FOCUS Report Sg Americas Securities, Llc

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

Published: 2012-03-19 08:57:13
Submitted: 2012-02-29
Period Ending In: 2011-12-31
scanned.pdf Scanned paper document


                                        1/                                       UNITED               STATES                                            0MB APPROVAL
                                               SECURITIES             AND EXCHANGE                                                                 0MB Number      3235-0123
                                                                                                          COMMISSION
                                                                                                                                                    Expires                    April   30    2013
                                                                             Washington                D.C 20549                                    Estimated       average        burden
                                                                                                                                                   hours     per    response                 12.00


                                                          ANNUAL AUDITED RE5T
                                                                FORM X-1 rocess                                                             ing
                                                                                                                                                                     SEC    FILE     NUMBER
                                                                                                                         ectjon                                      8-66125
                                                                                          PART              Iii


                                                                                                              EH           2q
                                                                            FACING          PAGE
                   Information           Requested          of Brokers            and Dealers1jjur uant to Section 17 of the
                                Securities        Exchange           Act of 1934       and Ru3QfliIQinder
                                                                                                                         123
 REPORT FOR THE PERIOD                                                       01/01/11                              AND                                             12/31/11
 BEGINNING                                                                                                        ENDING
                                                                            ___________                                                          ____________
                                                                             MM/DD/YY                                                                              MM/DDIYY


                                                      REGISTRANT                          IDENTIFICATION


NAME OF BROKER-                                   SG Americas                    Securities                 LLC                                           OFFICIAL           USE
DEALER                                                                                                                                                    ONLY

ADDRESS            OF PRINCIPAL PLACE OF BUSINESS                                 Do       not use        P.O Box          No                                   FIRM       l.D      NO
1221       Avenue        of the       Americas
                                                                             No     and    street

New York                                                                            New York                                                              10020
                               City                                                       State                                                       Zip       Code

NAME AND TELEPHONE                           NUMBER OF PERSON TO CONTACT                                          IN    REGARD TO                   THIS REPORT
Greg       Cugliari                                                                                                                                  201-839-8820
                                                                                                                                                   Area    Code        Telephone       Number


                                                     ACCOUNTANT                           IDENTIFICATION


INDEPENDENT              PUBLIC         ACCOUNTANT                 whose      opinion       is    contained            in this   Report


Deloitte           Touche        LLP
                                                     Name      if   individual    state    last   first    middle      name
Two World              Financial        Center                               New          York                                 NY                                      10281
                            Address                                                 City                                   State                                     Zip    Code


CHECK ONE
             Ii    Certified Public          Accountant

                   Public    Accountant

                   Accountant         not resident   in   United      States or any          of     its
                                                                                                          possessions



                                                            FOR OFFICIAL                   USE ONLY




     Claims for exemption      from     the   requirement    that     the   annual        report be        covered        by   the    opinion        of an      independent         public
accountant      must   be supported      by     statement    offacts        and circumstances               relied       on as       the   basis    for   the                        See
                                                                                                                                                                   exemption
Section    240.1   7a-5e2

Potential       persons who are to respond                to the collection               of information               contained            in     this   form are not required
to    respond     unless the form displays                currently         valid    0MB          control      number



                                                                                                                                                                                                     Ii


                                                                        AFFIRMATION



   Gregory      Cugliari             affirm    that    to   the   best   of    my       knowledge       and    belief     the    accompanying             financial

statements      and        supplemental            schedules      pertaining       to    the   firm     of    SG     Americas      Securities        LLC       the
Company             for     the
                                  year     ended      December      31 2011         are    true   and   correct         further   affirm     that   neither     the

Company nor         any      partner proprietor             principal    officer    or    director   has any       proprietary    interest    in
                                                                                                                                                    any    account
classified    solely       as that    of      customer




                                                                                                                                      %-T /rn
                                                                                                              Chief                                           Date
                                                                                                                       Finajl Officer




Notary   Public




             CHRISTOPHER             RUFFINO

               PUBLIC-STATE           OF NEW     YORK
   NOTARY
               No     01RU5050164

      Qualified       In    DutChIsl       County

                                  December      06    2O3
  My Commission       ExpIres




                                                                               -2-


                                                   SEC
                                           Mail
                                                  Processing
                                                  Section


                                           FEB29         2012


                                          Washington      DC
                                                   123


          SO   Americas    Securities   LLC
               SEC   I.D   No   8-66125




STATEMENT  OF FINANCIAL CONDITION
      AS OF DECEMBER31 2011
                           AND
  INDEPENDENT AUDITORS                    REPORT




  Filed   pursuant to Regulation        7a-5e3
  Under    the   Securities   Exchange Act    as

               PUBLIC      DOCUMENT


                   101                 tte                                                                                                                     Deloitte         Touche   LIP

                                                                                                                                                               Two World Financial Center

                                                                                                                                                               New York NY 10281-1414
                                                                                                                                                               USA

                                                                                                                                                               Tel        212 436 2000
                                                                                                                                                               Fax        212 436 5000

INDEPENDENT                            AUDITORS REPORT                                                                                                         www.deloitte.com




To    the    Board       of Directors            and     Member       of

SG    Americas           Securities             LLC
New York New                       York


We     have       audited the accompanying                        statement           of financial       condition of                SG     Americas        Securities           LLC     the
                                                                                                                                          Rule              under      the      Securities
Company                  as       of December            31 2011          that    you        are    filing   pursuant           to                 7a-5

                                                                                             the                             of the         Companys management                          Our
Exchange Act of 1934 This                                            statement
                                                       financial                        is          responsibility

                                                                           this financial           statement        based           on    our audit
responsibility               is   to   express an opinion            on


                                                                                                   standards                                           in the        United       States   of
We     conducted              our audit         in   accordance       with auditing                                 generally             accepted

                                                                     we                                                              obtain       reasonable assurance               about
America Those                     standards require          that           plan and          perform        the    audit    to

whether                                                            free    of    material           misstatement                An        audit    includes      consideration             of
                  the    financial           statement       is

