FOCUS Report Wells Nelson & Associates, L.l.c.

X-17A-5 [Paper] - FOCUS Report

Published: 2009-03-17 11:04:23
Submitted: 2009-02-25
Period Ending In: 2008-12-31
scanned.pdf Scanned paper document


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                             09055647
                                                                               UNITED                STATES
                                                                                                                                                              0MB Number                     3235-0     123

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                           FEB    25      2009
                                                             ANNUAL AUDITED REPORT
                                                                                                                                                                          SEC FILE NUMBER
                                                                  FORM X-17A-5
                       Washington          DC                        PART                              III
                                                                                                                                                                                  8-52490
                                 110
                                                                                  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                                                        01/01/08                                          AND      ENDING                      12/31/08
                                                                                        MM/DDJYY                                                                             MM/DD/YY



                                                              REGISTRANT                          IDENTIFICATION

NAME OF BROKER-DEALER                                                                                                                                                 OFFICIAL       USE ONLY


Wells    Nelson         Associates          LLC
                                                                                                                                                                          FIRM ID         NO
ADDRESS         OF PRINCIPAL PLACE OF BUSINESS                                       Do     not      use     P.O Box            No
The Hightower          Building           105        Hudson           Suite 600

                                                                                      No     and     Street




Oklahoma        City                                                                         OK                                                                              73102

                      City                                                                        State                                                                      Zip     Code


NAME AND TELEPHONE NUMBER                              OF PERSON TO CONTACT                                           IN    REGARD1D              THIS     REPORT

                                                                                                                                                                   Area    Code      Telephone        No

                                                              ACCOUNTANT                             IDENTIFICATION


INDEPENDENT PUBLIC ACCOUNTANT                                  whose            opinion      is      contained in             this    Report


CF       Co L.L.P
                                                             Name         if   individual    state    last    first    middle     name


14175    Proton    Rd                                                                        Dallas                                                TX                                        75244

      Address                                                                                City                                                  State                                     Zip      Code


CHECKONE
                  Certified      Public   Accountant

                  Public     Accountant

                  Accountant        not resident      in    United        States     or     any of             possessions
                                                                                                        its




                                                                                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          statement                and    circumstances                relied     on as the basis for the exemption                      See      section     240.1    7a-5qe2j
                                           offacts




                                                Potential    persons           who   are    to   respond          to    the     collection   of information

SEC    1410   06-02                             contained     in   this    form      are    not required               to   respond      unless   the   form displays

                                                  currently    valid       0MB        control         number


                                                                             OATH OR AFFIRMATION


       Edward           Wells                                                                                                                                     swear        or     affirm             that        to   the    best         of

                                                                                        financial                                  and                              schedules pertaining                        to    the    fimi        of
                        and    belief        the                                                         statement                           supporting
my knowledge                                         accompanying
Wells Nelson                  Associates                 LLC                                                                                                                                                                        as   of

 December                                                   2008           are    true      and     correct                 further          swear           or     affirm        that     neither         the       company             nor

                                                              officer            or director           has                                             interest       in            account              classified          solely           as
any    partner     proprietor           principal                                                                any        proprietary                                     any

that   of   customer except                  as     follows




                                                                                                                                                                               Signature




                                                                                                                                                                            President
                                                                                                                                                                                   Title




            This   report            contains           check              all   applicable            boxes
                         Facing      page
                         Statement          of    Financial         Condition

                         Statement          of Income          Loss
                         Statement          of Cash         Flows

                                            of Changes                Stockholders                          or                     or    Sole                         Capital
                         Statement                              in                             Equity            partners                        Proprietors

                         Statement          of Changes          in    Liabilities         Subordinated           to   Claims of Creditors
                   fi

                         Computation              of Net Capital

                                                  for   Determination              of Reserve         Requirements                 Pursuant       to   Rule         5c3-3
                         Computation

                         Information                           to    the    Possession         or control        Requirements                Under       Rule       l5c3-3
                                                 Relating

                                                                                                                              of     the                             of     Net    Capital        Under         Rule       l5c3-l        and       the
                              Reconciliation                including            appropriate        explanation                              Computation

                                                  for   Determination              of    the   Reserve      Requirements                 Under        Exhibit         of Rule        5c3-3
                         Computation
                              Reconciliation             between           the    audited       and    unaudited            Statements            of    Financial         Condition        with     respect          to   methods        of    con

