# ALTRUIST FINANCIAL LLC X-17A-5 (2023-10-03) — Broker-dealer annual report

- Company: ALTRUIST FINANCIAL LLC
- Form: X-17A-5
- Filed: 2023-10-03
- Period: 2023-06-30
- Accession: 0001757812-23-000004
- CIK: 1757812
- File #: 8-70244
- Type: Broker-dealer
- Material weakness: Yes
- Auditor: BDO USA, P.C.
- Auditor location: LOS ANGELES, CA
- Contact: Jason Geringer
- Phone: 9179688801
- Email: jason.geringer@altruist.com
- Website: altruist.com
- Signed by: Mazi Bahadori (Chief Executive Officer)

Original filing: https://www.sec.gov/Archives/edgar/data/1757812/000175781223000004/AF_FS_PUBLIC_0623.pdf

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|                                                                                                                                     | UNITED STATES                                                |                     | 0MB APPROVAL                                                                |  |  |
|-------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|---------------------|-----------------------------------------------------------------------------|--|--|
|                                                                                                                                     | SECURITIES AND EXCHANGE COMMISSION<br>Washington, D.C. 20549 |                     | 0MB Number: 3235-0123<br>Expires: Oct. 31, 2023<br>Estimated average burden |  |  |
|                                                                                                                                     | ANNUAL REPORTS                                               |                     | hours per response: 12                                                      |  |  |
|                                                                                                                                     | SEC FILE NUMBER                                              |                     |                                                                             |  |  |
|                                                                                                                                     | FORM X-17A-5<br>8-70244                                      |                     |                                                                             |  |  |
|                                                                                                                                     | PART Ill                                                     |                     |                                                                             |  |  |
|                                                                                                                                     | 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 07 /01 /22                                                                                          |                                                              | AND ENDING 06/30/23 |                                                                             |  |  |
|                                                                                                                                     | MM/DD/VY                                                     |                     | MM/DD/VY                                                                    |  |  |
|                                                                                                                                     | A. REGISTRANT IDENTIFICATION                                 |                     |                                                                             |  |  |
| NAME OF FIRM: ALTRUIST FINANCIAL LLC                                                                                                |                                                              |                     |                                                                             |  |  |
|                                                                                                                                     |                                                              |                     |                                                                             |  |  |
| TYPE OF REGISTRANT (check all applicable boxes}:<br>0 Broker-dealer<br>0 Check here if respondent is also an OTC derivatives dealer | D Security-based swap dealer                                 |                     | D Major security-based swap participant                                     |  |  |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)                                                                 |                                                              |                     |                                                                             |  |  |
| 3030 S LA CIENEGA BLVD                                                                                                              |                                                              |                     |                                                                             |  |  |
|                                                                                                                                     | (No. and Street)                                             |                     |                                                                             |  |  |
| CULVER CITY                                                                                                                         | CA                                                           |                     | 90232                                                                       |  |  |
| (City)                                                                                                                              | (State)                                                      |                     | (Zip Code)                                                                  |  |  |
| PERSON TO CONTACT WITH REGARD TO THIS FILING                                                                                        |                                                              |                     |                                                                             |  |  |
| JASON GERINGER                                                                                                                      | (917) 968 -<br>8801                                          |                     | JASON.GERINGER@ALTRUIST.COM                                                 |  |  |
| (Name)                                                                                                                              | (Area Code -Telephone Number)                                |                     | (Email Address)                                                             |  |  |
|                                                                                                                                     | B. ACCOUNTANT IDENTIFICATION                                 |                     |                                                                             |  |  |
|                                                                                                                                     |                                                              |                     |                                                                             |  |  |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*                                                           |                                                              |                     |                                                                             |  |  |
| BOO USA, P.C.                                                                                                                       |                                                              |                     |                                                                             |  |  |
|                                                                                                                                     | (Name - if individual, state last, first, and middle name)   |                     |                                                                             |  |  |
| 515 S FLOWER ST, 47TH FLOOR LOS ANGELES                                                                                             |                                                              |                     | CA<br>90071                                                                 |  |  |
| {Address)                                                                                                                           | {City)                                                       |                     | (State)<br>(Zip Code)                                                       |  |  |
| 10/08/2003                                                                                                                          |                                                              | 243                 |                                                                             |  |  |
| lte of R,g;mafoo with PCAO B l{ff appllca ble)                                                                                      | FOR OFFICAL USE ONLY                                         |                     | (PCAOB Reg;,t,at;uo Nam bee, ff applicable)                                 |  |  |
|                                                                                                                                     |                                                              |                     |                                                                             |  |  |
| * 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 0MB control number.** 

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#### **OATH OR AFFIRMATION**

I, Mazi Bahadori swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Altruist Financial LLC as of **6/30** 2~, is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account assified solely as that of a customer.