                                                                                                                      audit                            that    are                         in
internal      control             over    financial      reporting        as      basis       for    designing                       procedures                        appropriate

the   circumstances                    but not for the purpose              of expressing             an opinion           on     the      effectiveness        of the     Companys
internal      control             over financial         reporting        Accordingly               we   express no             such       opinion        An   audit      also    includes


                        on         test   basis evidence             supporting          the       amounts and             disclosures             in the   financial           statement
examining
                                                                    used        and                          estimates           made            by management               as     well   as
assessing          the       accounting              principles                         significant

evaluating             the    overall        financial      statement          presentation           We      believe        that         our audit       provides           reasonable

basis       for   our opinion



                                  such    statement       of financial          condition presents                 fairly       in   all    material      respects        the     financial
In    our opinion

position          of    SG        Americas      Securities         LLC     at    December            31 2011          in    conformity with accounting                           principles


                   accepted            in the   United      States    of America
generally




February           28 2012




                                                                                                                                                               Member      of

                                                                                                                                                               Deloitte    Touche    Tohmatsu


SG AMERICAS SECURITIES                                         LLC

STATEMENT            OF    FINANCIAL             CONDON
AS OF DECEMBER                   31    2011

In thousands



Assets

  Cash                                                                                                              862142

  Cash    segregated       for regulatory         purposes                                                          207329

  Receivables       from brokers           dealers and clearing               organizations                        1740717

  Receivables       from customers                                                                                   62538

  Receivables       from non-customers                                                                                   58

  Collateralized        agreements

     Securities     purchased         under    agreements            to resell                                     3902555
    Securities      borrowed                                                                                      12337416

     Securities     received       as collateral                                                                   6591543

  Financial    instruments         owned           at   fair   value                                               5072787
  Financial    instruments         owned and pledged              as      collateral         at    fair   value    4131780

     Total    financial    instruments          owned           at    fair   value                                 9204567
  Other assets net                                                                                                  285290

  Total   assets                                                                                                  35194155



Liabilities   and members                equity



  Short-term borrowings                                                                                                 553


  Payables     to   brokers      dealers       and clearing          organizations                                 2425987

  Payables     to   customers                                                                                        86246

  Payables     to   non-customers                                                                                  3432968
  Collateralized        financings

    Securities      sold   under      agreements         to repurchase                                             6616384

    Securities      loaned                                                                                         8600016

    Obligation      to return      securities      received          as   collateral                               6591543
  Financial    instruments        sold not yet purchased                       at fair     value                   4201027
  Accrued     expenses         and other      liabilities                                                           398894

                                                                                                                  32353618


  Commitments           contingencies           and guarantees




  Subordinated borrowings                                                                                           640000



 Members       equity                                                                                              2200537
  Total   liabilities    and    members         equity                                                            35194155



                                                                                     -2-


SG   Americas Securities                                   LLC

NOTES TO STATEMENT OF                             FINANCIAL              CONDITION
AS OF DECEMBER 31 2011



     ORGANIZATION                         AND DESCRIPTION                              OF BUSINESS

     SG     Americas          Securities          LLC      the     Company                    is         Delaware         limited       liability       company and               wholly

     owned                           of    SG     Americas         Securities           Holdings               LLC      SGASH                 or    Member                  Delaware

     limited
                  subsidiary

                  liability       company SGASH                    is         wholly         owned        subsidiary        of SociØtØ GØnØrale                   SG                large

     financial        institution         based     in     Paris France that                   is    engaged         in three       core businesses                retail    banking

     and                          financial        services                          investment                                   and     services        and      corporate         and
            specialized                                             global                                 management
     investment         banking


     The                                                       of investment                                     services                           debt and
              Company           provides            range                                     banking                         including                            equity         capital

     market       financing             debt and      equity       underwriting                fixed        income         and     securitization            sales    and     trading

                                                                   equity derivatives                      sales    and                             program trading as
     mergers and             acquisition          advisory                                                                  trading           global

     well as clearing               settlement and           custodial           services           primarily           for affiliated         companies The Company
     services         clients       in     such     sectors         as        Financial            Institutions            Energy                  Natural      Resources            and

     Infrastructure           providers among                others           The Company                  also    conducts        proprietary           trading      primarily           in


     equity     and    fixed        income      securities




     The      Company             has     its   headquarters             in    New          York         City and         offices        in    Boston         Chicago             Dallas

     Houston          and     Jersey      City


     The                                                   broker       and                   of securities              under     the    Securities         Exchange Act of
            Company            is        registered                              dealer

     1934          primary dealer               designated          by     the       Federal        Reserve         Bank      of    New         York     FRBNY                     and

     registered        independent              Introducing              Broker         with         the       Commodity            Futures            Trading       Commission

     CFFC                   The     Company           is   regulated           by     the    Securities           and     Exchange            Commission             SEC                 the

     Financial        Industry           Regulatory         Authority            FINRA                     and     the     National           Futures     Association                The

     Company           is      member           of the      New         York Stock             Exchange              the    National           Association           of Securities

     Dealers Automated                   Quotations         and     other        regional          exchanges


     SIGNIFICANT                    ACCOUNTING                     POLICIES


     Basis of Presentation                      This statement of financial                          condition has been                  prepared in accordance                     with

     accounting         principles          generally        accepted            in the       United        States        of America that               require      management
     to    make    certain        estimates        and     assumptions                that    affect       the    reported        amounts           of assets      and      liabilities


     and    disclosures           of contingent            assets    and        liabilities         at   December           31 2011             Significant        estimates         and

                                     include      fair     value measurements                        and    provision for potential                    losses     that      may     arise
     assumptions            may
     from                         The     Company          believes           that    the    estimates           utilized    in the preparation               of the statement
              litigation

     of financial           condition are reasonable                    Although             these       and     other    estimates           and    assumptions            are    based

     on    the best     available         information             actual      results        could be          materially        different          from these       estimates



     Cash         Cash       includes       cash on        hand     and       cash in depository accounts                         with major money center                         banks




                                                                                       -3-


Cash segregated                                                                                The                             holds customer                   funds or securities                      and
                                 for regulatory                   purposes                             Company
is   therefore                      to                            cash       or qualified              securities              in      special        reserve        bank account                   under
                      required             segregate

the    Customer         Protection              Rule              SEC        Rule        15c3-3          SEC              Rule        15c3-3               Amounts             segregated                 are