                         solidation

                         An Oath        or   Affirmation

                              copy     of   the    SIPC Supplemental                     Report
                                                                                                                                                                     existed      since    the    date    of the                     audit
                                        describing                   material       inadequacies            found      to    exist      or   found      to   have                                                     previous
                              report                          any
                                                  auditors                   on    internal       control
                         Independent                            report




            For conditions             of   contidential            treatment       of    certain     portions        of    this   tiling       see    sectIon      240      7a5e3


WELLS NELSON      ASSOCIATES   LLC


REPORT PURSUANT    TO RULE 7a-5d

 YEAR ENDED DECEMBER     312008


                             WELLS NELSON                      ASSOCIATES       LLC



                                                   CONTENTS

                                                                                      PAGE

INDEPENDENT AUDITORTS REPORT

STATEMENT         OF FINANCIAL       CONDITION


STATEMENT         OF INCOME


STATEMENT         OF CHANGES        iN   MEMBERS EQUITY

STATEMENT OF CHANGES IN LIABILITIES
  SUBORDINATED TO CLAIMS OF GENERAL                              CREDITORS


STATEMENT         OF CASH FLOWS


NOTES TO FINANCIAL STATEMENTS                                                          7-12


SUPPORTING        SCHEDULES

  Schedule             Computation        of Net Capital Under

                       Rule 15c3-1       of the   Securities

                       and Exchange        Commission                                 14   15



  Schedule   II        Computation        for   Determination      of Reserve

                       Requirements Under           Rule       5c3-3   of the

                       Securities    and Exchange        Commission                        16




INDEPENDENT         AUDITORS REPORT ON INTERNAL
  CONTROL         REQUIRED BY SEC RULE 17a-5                                          18- 19


                                                                                      CF Co L.L.T
                                                                                           CERTIFIED         PUBLIC ACCOUNTANTS
                                                                                                             CONSULTANTS




                                                           INDEPENDENT                            AUDITORS REPORT



Board of Directors and                            Members
Wells     Nelson                 Associates                LLC


We     have audited               the        accompanying                 statement             of financial              condition of Wells                       Nelson              Associates

LLC      as    of December                    31 2008 and                 the related             statements              of income               changes             in    members            equity

                in    liabilities            subordinated             to      claims          of general             creditors           and          cash    flows         for    the year then
changes

ended     that        you     are      filing       pursuant         to     rule        7a-5 under the Securities                               Exchange              Act of 1934                These

financial        statements                 are    the responsibility                  of the         Companys                  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                    Those standards require                            that      we      plan and perform                    the audit            to    obtain      reasonable

assurance             about       whether              the      financial          statements                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         statement              presentation

We     believe         that      our audit          provides                reasonable            basis for our opinion



In    our opinion the financial                            statements             referred           to     above present                fairly         in   all     material respects                the

financial        position           of Wells Nelson                           Associates               LLC         as     of December                  31 2008              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



Our    audit      was made               for       the purpose            of forming an opinion                           on the basic                financial        statements             taken     as

     whole       The      information                  contained            in   the Schedules                     and     II   is     presented          for
                                                                                                                                                                   purposes           of   additional


analysis         and        is    not              required          part
                                                                                  of the          basic            financial            statements              but         is    supplementary

information                                        rule      17a-5        under        the Securities                                        Act of 1934                    Such       information
                       required              by                                                                         Exchange
has    been subjected                   to    the auditing procedures                           applied            in    the audit           of the basic             financial         statements

and      in     our                                               stated         in    all      material                                in    relation          to     the       basic       financial
                         opinion              is      fairly                                                        respects

statements            taken       as         whole




                                                                                                                CFCo.L.L.P
Dallas        Texas

February         23      2009



              14175    Proton    Road        Dallas     Texas    75244-3604           Phone     972-387-4300             800-834-8586           Fax    972-960-2810          www.cfllp.com


                                                                                   REGISTERED        WITH    THE   PCAOB
                                                          MEMBERS    AICIA    CENTER           FOR   AUDIT      QUALITY        TSCPA    EBPAQC
                                                      CPAMERICA INTERNATIONAL     AN           AFFILIATE     OF HORWATFI        INTERNATIONAL          AND
                                                                      THE     INTERNATIONAL          ACCOUNTINO         GROUP TIAG


                                        WELLS NELSON              ASSOCIATES LLC
                                             Statement of Financial          Condition

                                                        December 31 2008


                                                            ASSETS


Cash and cash             equivalents                                                                            53075

Deposits      with clearing broker-dealer                                                                      1445267

