, the Company is exempt from SEC Rule I 5c3-3. ## 7. Reserve Requirement Computation and Possession and Control Requirements The Company is registered with FINRA as a Broker Dealer exempt from SEC Rule I 5c3-3 under Section (k)(2)(ii). Therefore, they are not required to compute Reserve Requirements nor are they subject to the Possession or Control Requirements under SEC Rule 15c3-3. {7}------------------------------------------------ #### NOTES TO THE FINANCIAL ST A TEMENTS #### DECEMBER 31, 2018 ## 8. Fixed Assets Fixed assets are stated at cost, less accumulated depreciation. Depreciation is based on the straight-line method over the estimated useful lives of tbe assets. Fixed assets consist of the following: | Furniture and fixtures | \$56,571 | | |--------------------------------|--------------|--| | Less: Accumulated depreciation | (45,510) | | | Net fixed assets | \$11
,061 | | Depreciation expense for the year ended December 31, 2018 was \$12,805. ## 9. Subsequent Events The Company bas evaluated events and transactions subsequent to year end and no events have been identified which require disclosure. ## l 0. Revenue Recognition (ASC 606) Effective January 1, 2018, the Company adopted FASB ASC 606, *Revenue from Contracts with Customers.* The new revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, ( d) allocate the transaction price to the performance obligations in the contract, and ( e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The new revenue recognition guidance does not apply to revenue associated with financial instruments, interest income and expense, leasing and insurance contracts, The Company earns commissions by way of trade executions for institutional customers that is recognized at the point in time that execution is completed. Payment for revenue is upon execution. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.