                                                                   the       statement of financial                         condition
generally cash             and    are reported               on



Securities        Purchased               Under             Agreements                    to    Resell            and Securities Sold Under                                  Agreements                    to


Repurchase                 The      Company                purchases            securities              under           agreements             to    resell      resale            agreements
                                                                                                                                       treated                 collateralized
and    takes     possession of these                        securities              Resale           agreements                 are                   as                                 financing

                        The                                                                                  under                                   to                            repurchase
transactions                      Company                  also        sells     securities                               agreements                       repurchase

agreements                 Resale        and         repurchase              agreements                are        generally           collateralized                 by    U.S government
securities




Resale     and    repurchase agreements                            are       recorded           at    their        contracted resale                  or repurchase amounts plus

accrued        interest       Collateral              is   valued         daily      and         the     Company may                     require           counterparties                to    deposit

additional        collateral        or     return           additional          collateral                                 when         appropriate               Contracted             values            of
                                                                                                        pledged

resale     and    repurchase             agreements                approximate                   fair        value because                   they are          generally           short       term        in


nature     and    are collateralized



The      Company           nets     certain           resale           and     repurchase               agreements                   with      the        same       counterparty               on        the

statement        of    financial          condition               when         the       requirements                   of Financial              Accounting               Standards               Board

FASB                 Accounting                Standard                Codification                  ASC                  or        Codification                     210-45          Repurchase

Offsetting       of Amounts Related                        to    Certain Repurchase                           and Resale              Agreements                 are      met


Securities            Borrowed             and             Securities               Loaned                    Securities               borrowed                and        securities            loaned

transactions          are recorded              at    the       amount of cash                  collateral              advanced             or received             Securities          borrowed
transactions          require       the    Company                 to    deposit          cash        or other            collateral          with the lender                  The       Company
receives        cash    or       other     collateral             for        securities          loaned                transactions           from         the    borrower               Securities

borrowed and               securities          loaned transactions                         are        generally            collateralized                 by     equity       securities             The
                 monitors                   market              value        of the                                borrowed             and         securities            loaned      on
Company                             the                                                    securities                                                                                               daily

basis with           additional          collateral             obtained            or    refunded                as    necessary             Contracted             values of securities

borrowed and               securities           loaned            agreements               approximate                    fair       value        because            the     transactions                are

                           term in nature                  and    are collateralized
generally short



Securities       collateral         are        also        advanced            or    received                in    certain          non-cash               securities           borrowed                 and

securities       loaned transactions                        As    required           by        FASB ASC                   860           Transfers              and Servicing                  in    those

instances        where        the    Company                    acts    as     the       lender         in             securities        lending           agreement               and        receives

securities       as collateral           that        can    be pledged               or sold            it
                                                                                                             reports           the    fair    value of the securities                      received

as Securities          received as collateral                          and          corresponding                      Obligation            to     return       securities          received             as

collateral       on    the   statement of financial                          condition



Securities             Securities          transactions                 in     regular-way                   trades        are       recorded         on          trade       date       basis           and

reported       net    by     CUSIP         in        Financial           instruments                  owned               at fair        value        and       Financial            instruments

sold not yet purchased                         at fair          value



Amounts          receivable              and         payable            for     securities               transactions                 that        have         not     yet      reached             their

contractual       settlement             dates        and       which        are settled             through              clearing           organization are reported                             net    by

clearing       organization          in    Receivables                  from brokers                    dealers            and        clearing        organizations or Payables

to   brokers         dealers        and        clearing           organizations on the                             statement            of financial              condition              Securities

transactions          with another broker dealer                               which           have     not        yet    settled       are       reported        gross       in    Receivables




                                                                                          -4-


                                                                                                               or                           to     brokers            dealers           and clearing
                                               and      clearing              organizations                          Payables
from broker                 dealer

                                   the    statement of financial                          condition
organizations on


                                                                         carried                          value           Fair     value         is     generally           based        on published
Financial        instrument balances                          are                        at    fair


                                                                                                                       dealer                                                     See         fair         value
                                 or      other        relevant             factors             including                                   price        quotations
market       prices

measurements                    section        below

                                                                              instruments                 owned           for     collateralized                transactions               bank loans
The     Company may                      pledge financial
                                                                                                    In    accordance                  with       FASB ASC 860                           Transfers               and
and     margin         deposits           at    clearing           organizations
                                                                                        that    can       be    sold       or     re-pledged              by    the        secured       counterparty
                  pledged               financial          instruments
Servicing
                                                        instruments                 owned             and pledged                     as     collateral                  at     fair     value        on        the
are     reported            in    Financial

statement of financial                     condition


                                                                                                                contracts             are       included        in       Financial instruments
Derivatives                     The     fair    value        of forward                 and    option
                                                                                                                                                                           at            value         on       the
                                   value        and        Financial               instruments                 sold        not yet            purchased                         fair
owned            at    fair
                                                                                                                of                                                                                     net       in
statement         of        financial            condition               The         fair      value                 open          futures             contracts           are        reported

                                                                          and                                                                                       to     broker         dealers               and
Receivables            from brokers                     dealers                      clearing             organizations or Payable

                                                     the     statement of financial                            condition
clearing organizations on


                                                                                                                                                               financial              instruments               are
Fair      Value            Measurements                                  significant            portion              of    the        Companys
                                                                                                                                 in                       Fair       value        is    defined            as   the
carried     at fair             value with changes                       in   fair       value recognized                             earnings

          that    could            be    received            to    sell       an    asset       or paid to                transfer                liability         i.e exit             price             in    an
price
                                                                                                         at the      measurement                      date     In    determining               fair        value
            transaction                 between            market         participants
orderly
                                                                                                                                                                     and/or cost
                            uses various              valuation               approaches                  including market                        income                                   approaches
the    Company
                                 market-based                measure               considered              from           the     perspective              of         market           participant              As
Fair    value         is


                           when          market                                          are        not     readily              available              the     Company                 uses         its    own
such       even                                            assumptions
                           to    estimate         those           that    market          participants                 would use                 in    pricing       the        asset    or    liability         at
assumptions
the    measurement date