Receivable          from clearing       broker-dealer                                                           654055

Securities     owned         at   market value                                                                 1928948

Furniture      equipment           and leasehold     improvements      net                                       85889

Other assets                                                                                                     32132


                                                                                                               4199366



                                        LIABILITIES       AND MEMBERS EQUITY

Liabilities


  Accounts          payable                                                                                       15209

  Accrued                                                                                                       677871
               expenses
  Payable      to    clearing      broker-dealer                                                               1919043

  Capital     lease obligation                                                                                    9371


    Total     liabilities                                                                                      2621494


Members        equity                                                                                          1577872


                                                                                                               4199366




                    The    accompanying      notes   are an integral   part
                                                                               of these financial statements



                                                              Page


                             WELLS NELSON                  ASSOCIATES LLC
                                             Statement     of Income

                               For the Year Ended December               31   2008



Revenues
 Commissions                                                                                            1110673

 Trading    and investment   gains                                                                      2022337

 Underwriting and advisory       fees                                                                    473402

 Interest                                                                                                201511

 Other                                                                                                    68747


                                                                                                        3876670



Expenses

 Employee     compensation    and benefits                                                              2584686

 Brokerage and clearance      fees                                                                       110120

 Communications                                                                                          108962

 Occupancy     and equipment     costs                                                                   180967

 Promotional costs                                                                                       101331

 Interest                                                                                                 31798

 Data processing    costs                                                                                 39753

 Regulatory    fees and expenses                                                                          62874

 Other                                                                                                   167559


                                                                                                        33 88050


   Net income                                                                                            488620




              The accompanying       notes   are an   integral   part of these financial   statements




                                                       Page


                              WELLS NELSON               ASSOCIATES LLC
                              Statement of Changes          in   Members     Equity

                               For the Year Ended December              31   2008




                                                                              Number     of           Members
                                                                                 Units                 Equity




Balance   December 31 2007                                                            1367             1389252



Distributions                                                                                           300000


Net income                                                                                               488620



Balance   December 31 2008                                                            1367             1577872




                The accompanying   notes   are an   integral     part of these financial statements




                                                     Page


                            WELLS NELSON                ASSOCIATES LLC
     Statement     of Changes   in Liabilities   Subordinated        to   the Claims of General Creditors

                                For the Year Ended December                31   2008




Balance   December 31 2007


 Additions




 Retirements



                                                                                                            --
Balance   December 31 2008




               The accompanying     notes   are an integral   part
                                                                      of these financial statements



                                                     Page


                                              WELLS NELSON                       ASSOCIATES LLC
                                                                Statement      of Cash Flows

                                                   For the Year Ended December                   31   2008



Cash   flows     from operating                     activities

 Net income                                                                                                                       488620

 Adjustments           to    reconcile        net     income       to   net

   cash   provided            used       by operating             activities


       Depreciation              and amortization                                                                                  29343
       Changes     in       operating         assets and liabilities

        Decrease            in    deposits         with clearing broker-dealer                                                    312190
        Increase        in       receivable         from clearing broker-dealer                                                   559199
        Increase        in       securities        owned                                                                          417601
        Increase        in       other assets                                                                                      25245
        Decrease            in    accounts         payable                                                                         54169
        Increase        in       payable      to    clearing      broker-dealer                                                   404758
        Increase        in       accrued expenses                                                                                  60683


       Net cash provided                used          by operating        activities                                              239380


Cash   flows     from            investing         activities


 Purchase       of furniture and equipment                                                                                        15870

       Net cash        provided         used          by investing        activities                                              15870

Cash    flows    from financing                    activities


 Repayment of               capital    lease obligation                                                                            4029
 Distributions                                                                                                                    300000

       Net cash        provided         used          by financing        activities                                              304029

Net decrease      in    cash        and cash equivalents                                                                          80519

Beginning       cash    and cash equivalents                                                                                      133594


Ending cash       and cash equivalents                                                                                             53075


Supplemental           Disclosures

  Cash paid for

   Interest                                                                                                                        31798


   Income       taxes                                                                                                                  --




                The accompanying                      notes      are an   integral     part   of these   financial   statements




                                                                              Page


                              WELLS             NELSON                     ASSOCIATES LLC
                                          Notes        to    Financial            Statements

                                                      December 31 2008


Note   Summary of              Significant            Accounting                 Policies



       Basis     of Financial              Statement                 Presentation



       The     financial          statements           present            the financial          position          and     results     of operations             of