5 ~ e. */tfue,* **kJ Yv r~:f-**

Signature: Title:

Notary Public

#### **This filing\*\* contains (check all applicable boxes):**

- **iii** (a) Statement offinancial condition.
- **iii** (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.
- D (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
- D (f) Statement of changes in liabilities subordinated to claims of creditors.
- D (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.
- D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3.
- D (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.
- D (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, 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.
- **iii** (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable.
- D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- D (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- **iii** (t) Independent public accountant's report based on an examination of the statement of financial condition.
- D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
- D (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.
- D (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.
- D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable.
- □ (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). D (z) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_
- 

<sup>\*\*</sup>To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e){3) or 17 CFR 240.18a-7{d){2), as applicable.

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Statement of Financial Condition

As of June 30, 2023

(With Report of Independent Registered Public Accounting Firm Thereon)

Filed pursuant to Rule 17a-5(e)(3) Under the Securities Exchange Act of 1934 As a Public Document

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Statement of Financial Condition

June 30, 2023

#### Table of Contents

|                                                         | Page |
|---------------------------------------------------------|------|
| Report of Independent Registered Public Accounting Firm | 2    |
| Statement of Financial Condition                        | ಗ    |
| Notes to Statement of Financial Condition               |      |

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515 South Flower Street 47th Floor Los Angeles, CA 90071

#### Report of Independent Registered Public Accounting Firm

To the Member of Altruist Financial LLC Los Angeles, California

#### Opinion on Financial Statement

We have audited the accompanying statement of financial condition of Altruist Financial LLC (the "Broker-Dealer") as of June 30, 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 the Broker-Dealer at June 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

#### Basis for Opinion

This financial statement is the responsibility of the Broker-Dealer's management. Our responsibility is to express an opinion on the Broker-Dealer'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.

# BDO USA, P.C.

We have served as the Broker-Dealer's auditor since 2022.

Los Angeles, California

October 03, 2023

BDO is the brand name for the BDO network and for each of the BDO Member Firms.

BDO USA, P.C., a Virginia professional corporational Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

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| &A52?.@@2A@                                                 |          |
| /4","33&43                                                  | <br>     |
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| #6./696A62@                                                 |          |
| '.F./92@A<0B@A<:2?@                                         |          |
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| B2A<.33696.A2@                                              |          |
| 00?B212E=2;@2@.;1<A52?96./696A62@                           |          |
| *<A.996./696A62@                                            |          |
| \$2:/2?L@2>B6AF                                             |          |
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{9}------------------------------------------------

#### Notes to Statement of Financial Condition

June 30, 2023

#### Deposits with clearing organizations

The Company is required to maintain collateral deposits with clearing organizations including the Depository Trust & Clearing Corporation which allows the Company to use security transactions services provided by its clearing organizations for trade comparison, clearance, and settlement. The clearing organizations establish financial requirements, including deposit requirements, to reduce their risk. The deposits may fluctuate significantly from time to time based upon the nature and size of trading activities and market volatility. As the Company has not experienced historic defaults, there is no expectation of credit losses under these arrangements.

#### Securities Borrowed and Loaned

Securities borrowed is mainly comprised of securities borrowed from customers in connection to the fully paid lending program ("FPL"), which allows customers to earn income on certain securities when they permit the Company to lend these securities.

The Company receives cash collateral for securities loaned, which is generally in excess of the fair value of the securities. Securities loaned transactions are recorded based on the amount of cash collateral received. Increases in securities prices may cause the market value of the securities loaned to exceed the amount of cash received as collateral. In the event the counterparty to these transactions does not return the loaned securities, the Company may be exposed to the risk of acquiring the securities at prevailing market prices to satisfy its client obligations. The Company seeks to mitigate this risk by requiring credit approvals, establishing limits and thresholds for credit exposure, and continually assessing the creditworthiness of the counterparties. Additionally, the Company monitors the value of securities loaned daily and requires additional cash collateral as needed to ensure full collateralization. The Company applies the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for securities borrowed related receivables.