                                                                                                and Disclosures                        establishes                            value hierarchy that
FASB ASC                   820          Fair Value            Measurements                                                                                          fair


                                                                                                                                                 value        The     three       levels       of the fair
                      the                  to    valuation           techniques                 used to             measure           fair
prioritizes                     inputs

value hierarchy under                          ASC      820              Fair Value                 Measurements                      and Disclosures                    are     as   follows



                                                                               in active            markets for identical                             unrestricted              assets    or liabilities
Level            Quoted               prices     unadjusted
                                                                                               include          U.S                                     securities              equity        stock index
The  Companys Level                                balances              generally                                          government

securities U.S ETFs and                              listed        U.S        options


                                                      in     markets            that          are     not       active           or     for      which         all       significant           inputs           are
Level             Quoted                prices
                                                                                        The                                                      that    trade       in markets               that    are       not
observable             either           directly        or    indirectly                        types of instruments

                                                                                                                                        prices broker or dealer
                                                                  valued based                 on quoted             market                                                              quotations              or
considered             to be       active       but are

                                                                                               levels           of price                                        include           certain        exchange
alternative            pricing           sources with                reasonable                                                    transparency
                                                                                                                                  and       certain           derivative              contracts             Such
shares        certain             U.S          government                 and        agency              securities

                                                     classified           within Level                      of the         fair    value hierarchy
instruments            are       generally



                  Unobservable                                    that    are significant                  to    the      fair    value of the assets or liabilities Level
Level                                            inputs

                                           include           financial             instruments              whose value                    is    determined              using pricing                models
 assets    and        liabilities

                                                                                         similar                                      as      well as          instruments              for     which           the
 discounted            cash        flow         methodologies                      or                     techniques

                                                  value                                                              management                       judgment             or         estimation                The
 determination                   of      fair                      requires              significant

                       Level              balances                                 include           securities            with no observable markets
 Companys                                                    generally




                                                                                                -5-


An      instruments            level        within            the        fair    value hierarchy                      is    based            on      the    lowest           level     of input           that       is


                                            value             measurement                        The                                     assessment                of the                                      of
significant            to    the    fair                                                                     Companys                                                              significance

                  input       to    the    fair    value measurement                                 of an      instrument requires                          judgment              and        consideration
particular

of factors        specific         to the     instrument



The     availability           of observable                   inputs            can        vary        from product                    to    product             and    is    affected             by         wide
              of factors including                                                                                                           whether            the                            new       and
                                                                    example                           type of product
                                                          for                               the                                                                                          is                        not
variety                                                                                                                                                                 product

       established           in the        marketplace                    the    liquidity              of markets and                     other          characteristics              particular             to   the
yet

transaction            To     the     extent           that    valuation                  is    based         on models                  or inputs              that    are       less     observable               or

unobservable                in the    market             the     determination                         of    fair    value           requires             more judgment                       Accordingly

the     degree         of judgment                 exercised                    by     the          Company                in     determining                    fair    value           is    greatest             for

instruments             categorized               in    Level                   In    addition                      downturn               in     market           conditions              could         lead        to

further       declines        in the       valuation            of many               instruments



The                          uses                  and                          that                                        of the measurement                           date
        Company                       prices                   inputs                      are       current         as                                                              including during

periods         of market            dislocation                    In        periods           of market              dislocation                   the        observability              of prices               and

                       be     reduced          for       many             instruments                       This       condition                could           cause        an     instrument to                   be
inputs        may
reclassified           between         levels          See Note                        In       addition              downturn                  in   market            conditions             could       lead       to

further       declines        in the valuation                 of many                instruments



In    certain     cases        the    inputs           used     to        measure               fair    value        may         fall      into      different          levels         of the fair value

hierarchy           In      such     cases         for disclosure                     purposes               the    level        in the         fair       value hierarchy within                         which

the    fair   value         measurement                 in    its    entirety             falls        is   determined                based          on     the    lowest         level        input      that       is


significant        to the      fair    value measurement in                                    its   entirety




Customer               and         Non-Customer                            Balances                         Customer                 and        non-customer                      balances               on        the


accompanying                 statement            of financial                  condition               are    as    defined               by SEC Rule                  15c3-3             Customer and
                            balances                                                      amounts             related                   client        trades          that             cleared
non-customer                                 may         also        include                                                    to                                            are                        through

foreign       affiliates       and        are reported                   in     accordance                  with the Exemption of Certain                                     Foreign              Brokers          or

Dealers Rule                 SEC      Rule        15a6        SEC Rule 15a6
Receivables            from and            payables             to       customers                   and     non-customers                      include           amounts            due       on    cash          and

margin          accounts            The      Company                     has         securities              owned          by customers                         and     non-customers                        in    its


possession          These          securities           are    not reflected                    in the        statement of financial                            condition



Employee           Compensation Plans                                     The        Companys                  employees                   may       participate             in certain             SG    stock-

based compensation                    plans        See         Note           12

Other         Assets          net          Property             leasehold                   improvements                        and        equipment                  fixed assets                        net       of

accumulated                                        and        amortization                       are        included            in    Other          assets           net    on      the      statement             of
                         depreciation

financial        condition            The         Company                     periodically                  evaluates                the     carrying             value        of      other        assets          to

determine         if   events or circumstances                                exist       indicating            that       the       asset      may        be    impaired


The     useful    life       of fixed assets ranged                           from             to     13 years         at   December                  31 2011


The     Company              has    ownership                 interests              in    several           exchanges                  Due          to    the    demutualization                    of some

exchanges              the    Companys                    ownership                    interests              in     exchanges                  are         classified            as     either          trading

securities        or     exchange           memberships                         and       are        included             on     the       statement              of financial                condition             as

Financial         instruments                owned                   at       fair         value             and      Other             assets             net        respectively                  Exchange
membership               seats      are     recorded                at        cost        or     if    an     other-than                temporary                 impairment                  in    value          has




                                                                                                -6-


                                                                                                      estimate          of the                                       Management                  believes
occurred            at         value that             reflects        managements                                                     impairment

that    no     such                                in    value occurred during 2011
                          impairment