       Wells     Nelson                  Associates               LLC      the     Company                    an     Oklahoma           limited liability

       company        was  which                     formed          on February                      2000         Three individuals                  who       are

       members of management                               and/or         employees of the                  Company own                 the majority             of

       the     membership                interests           The          Company           shall      terminate           on February              28 2050
       unless     earlier         terminated                Profit        and     loss     are     allocated to          members             in   accordance

       with     their    percentage              ownership                of outstanding              units        The number             of membership

       units    authorized           must be approved                       by     the    majority          of the board         of members                 Each

       members           liability        is   limited to           its   capital       account       balance



       Business         Operations


       The Company                  is         broker-dealer                in    securities          registered         with     the     Securities            and

       Exchange            Commission                 SEC           under Rule                 5c3-3k2ii                   which       provides          that    all


       the funds        and       securities         belonging             to    the   Companys             customers         would be handled                  by

          clearing           broker-dealer                    In     accordance                with     the    provisions            of      this    rule       the

       Company             executes            all    of    its    customers              transactions             on       fully-disclosed               basis

       through        an      unaffihiated            clearing             broker-dealer               located        in    Dallas           Texas        which

       carries        the      accounts              and      securities               of the         Companys               customers              Principal

       business       activities          are conducting                   principal and agency                     transactions          and providing

       underwriting            and advisory                 services            for customers           primarily          located        in   Oklahoma


       Underwriting                and Advisory Fees


       Underwriting               and advisory                fees        include        gains losses               and fees           net     of syndicate

       expenses              arising from             securities                offerings        in    which         the    Company               acts    as    an
       underwriter            or    agent            Underwriting                  and advisory               fees    also include                fees   earned

       from providing                financial         advisory                 services         Underwriting               and advisory              fees      are

       recorded         at    the time          the    underwriting                is    completed            and the income                 is   reasonably

       determinable



       Securities            Transactions


       Profit    and       loss    arising from               all     securities         transactions              entered      into    for       the account

       and     risk   of the Company                       are     determined             using       the    specific       identification               method

       and     are    recorded            on          trade        date         basis      Customers                securities         transactions             are


       reported       on          settlement           date        basis with            related       commission            income            and expense

       reported         on          settlement              date          basis          The     amounts             recorded          for     commission




                                                                   Page


                              WELLS NELSON                                  ASSOCIATES LLC
                                             Notes         to   Financial         Statements

                                                      December                        2008


Note   Summary of             Significant              AccountjaPohcies                                  continued



       Securities        Transactions                       continued



       income          and         expense            for        customers                  securities              transactions              approximate                the

       amounts         that    would be recorded                           on     trade date                  basis



       Cash and Cash Equivalents


       For purposes                of the         statement                of cash            flows            the      Company               has     defined          cash

       equivalents            as    highly           liquid           investments                      with     original          maturities             of    less    than

       ninety     days        not       held    for    sale       in    the ordinary                   course       of business



       Furniture             Equipment                and Leasehold                         Improvements


       Furniture             equipment                and         leasehold                 improvements                      are      stated         at       cost     less

       accumulated             depreciation                      Depreciation                     is    provided             principally            by     accelerated

       and     straight-line             methods                using       estimated                  useful        lives        of   five     to    seven           years
       Leasehold improvements                              are amortized over the                              lesser        of the economic               useful       life

       of the improvement                      or the term of the lease



       Income         Taxes


       The Company                 is   treated       and taxed             as        partnership               for     federal        income         tax purposes

       Accordingly            any tax liability                  is   the responsibility                      of the individual               members


       On December                  30 2008                 the       Financial             Accounting                  Standards             Board        FASB
       issued FASB                 Staff       Position               FSP              No              FIN 48-3              Effective          Date           of     FASB
       Interpretation              No        48 for Certain Nonpublic                                  Entities         which permits                the       Company
       to     defer    the     implementation                         of   FASB              Interpretation                  No 48            Accounting                for
       Uncertainty            in    Income           Taxes             FIN 48                     until       its    fiscal       year   beginning              January
            2009       FIN 48           clarifies          that       management                   is    expected            to    evaluate          an income          tax

       position        taken            or    expected            to       be    taken                 for    likelihood            of realization                  before

       recording        any amounts                  for        such position                in    the financial               statements                FIN 48        also

       requires        expanded              disclosure           with respect                    to     income         tax positions                taken      that    are

       not    certain    to    be realized                  The Company                      has         elected        to    defer the         implementation
       of FIN 48 while the                      FASB             develops             guidance                on the         application             of FIN 48 by

       pass-through            entities           and           amends          the         disclosure              requirements               for       FIN 48         for


       nonpublic        enterprises



       Management              accounts              for    uncertain            tax        positions           based         on    their     best estimate               If


            position    is    deemed            to    be aggressive                    it   is    evaluated             using       guidance             for   gain    and

       loss    contingencies                 found     in       SFAS        No              Accounting               for Contingencies