The Company deposits cash as collateral securing the loans in the customers' accounts in a bank account that is managed by a third-party collateral agent for the benefit of the customer. The cash collateral on deposit in relation to the FPL program as of June 30, 2023, totaled \$37 million and was classified as securities borrowed in the statement of financial condition.

#### Fractional Share Program

The Company operates a fractional share program for the benefit of its customers and maintains an inventory of equities held exclusively to support the program.

The Company has determined that fractional shares purchased by customers do not meet the criteria for derecognition under the accounting guidance prescribed within ASC 860 - Transfers and Servicing. Therefore, the Company accounts for fractional shares purchased by customers as secured borrowings with the underlying financial assets pledged to the customers as collateral. The Company recognizes an offsetting liability to reflect the obligation to repurchase the fractional shares from the customers when they decide to sell their positions.

The fractional shares owned by the customers and the Company's obligation to repurchase the shares are presented as equity securities - user-held fractional shares, at fair value and equity securities - repurchase obligations, at fair value, respectively, within the statement of financial condition.

{10}------------------------------------------------

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| (2026C./92@3?<:092.?6;4<?4.;6G.A6<;@                                        |  |
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| (2026C./92@3?<:/?<82?<br>12.92?@                                            |  |
| )20B?6A62@3.6921A<1296C2?                                                   |  |
| (2026C./92@3?<:<?12?39<D                                                    |  |
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| )20B?6A62@3.6921A<?2026C2                                                   |  |
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| '.F./92@A<092.?6;4<?4.;6G.A6<;@                                             |  |
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| 33&43                                                       |       |       |       |  |                   |
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| )20B?6A62@<D;21	.A3.6?C.9B2                                 |       |       |       |  |                   |
| *<A.9.@@2A@	:2.@B?21.A3.6?C.9B2                             |       |       |       |  |                   |
| *"#*,*4*&3                                                  |       |       |       |  |                   |
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| 00?B212E=2;@2@.;1<A52?96./696A62@                           |       |       |       |  |                   |
| *<A.996./696A62@	:2.@B?21.A3.6?C.9B2                        |       |       |       |  |                   |

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{14}------------------------------------------------

Notes to Statement of Financial Condition

June 30, 2023

On June 30, 2023, the Company had net capital of \$16.5 million (179% of aggregate debit items), which was \$16.3 million in excess of its required net capital of \$250 thousand.

#### (7) Commitments and Contingencies

#### Litigation and Claims

The Company accrues a liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In many lawsuits and regulatory proceedings, it is not possible to determine whether a liability has been incurred or to estimate the ultimate or minimum amount of that liability until the matter is close to resolution. In view of the inherent difficulty of predicting the outcome of such matters, the Company cannot determine the probability or estimate what the eventual loss or range of loss related to such matters will be. Subject to the foregoing, the Company continues to assess these matters and believes, in conjunction with consultation with outside counsel, that based on information available to it, that the resolution of these matters will not have a material adverse effect on its financial condition as of June 30, 2023.

The Company is engaged in regulatory matters, including investigations and enforcements, as well as regulatory exams that could result in investigations and enforcement, and routine civil litigation, such as customer arbitrations and reparation proceedings and, from time to time, actions brought by former employees relating to termination of employment. Pending regulatory investigations and enforcements could ultimately result in a censure and/or fine, and such other civil litigation could result in judgements or settlements for damages and other relief.

While no assurances can be given, the Company does not believe that the ultimate outcome of any such pending regulatory or civil matters will result in a material, adverse effect on the Company's business or financial condition. Hence, no loss amount has been recorded or disclosed in accordance with ASC 450-10 - Contingencies.

#### General Contingencies and Guarantees

In the ordinary course of business, there are various contingencies that are not reflected in the statement of financial condition. These include customer activities involving the execution, settlement and financing of various customer securities transactions. These activities may expose the Company to off-balance sheet credit risk in the event the customers are unable to fulfill their contractual obligations. In these situations, the Company may be required to purchase or sell financial instruments at unfavorable market prices to satisfy its obligations to customers or counterparties.

The Company provides guarantees to its clearing organization and exchanges under their standard membership agreements, which require members to guarantee the performance of other members. Under the agreements, if another member becomes unable to satisfy its obligations to a clearing organization or exchange, other members would be required to meet the shortfalls. The Company's liability under these arrangements is not quantifiable and may exceed the cash and securities it has posted as collateral. However, management believes that the possibility of the Company being required to make payments under these arrangements is remote. Accordingly, no liability has been recorded for these potential events.

{15}------------------------------------------------

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