                                             The                                                and     liabilities           denominated                      in                     currencies            are
Foreign          Currency                                Companys                assets                                                                              foreign

                          the rate         of exchange               at   the    statement of financial                       condition date
translated          at




Accounting                Developments                          In     January            2010         the       FASB          issued          Accounting                       Standards         Update

ASU                 No         2010-06            Fair      Value           Measurements                    and Disclosures                     ASU                 No 2010-06                      which

amends           ASC 820                    Fair         value        Measurements                     and        Disclosures                  to        add        new         requirements                for


                                                                                       instruments               into    and        out       of Level                     and           and     separate
disclosures              about           transfers        of financial
                                                                                                       and        settlements                  relating              to     Level               financial
disclosures               about           purchases              sales          issuances
                                                                                        value         disclosures              about          the        level       of disaggregation                    and
instruments               It     also      clarifies        existing            fair


about         inputs      and        valuation           techniques             used       to    measure             fair     value        ASU No                    2010-06            was      effective


                                     on                          2011          no    such       transfers         occurred            during             2011             The     adoption         did not
for the        Company                     January

have          material           impact          on     the statement of financial                        condition



In     April     2011           the      FASB           issued       ASU No               2011-03           ASU             No 2011-03                          Transfers               and Servicing

ASC 860                  Reconsideration                   of Effective                Control for Repurchase                             Agreements The                           amendments                in

                                                                                                                                         criterion                                the    transferor          to
this    ASU         remove from the assessment                                  of effective           control                 the                          requiring

have      the    ability            to   repurchase            or    redeem          the     financial           assets       on     substantially                   the    agreed        terms even

                         of default                                                 and            the collateral              maintenance                     implementation                   guidance
in the        event                              by the transferee
                                                        Other        criteria                               to    the       assessment               of effective                  control        are       not
related        to     that       criterion                                          applicable


changed             by    the        amendments                 in     this     ASU ASU No                           2011-03             is    effective              for       the     Company on
                                                            be                                                           transactions                or modifications                      of existing
January                  2012 and            should                  applied           prospectively to

transactions              that      occur        on     or after the effective                   date       The Company does                             not        expect that          the     adoption

                                                                                                statement of financial                         condition
of     this   ASU         will have               material           impact on            the




In     May 2011              the         FASB         issued     ASU No                2011-04          ASU             No         201    1-04             Fair Value                 Measurements

                                                                                          Common                 Fair         Value           Measurement                        and        Disclosure
ASC 820                        Amendments                  to        Achieve

Requirements                   in    U.S         GAAP      and IFRS                 The         amendments               under           ASU         2011-04               change         the    wording

used to describe many                            of the requirements                    in   U.S GAAP                   for   measuring                  fair       value and           for disclosing


                                                  value        measurements                      The        amendments                   include                      those that             clarify        the
information               about           fair

                                                                                                            value measurement                            and        disclosure
FASBs            intent         about       the       application           of existing            fair                                                                                  requirements

                                                                                                          or                                  for    measuring                   fair    value      or      for
and              those that               change               particular            principle                   requirement

disclosing               information               about        fair        value       measurements                        ASU No                  2011-04                is    effective         for      the


                                                   2012 The Company does not expect                                           that       the    adoption              of    this      ASU       will     have
Company on January
                                                                                                condition
     material         impact on the statement of financial



In     December              2011          the     FASB          issued         ASU No                2011-11 Disclosures                                about        Offsetting           Assets and

Liabilities              which           amends          ASC 210               Balance          Sheet          The      amendments                   in    ASU No                 2011-11          require

                                                                          about                           and        related                                          to    enable users               of    its
an     entity       to    disclose           information                             offsetting                                     arrangements

                                                  condition                    understand             the      effect         of    those arrangements                             on     its    financial
statement             of financial                                     to

                    The Company                                           to                 the   amendments                  for       annual reporting                       periods         beginning
position                                           is    required               apply

on     or after        January               2013         and       interim         periods        within those annual periods                                      The Company does not

expect         that       the       adoption            of this        ASU          will     have              material            impact           on     the       statement            of financial

condition




                                                                                              -7-


FINANCIAL INSTRUMENTS

Financial        instruments            owned            at    fair       value         including            those pledged             as    collateral         and     financial

instruments         sold not yet purchased                          at   fair       value   at   December 31 2011                     consist       of the following              in
thousands


                                                                                                                                                  Financial

                                                                                                              Financial                        Inruments
                                                                                                           Instruments                        Sold Not Yet
                                                                                                               Owned                              Purchased



                          Equity        securities                                                            4101520                                213816

                          U.S        government and agency                                                    4974878                              3840369

                          Corporate            and other debts                                                        1822                                      138

                          Derivative           contracts                                                         126347                                 146704

                          Total                                                                               9204567                              4201027




Equity       securities        include        equity     stock           index        securities         preferred        stocks        and       warrants            Corporate
and    other     debts include              corporate         and        municipal           debts         Derivative          contracts          include       forward and
listed      options     entered        into    for     trading           purposes           It   also      includes       certain       OTC        derivative          contracts

entered into        for                     other     than trading
                          purposes



Pledged        financial       instruments            that    can        be    sold    or re-pledged             by    the     secured        counterparty             generally

include        equity      securities          and     U.S       government                  and        agency        securities         including          treasury        bills

treasury       bonds      and     agency        securities          and        are    reported        in   Financial         instruments           owned         and pledged

as    collateral      at    fair       value     on    the     statement              of financial            condition         The      Company            also      loaned       or


pledged        financial       instruments           owned          to    counterparties                and    clearing        organizations             that    do not have
the   right to     deliver      or    repledge the collateral                        At December 31 2011                       the    fair   value of such            securities

delivered or pledged                 totaled    $3.7 billion



COLLATERALIZED                             TRANSACTIONS

In    the   normal        course of business                   the       Company             receives         securities        primarily          in    connection           with

resale      agreements          securities           borrowed             and        custody          agreements          In    many         cases       the     Company           is


permitted by contract                 or    custom      to deliver             or    re-pledge         the    securities       to    counterparties            in    connection

with entering into              repurchase           agreements                 securities        lending        agreements             other      secured           financings

and    meeting      settlement          requirements


As of December             31 2011             the    fair    value of securities                     received     as collateral             by    the   Company           that    it



was      permitted        by    contract         or    custom             to    deliver          or   re-pledge        was          $28.0     billion       of        which    the