                                                                  Page


                            WELLS             NELSON                   ASSOCIATES LLC
                                         Notes      to   Financial             Statements

                                                   December 31 2008


Note   Summary of             Significant          Accounting              Policies        continued



       Use of Estimates



       The     preparation            of financial statements                     in     conformity              with    accounting             principles

                                         in   the United           States        of America              requires the          Company             to   make
       generally        accepted

       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


       statement           Actual        results       could      differ        from those estimates



Note                   with      Clearing Broker-Dealer
       Deposits



       Deposits        with       clearing        broker-dealer                include     cash     required            to   be maintained              at   the

       clearing       broker-dealer               for clearing           and trading         activities




Note   Securities         Owned


       Marketable             securities           owned          at     December              31        2008       are       considered               trading

       securities         and consist             of   state      and municipal                 obligations             at   fair    value       based       on

       quoted market prices                       In accordance                with    SFAS       No       157     the       Company         categorizes

       its    financial     instruments            recorded         at    fair   value     into          three-level          fair   value      hierarchy

       The     fair   value                                     the highest                        to                               in active       markets
                                  hierarchy        gives                              priority           quoted         prices

                                            or liabilities                             and the lowest                                to    unobservable
       for     identical        assets                             Level                                            priority

                                                                                                the financial            instruments                    within
                                            the    inputs used                  measure
                                       If                                 to                                                                    fall
       inputs       Level
       different       levels      of the hierarchy               the categorization                is   based on the lowest                    level    input

       that    is   significant       to the fair value            measurement              of the instrument



       Financial          assets      and     liabilities        recorded             on the      Statement             of Financial            Condition

       are categorized               based on the inputs                  to    the valuation            techniques           as follows



       Level              Valuations           based on quoted prices                      in    active         markets        for     identical        assets

                                                                                                                  Valuation                                  and
       or liabilities         that    the     Company has                the ability       to     access                               adjustment

       block        discounts                                             Level           instruments                Because              valuations         are
                                      are not       applied         to

       based on quoted prices                     that    are readily and regularly available                                in   an      active       market

       valuation          of these products              does not          entail         significant            degree       of judgment



       Level              Financial           assets and liabilities                  whose        value         are based          on quoted prices
       in     markets      that      are not      active       or model          inputs     that    are     observable              either      directly      or

       indirectly         for     substantially           the     full    term        of the      asset         or liability           Level            inputs

       include        the following




                                                                Page


                               WELLS NELSON                            ASSOCIATES LLC
                                           Notes      to   Financial         Statements

                                                  December                   2008



Note   Securities         Owned            continued



                                                                                                   in     active    markets
                                   prices for similar assets                   or liabilities
                     Quoted
                     Quoted            prices     for      identical      or    similar assets            or    liabilities         in    nonactive

                     markets
                                   models who               inputs     are     observable      for      substantially          the       full    term    of
                     Pricing

                     the asset         or liability         and

                                   models whose                inputs        are derived      principally           from or corroborated
                     Pricing

                               observable             market       data        through      correlation            or     other           means         for
                     by
                     substantially           the full term of the asset                  or liability



       Level                   Financial        assets       and   liabilities         whose    values           are based           on prices           or

       valuation                               that                             that    are both      unobservable                 and significant
                          techniques                    require    inputs

       to   the overall           fair   value    measurement                  These inputs      reflect        managements judgment
       about    the assumptions                   market                             would use       in   pricing       the asset         or liability
                                                                participant




       The                         table                     the   fair   value        hierarchy     for       those    assets      and         liabilities
               following                    presents

       measured           at    fair   value    on         recurring basis as           of December            31 2008



                                                                                          Financial        Securities         Owned

                                                                             Level                        Level                                 Level



                                                                                                                         --
        State obligations                                                       900225
        Municipal              obligations                                   1028723



                                                                                                                                                              --
                                                                             1928948                                     --




                                                                                                           measured                             value    at
       The Company did                      not       hold
                                                               any     financial         liabilities                          at     fair