Company         delivered        or    re-pledged            as collateral            approximately             $22.3      billion




The  Company received securities in connection with certain non-cash securities loan agreements  As

required   by FASB ASC 860     Transfers and Servicing the Company reported the fair value of these

securities  on the statement of financial condition At December 31 2011 fair value of securities
received       from     these        transactions        totaled              approximately             $6.6 billion           and     are    reflected         as    Securities

received       as collateral          and    Obligation          to      return       securities         received as collateral




                                                                                    -8-


RECEIVABLES   FROM AND PAYABLES TO                                                           BROKERS DEALERS AND CLEARING
ORGANIZATIONS

                                      from     and                                          dealers           and    clearing        organizations              at
Amounts           receivable                            payable to brokers

December            31 2011           consist      of the following              in thousands


                                                                                                          Receivables                         PayabJes


                                                                                                                 319027                          955117
                           Clearing organizations

                           Broker         dealers                                                              1329448                         1311264

                           Securities          failed-to-deliver/receive                                             92242                       159606

                           Total                                                                               1740717                        2425987


                                                                                        customer               securities         transactions             through           securities
The                                                                            and
       Company               clears       certain        proprietary

                                             and     other                      houses            The         amounts          receivable            from and              payable    to
clearing          organizations                                clearing

                                                                                                              settlement          balances           and    net      receivable       or
                                                          good        faith    deposits            net
clearing          organizations include
              balances                        from      unsettled       trades
payable                          arising



                                                                                                                     include       net     settlement             balances        from
At December               31         2011      clearing        organization                receivables

                                                             for   $167.1       million and               net       settlement          balances       from          other    clearing
securities         clearing          organizations

                                                                                                                                     payables from unsettled                     trades
houses       for    $151.9        million Clearing organization payables include                                             net

                                                                      balances         with other                            houses        of $4.0 million
of $951.1          million and            net settlements                                                      clearing



                                                                                     broker        dealers           include                   receivables            and     payables
The    amounts           receivable           from       and   payable          to                                                 gross

                                                                                                       futures                           accounts           with      an     affiliated
         unsettled           trades       with       other     broker         dealers            net                   clearing
from
                           and                            commissions                and    brokerage               fees    with broker           dealers            At December
broker       dealer                  outstanding
                                                                      include         gross receivables                    from      unsettled         trades         for     $1294.9
31 2011             broker        dealer       receivables

                                                                                                                                                                balance        with   an
                                      fees    receivables             for    $20.6         million and                net    futures          clearing
million brokerage
                                                                                                                                  balance                            fair    values of
affiliated         broker        dealer      for   $13.9       million The                 net    futures        clearing                        includes

                                                                million              Broker        dealer                            include          gross       payables        from
         futures          contracts          for     $33.4                                                          payables
open
                                                                                million          and                         fees                      for      $15.2       million
unsettled         trades     for      approximately            $1296.0                                   brokerage                    payables



                                                                                             the    contract          value       of securities            that      have     not been
Securities          failed      to    deliver      and    receive       represent

                                                                                                   date          Securities          failed     to    deliver        and     securities
delivered          or    received by the             Company            on    settlement

                                                                              related       to     client        trades       that      are    cleared          through         foreign
failed       to    receive        also       include       amounts

affiliates         and    are                      in    accordance            with        SEC     Rule             5a6 At December                    31 2011               securities
                                  reported
                                                                              receive        in    connection               with      these      activities          totaled      $54.9
failed       to    deliver       and     securities          failed     to

million       and       $60.5     million respectively




OTHER ASSETS NET AND ACCRUED EXPENSES AND OTHER                                                                                            LIABILITIES


                                                                                                       amounts             that   are    included          in   Other assets
 Other Assets net                       The following              table      sets forth         the


       on                                  statement of financial                    condition           at    December            31    2011        in thousands
 net          the    Companys




                                                                                     -9-


      Dividends           and    interest     receivable                                                                                                               166971

      Deferred       plan investments                                                                                                                                   61496

      Receivables          from       affiliates                                                                                                                        49902

      Exchange memberships                      at cost               net    of provision for impairment                        $3791                                       2684

      Fixed assets               net    of accumulated               depreciation           $6587                                                                             149

      Miscellaneous             receivables           and    other                                                                                                          4088
      Total                                                                                                                                                         $285290




Dividends           and     interest      receivables              mainly      include       outstanding            dividends          and     interest      from      trading

securities          and     outstanding             interest        receivable           from       resale                             and      securities          borrowed
                                                                                                                  agreements
activities          Dividends          and    interest        receivables            include        outstanding            balances         with    SG     and      affiliates

Balances        with        affiliates        are      discussed          in      the    related       party       transactions          section        in      Note          At
December             31     2011         outstanding              dividends          and    interest         from         trading     securities         totaled       $159.4

million       and    outstanding           interest     from resale            and      securities         borrowed         activities       totaled     $7.5 million



Deferred       plan investments                 include       company owned                  life     insurance policies              with      cash       surrender

value of $61.5             million



Receivables           from affiliates           include           outstanding           balances       from transactions              entered       into     with    SG     and
affiliates     in the      normal        course of business and                    pursuant to Service Level                        Agreements          SLAs
Balances       with       affiliates      are    discussed in the related                   party      transaction          section     in   Note

Miscellaneous              receivables          and    other       include        accrued       fee   income         prepaid expenses                and     other     sundry
receivables



Accrued         Expenses              and Other             Liabilities             The     following             table     sets    forth     the   amounts          that    are

included        in    Accrued           expenses            and      other        liabilities         on    the     Companys             statement           of     financial

condition at December                    31     2011     in thousands



                                       Employee          related       payables                                                159347

                                       Dividends            and    interest       payable                                      157510

                                       Payables        to    affiliates                                                            53591
                                       Other       liabilities                                                                     28446

                                       Total                                                                                 $398894


Employee        related         payables include               balances        for      employees compensation                        and     benefits       and    deferred

compensation              plan liabilities             Dividends            and    interest      payables           include         outstanding        dividends          from
trading    securities           and     outstanding            interest      payable         from repurchase agreements                             securities       loaned
and    other    activities            Dividends             and     interest       payables         include         outstanding          balances          with      SG     and
affiliates     Balances           with    affiliates         are   discussed in the related                               transactions        section      in    Note        At
                                                                                                             party

December            31 2011            outstanding            dividends           and      interest        payables         from      trading       securities         totaled

$152.5     million         and     outstanding              interest      from repurchase                  agreements          and     securities        loaned        totaled

$5.0 million




                                                                               -10-


                             to      affiliates        include           outstanding          balances     with     SG      and    affiliates         for    operational        and
            Payables
                                                                                                                           with   affiliates          are   discussed      in    the
                                                           and                          services          Balances
            administrative              support                    management
            related                  transaction           section       in   Note
                        party



                                            include                 fees accrued         expenses        and     other    sundry payables
            Other     liabilities                          legal




            FAIR VALUE                      MEASUREMENT

            Fair Value Measurements                                on      Recurring Basis


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


            measured          at     fair    value on            recurring      basis    as   of December         31      2011    in thousands

                                                                                                                                                              Total    Fair Value

                                                                                                                                                               in   Statement           of

                                                                                                                                                                    Financial

                                                                                     Level                       Level                  Level                       Condition


Assets

                                                                                     5398924                     1192619                                               6591543
Securities    received          as   collateral




Financial     instruments            owned            at    fair   value

                                                                                     4096512                         4509                       499                    4101520
     Equity        securities


                                     and                                             4560831                       414047                                              4974878
     U.S government                          agency

                                                                                                                     1822                                                       1822
                       and      other       debt
     Corporate

                                                                                        123959                       2388                                                  126347
     Derivative         contracts


                                                                                     8781302                       422766                       499                    9204567




Lialilities


Obligation        to return        securities

                                                                                     5398924                     1192619                                               6591543
 received     as    collateral



Financial     instruments            sold not yet

                         at fair      value
   purchased
                                                                                                                                                                           213816
                   securities                                                           213816
     Equity

                                     and                                              3721608                      118761                                               3840369
     U.S government                          agency
                                                                                                                                                138                               138
                       and      other       debt
     Corporate

                                                                                         95949                      50755                                                  146704
     Derivative         contracts

                                                                                      4031373                      169516                       138                     4201027




                                                                   reconciliation        of    the                  and    ending balances             for   Level      assets
             The     table      below         sets forth                                             beginning

                                        measured            at   fair   value on        recurring       basis    during     the
                                                                                                                                  year ended          December 31 2011
             and     liabilities


             in thousands




                                                                                              11


                                                                                                                 Unrealized                        Realized

                                                                                                            Gains Losses                     Gains Losses
                                                                                                             Related to                           Related          to
                                                                                Net Sales
                                                                                                and              Assets Held                       Assets         No                   Ending
                                               Beginning                   Purchase
                                                                                                                 at Year End                      Longer Held                         Balance
                                                Balance                     Settlements

Assets
                                                                                                                                                                                               499
              securities                                   432                                  92                            51                                   76
   Equity




Liabilities



   Equity     securities                                    52                                51
                                                                                                                                                                                               138
                                                            126                                                               12
                 and    other    debt
   Corporate
                                                                                                                                                                                               138
                                                            178                               51                               12




                Valuation          Techniques

                                                                                                                                                     traded                     securities          are
                                   Securities                  Exchange traded                  equity       securities             Exchange                       equity
                       Equity
                                                                                                           which      are generally           obtained            from    pricing       services
                       measured based on quoted                           exchange          prices

                                                            as    Level          in the    fair      value hierarchy
                       and   are   categorized



                                                                                                                                   traded                    securities         are    measured
                       Non-exchange                  traded       equity        securities           Non-exchange                             equity

                                                                                                                            data     from         external                            and     prices
                                                       broker                                               service                                               providers
                       primarily         using                      quotations              pricing
                                                                                                                             and                                  as    Level          in the       fair
                                        from                       executed           market         transactions                   are     categorized
                       observed                      recently
                                                                                                                                                              traded      equity       securities
                                                                                                           not available non-exchange
                       value hierarchy Where                       such     information               is


                                                     as   Level          financial        instruments
                       are   categorized


                                                            and Agency             Securities                 Treasury         Securities            U.S      Treasury          securities          are
                       U.S Government
                                                                                                                                                     as    Level          of the       fair    value
                                                                          market prices               and     generally        categorized
                       measured based on                    quoted

                       hierarchy


                                                                                                                    non-callable            U.S                   issued       debt securities
                                                                                          Callable and
                       U.S Agency Issued Debt                        Securities                                                                     agency
                                                                                                            and     trade    data for identical              or   comparable            securities
                             measured           based       on quoted            market prices
                       are

                       and                          classified      as    Level        of the fair value hierarchy
                             generally



                                              and Other Debt                       Corporate               and    other debt           securities      held by the              Company              are
                       Corporate
                                                                                                                             Prices     of debt securities                which        cannot         be
                       generally traded                   OTC      and     are    classified          as    Level

                                                                                                or through           comparative            securities        are valued using broker
                       observed          in    the    market either directly
                                                                                                                      that    are     not    observable            These         securities          are
                       quotes      or     models           which         may     incorporate               inputs
                                                                                                                      held as of December                     31       2011     whereby            such
                                         as     Level             There      were      no     instruments
                       classified

                       models were used


                                                                                                                             derivative           contracts        entered        into        by     the
                                                      Listed       Derivative          Contracts                 Listed
                       Derivatives
                                                                                U.S                              traded                     and     futures        contracts           which         are
                                                                 include                  exchange                           options
                       Company            generally
                                                                                                             that    are     generally        obtained            from    pricing           services
                       measured based                     on quoted         exchange            prices

                                                                                                                       as    Level          in the    fair    value hierarchy and                    are
                       The      fair   value of options                  contracts        are   categorized

                                                                                The               values         of futures         contracts        are     excluded          from     the        table
                       reflected         in    the     table      above                fair