       December 31 2008


Note   Furniture           Equipment            and Leasehold Improvements


                                                                          and leasehold                                             December 31
            summary of             furniture                                                    improvements                  at
                                                        equipment
       2008     is   as follows



             Furniture            and    fixtures                                                                                          70670

             Equipment                                                                                                                     58982
               Leasehold improvements                                                                                                      249Q
                                                                                                                                           54582

               Less        accumulated             depreciation           and amortization                                           268693

                                                                                                                                           85.889



                                                               Page     10


                            WELLS           NELSON                   ASSOCIATES LLC
                                         Notes     to    Financial          Statements

                                                  December 31 2008


Note   Leases


       The       Companys                facilities       and        certain        equipment          are        leased           under        various

       operating       leases       with       initial    noncancelable               terms     in    excess          of one year                   Rental

       expense       related       to     facilities      and equipment                amounted            to    $127478               during           2008
       One     facility     lease contains               renewal            option


       The Company             leases          certain        equipment            under      capital           lease           Assets       under           this


       capital     lease     are        included         in    the       caption      Furniture            equipment                  and    leasehold

       improvements                in    the    statement           of   financial     condition           and include                equipment               of

       $21893        less   accumulated               amortization             of$13866


       The     following      are the          minimum              lease    payments        that    will       have       to    be made           in   each

       of the      years     indicated            based        on        capital     and    operating             leases         in    effect           as    of

       December 31 2008


             Year Ended
             December 31                                                                      Operating                                Capital

                  2009                                                                               65406                                   5265
                  2010                                                                               45796                                   4386
                  2011                                                                               20986


             Total    minimum             lease payments                                            132188                                   9651
                  Amount           representing           interest                                                                            280

             Present      value     of minimum lease payments                                                                                9.371



Note   Net Capital Requirements and Exemptive                                   Provisions



       The Company            is    subject        to    the   SEC          Uniform     Net     Capital          Rule           SEC         Rule    15c3-

             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        At December              31 2008             the    Company had              net    capital          of   $1376788                which

       was     $1276788            in    excess     of   its   required         net capital         of $100000                   The Companys
       ratio   of aggregate             indebtedness           to    net capital      ratio    was     .51       to




       The Company            is   exempt         from the Securities and Exchange                               Commission Customer
       Protection       Rules           SEC       Rule         5c3-3           which       relate     to    reserves             and        custody           of

       securities      under section              k2ii               of this rule




                                                          Page        11


                              WELLS NELSON                                 ASSOCIiISjIC
                                              Notes to Financial               Statements

                                                    December 31 2008




Note   Concentration                of Credit       Risk


                                              exceeded                             insured        limits          various           times       throughout
       Cash     at        one hank                              federally                                   at



       the year           ended December                31 2008


Note   Defined            Contribution           Plan



       The      Company                  adopted                401k              profit     sharing        plan           covering            all        eligible

                                effective                                      2003               Participants             may          make           deferral
       employees                                    January
       contributions                     to    the annual            maximum          amount         allowed         by the Internal                  Revenue
                                up
       Code          The Company may                       also        make        discretionary           contributions                and safe harbor

       matching             contributions                Safe         harbor        matching         contributions                 were       $61611           for


       2008 There were no                        discretionary             contributions           during         2008


Note   Commitments and                        Contingent             Liabilities




       The Company                                         in        various        trading       and brokerage                   activities         in    which
                                     is       engaged
                                                           include           broker-dealers                banks            and         other         financial
       counterparties                primarily
                                                                                             do    not     fulfill         their        obligations            the
       institutions                 In    the     event         counterparties

                                         be exposed             to    risk         The     risk    of default          depends            on         the    credit
       Company              may
       worthiness             of the          counterparty            or   issuer      of the instrument                     It    is   the    Companys
       policy        to    review         as necessary               the   credit     standing       of each counterparty



       The Company                   is                    to        indemnify         its   clearing       broker/dealer                 if         customer
                                              required

       fails    to         settle             securities         transaction               according         to      its     clearing           agreement
                                                                                                                                  of any
       Management                   was        neither    aware nor had it been                             notified                             potentially

       material           indemnification             loss at December 31 2008




                                                                 Page        12


    Supplemental Information


  Pursuant   to   Rule 17a-5   of the



Securities   Exchange     Act of 1934



                  as of



         December 31 2008


                                                                 Schedule



                                             WELLS NELSON                ASSOCIATES LLC
                                                  Under   Rule    5c3        of the Securities and Exchange   Commission
 Computation              of Net      Capital                           -1



                                                        As of December 31 2008




Computation              of Net      Capital



Total    members                      qualified for net capital                                                  1577872
                           equity



Deductions         andlor       charges

 Non-allowable               assets

      Furniture         equipment           and leasehold      improvements                     85889

      Other assets                                                                                9507             95396


                                haircuts     on   securities                                                     1482476
Net    capital     before                                      positions




Haircuts     on        securities     computed         where    applicable


  pursuant        to    Rule        5c3-1

         Debt     securities                                                                    97288
         Undue         concentration                                                             8400             105688

                                                                                                                  1376788
Net     capital




Aggregate          Indebtedness



Items     included         in   statement      of financial condition
                                                                                                                    15209
  Accounts          payable
                                                                                                                   677871
  Accrued          expenses
                  lease obligation                                                                                   9371
  Capital



                            indebtedness                                                                           702451
Total aggregate




                                                                             14
                                                                    Page


                                                    Schedule           continued


                                        WELLS NELSON                   ASSOCIATES LLC
                                                      Rule 15c3-l           of the Securities    and Exchange       Commission
 Computation           of Net Capital Under
                                                    As of December 31 2008




Computation           of Basic     Net Capital Requirement



Minimum net           capital    required      2/3%       of total

                                                                                                                              46832
 aggregate       indebtedness




Minimum dollar           net capital      requirement       of
                                                                                                                             100000
                broker     or dealer
 reporting




Minimum         net capital      requirement greater          of two
                                                                                                                             100000
 minimum         requirement          amounts




                                 of   minimum required                                                                      1276788
Net   capital    in   excess




                                 1000%                                                                                      1306543
Excess net       capital    at




                                                                                                                      0.51     to
Ratio     Aggregate indebtedness              to    net capital




Reconciliation          with     Companys           Computation


                                                                                  of net             under   rule   5c3-1
                                      differences    in   the computation                  capital
There were no material

 from the Companys               computation




                                                                     Page    15


                                                  Schedule        II




                                WELLS NELSON             ASSOCIATES LLC
                                   for   Determination of Reserve             Requirements         Under
                  Computation
                        Rule 15c3-3      of the Securities and Exchange            Commission

                                           As of December 31 2008




Exemptive     Provisions




The Company      has   claimed an exemption       from Rule            5c   3-3 under   section     k2ii         in   which

                                                                                         on               disclosed   basis
all   customer transactions     are cleared   through another          broker-dealer              fully




Companys     clearing    firm    First   Southwest   Company




                                                     Page    16


 Independent     Auditors Report



      On    Internal   Control



 Required      By SEC   Rule 17a-5



Year Ended December         31   2008


                                                                                    CT Co                                         L.L.T
                                                                                           CERTIFIED          PUBLIC ACCOUNTANTS
                                                                                                              CONSULTANTS




                                     INDEPENDENT                            AUDITORS                          REPORT               ON INTERNAL
                                                 CONTROL                    REQUIRED                          BY SEC RULE                       17a-5



To     the Board of Directors and                            Members
Wells     Nelson                Associates              LLC


In     planning        and performing our                         audit      of the           financial             statements            and supplemental                          information            of
Wells Nelson                     Associates              LLC         the       Company                              as    of and         for    the    year ended December                                31
2008      in    accordance           with        auditing standards                        generally accepted                       in    the    United           States           of America we
considered            the      Companys                 internal           control            over       financial            reporting           as         basis for designing                          our

auditing        procedures             for    the purpose of expressing                                     our opinion             on the        financial                                        but    not
                                                                                                                                                                         statements
for    the purpose of expressing                                                     on the effectiveness                            of the
                                                             an    opinion                                                                        Companys                     internal            control

Accordingly                 we     do not          express             an      opinion               on the              effectiveness            of the Companys                                  internal

control



Also      as    required           by     rule      17a-5g1                    of the Securities                          Exchange              Commission                     SEC             we     have
made           study      of the practices and procedures                                        followed                 by the         Company             including               consideration

of control           activities        for    safeguarding                   securities                  This            study    included            tests       of such            practices            and

procedures            that      we   considered                   relevant          to     the        objectives              stated       in    rule        17a-5g                 in   making           the

periodic        computations                 of aggregate                  indebtedness                     and net          capital       under        rule            7a-3a1                     and    for


                        compliance               with        the      exemptive                                            of             15c3-3              Because                the
determining                                                                                     provisions                       rule                                                       Company
does      not      carry        securities           accounts               for      customers                      or    perform          custodial              functions                relating        to

customer securities                  we       did not         review the practices and procedures                                                followed               by the Company                     in


any of the following


                     Making               quarterly                 securities                  examinations                        counts              verifications                         and

                     comparisons and recordation                                   of differences                        required by rule                   7a- 13



                     Complying               with          the      requirements                      for prompt                                       for        securities             under
                                                                                                                                  payment
                     Section              of Federal               Reserve            Regulation                          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    SECs         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


           14175      Proton    Road    Dallas     Texas     75244-3604            Phone       972-387-4300               800-834-8586         Fax 972-960-2810               www.cfllp.com


                                                                                  REGISTERED         WITH     THE   PCAOB
                                                        MEMBERS       AICPA       CENTER       FOR    AUDIT QUALITY TSCPA      EBPAQC
                                                 CPAMERICA        INTERNATIONAL          AN   AFFILIATE       HORWATH
                                                                                                              OF       INTERNATIONAL                  AND
                                                                    THE    INTERNATIONAL             ACCOUNTING   GROUP TIAG


managements                   authorization                    and     recorded              properly           to        permit          the                               of     financial
                                                                                                                                                  preparation
statements             in    conformity                 with     generally            accepted           accounting                  principles              Rule           7a-5g             lists

additional            objectives          of the practices and procedures                                listed          in   the preceding                paragraph


Because          of inherent              limitations            in    internal           control       and the practices and procedures                                         referred       to

above       error       or fiaud             may    occur        and not be detected                          Also         projection            of any evaluation                     of them
     future
                                                                                                   may become
to                periods                subject         to    the    risk    that
                                   is                                                     they                                     inadequate          because            of changes            in

conditions            or that      the effectiveness                   of   their                     and operation                            deteriorate
                                                                                      design                                         may

     control      deficiency             exists          when        the design           or operation             of         control          does    not allow           management
or employees                 in    the       normal       course        of performing                   their       assigned             functions          to                    or detect
                                                                                                                                                                  prevent
misstatements                on         timely basis                                                                 is         control                              or combination
                                                                       significant              deficiency                                      deficiency
of control            deficiencies                that    adversely               affects       the                                       to
                                                                                                        entitys            ability              initiate         authorize             record
process          or     report          financial             data    reliably in               accordance                with       generally             accepted          accounting
principles            such    that       there      is    more         than          remote           likelihood              that         misstatement                 of the         entitys
financial        statements              that      is    more        than     inconsequential                  will        not      be prevented             or detected                by the
entitys      internal         control



     material         weakness               is     significant             deficiency              or combination                   of                                                      that
                                                                                                                                           significant            deficiencies
results     in    more        than            remote likelihood                    that         material        misstatement                    of the      financial            statements
will   not be prevented                   or detected            by the entitys                  internal       control



Our    consideration                    of    internal         control        was         for     the    limited              purpose described                    in     the     first      and
second      paragraphs                  and would              not                                                 all     deficiencies               in   internal         control          that
                                                                       necessarily               identify

might      be material                  weaknesses                   We      did     not      identify         any         deficiencies               in   internal         control          and
control      activities            for                                 securities            that       we     consider              to    be material
                                             safeguarding                                                                                                           weaknesses                 as

defined     above


We     understand             that       practices            and procedures                  that
                                                                                                        accomplish                 the    objectives             referred         to    in    the
second      paragraph               of    this
                                                    report       are considered                  by     the     SEC           to    be adequate              for    its                        in
                                                                                                                                                                            purposes
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                          indicate              material
                                                                                                                                               respects
inadequacy            for    such                              Based
                                        purposes                            on     this     understanding                 and on our study                   we     believe        that       the

Companys              practices              and procedures                  as    described            in    the    second           paragraph of                this     report         were
adequate         at   December 31 2008                          to    meet the            SECs        objectives



This                         intended                                                                   and use
       report          is                         solely for          the    information                                   of      the    Managers               management                   the

SEC     the Financial                Industry            Regulatory           Authority and other regulatory                                     agencies          that     rely on          rule

 7a-5g           under the Securities                     Exchange            Act of 1934                in   their                              of registered brokers                       and
                                                                                                                           regulation

dealers      and       is    not     intended            to    be and should                 not      be used by anyone                         other      than     these         specified
parties




                                                                                                        CF           Co         L.L.P
Dallas Texas

February         23     2009


WELLS NELSON
ASSOCIATES LLC

December 31 2008



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