                                                                    net    in    Receivables           from brokers                 dealers        and     clearing           organizations or
                        above      and        are    reported




                                                                                                       12


      Payables          to    brokers            dealers       and clearing organizations on                                    the    statement of financial                  condition

      At December 31 2011                             the net       fair    value of             futures          contracts      totaled        $33        million    See Note


      OTC     Derivative             Contracts               OTC       equity          derivative                 contracts      mainly         include        derivative        contracts


      entered          into                the                             to     economically                      hedge        its     exposure             to     certain     deferred
                                by                    Company
      compensation              liabilities              These         contracts                are    generally           valued        using        observable            inputs    OTC
      derivative         contracts              are                                                    in    Level          of the       fair       value hierarchy given                  that
                                                       primarily           categorized

      the inputs        to the       valuation           models            are   observable



      Securities         received               as collateral              from non-cash                      securities         loaned               If the       securities    received

      as   collateral         are     exchange               traded        equity          securities             and/or      U.S       government             securities        they are

      measured          based        on                                                          which            are   generally       obtained            from     pricing     services
                                            quoted           exchange            prices

      As such          non-cash            securities          loaned are categorized                              as   Level          in the       fair    value hierarchy           If   the

      securities         received                as     collateral              are                                       traded                           securities       and/or         non
                                                                                           non-exchange                                 equity

                              and                       debt    securities                 they       are     measured           primarily            using        broker      quotations
      government                       agency

      pricing     service           data    from        external           providers and                    prices      observed         from         recently       executed      market

      transactions These                    securities         are    categorized                 within Level                  of the       fair    value hierarchy



RELATED PARTY TRANSACTIONS

At December             31 2011             amounts           outstanding                  to   and        from affiliates are reflected                     in the    statement of

financial    condition as set forth below                              in thousands


Assets
  Cash                                                                                                                                                                   312

  Receivables                from brokers                dealers           and clearing organizations                                                                13968
  Receivables                from non-customers                                                                                                                             58

  Securities           purchased                under        agreements               to    resell                                                                  479714
  Securities           borrowed                                                                                                                                     711004
  Securities           received            as    collateral                                                                                                         751956
  Financial instruments                          owned               at fair          value                                                                           2388
  Other      assets          net                                                                                                                                     50029


Liabilities

  Payables         to    customers                                                                                                                                     1301

  Payables         to    non-customers                                                                                                                         3432968
  Securities           sold under               agreements            to    repurchase                                                                            12484
  Securities           loaned                                                                                                                                  1262256
  Obligation            to    return        securities          received              as collateral                                                             751956
  Financial instruments                          sold        not yet purchased                                                                                       50755
  Accrued         expenses               and other            liabilities                                                                                            54210

  Subordinated                borrowings                      refer to Note                      10                                                                 640000


The    related     party        balances               set    forth        in    the       tables           above       resulted        from         transactions           between        the


Company          and     SG        and      affiliates         in    the        normal           course of business                     as   part      of    its    trading      clearing

financing        and    general           operations


The                          maintains                          bank            accounts                     an                       bank          These      bank      balances
       Company                                    certain                                             at            affiliated                                                             are

included     in Cash on the statement of financial                                          condition and                are as set forth             in the table       above




                                                                                            13


                                                                                  transactions                                an   affiliate             clearing       broker           dealer         At
                                                                 futures                                    through
The Company clears                       proprietary
                                                                                                                         with        the clearing               broker        in    Receivables
                                                                                            net    receivable
December 31 2011                        the   Company               reported
                                                                                                                   statement             of financial             condition              and     as set
                         dealers          and       clearing            organizations on                    the
from brokers
forth    in the      table    above


The                                                         and        settlement            accounts             of   SG      and       affiliates         and     provides              securities
        Company            carries        clearing
                                                                                                                                                                                         settlement
                                                                  services             for their         U.S       trading         activities              Clearing and
clearing         settlement and                   custody
                                                                                                                              customers              and non-customers                          on    the
balances         are     reflected           in    Receivables               from and             Payables              to

                                         condition and                  are as       set forth        in the table             above
statement of financial


                                                   into     various          collateralized                 agreements             and        financing transactions                           with   SG
The Company                also     enters

and     affiliates


                                                                                                                                                                        with        affiliates          in
                                                      into       short-term               resale         and       repurchase                 agreements
        The      Company                enters
                                                                                                                                                                                        are     entered
                             with short             sales     and       other        collateralized               transactions Resale                        agreements
        connection
                                                                                                                                                                                                   or   to
                                   to                      the    securities              needed         for      clearing         organization margin                          deposits
        into     primarily               acquire
                                                                                                         Resale                                      are     included              in     Securities
        invest       excess        cash           from      operating             activities                             agreements
                                                                                            the    statement of financial                          condition         and      are        as set forth
                           under         agreements               to    resell       on
        purchased
                                                                                              are     entered into for operational                               purposes            Repurchase
        in the table         above Repurchase                          agreements
                                                                                                                                                                    on     the      statement           of
                             are    included              in Securities              sold under              agreements              to       repurchase
        agreements
        financial        condition and               are as       set       forth      in the     table      above


                                                          conduit           for   certain         stock borrowing                    and           lending        activities            for    SG     and
        The      Company            acts      as

                                                                              borrows             from      third party            counterparties                 and      lends          to   SG     and
        affiliates         The Company                    primarily
                                                                                                                                entered            into    in    connection               with short
                           Other stock              borrowing               and     lending          activities         are
        affiliates

                  and    other                            activities
        sales                       financing


                                                                                                             these           activities            are    recorded            at    the        contract
        When         cash     collateral             is    advanced               or      received
                                                                                                     loaned on the statement of financial                                          condition and
        amount          in Securities             borrowed and                 Securities

                                                                                                                                                    received        in     connection                 with
        are     as   set    forth       in    the        table    above           When            securities           collateral             is


                                                                                       value of the               securities         received              are reported             in Securities
        certain       stock loan agreements                            the    fair

                                                                                                       securities             received as collateral                       on      the     statement
        received as collateral                      and     Obligation to return
                                                                                                in   connection                with       these          securities        loan agreements
        of financial          condition               Affiliated             balances

        are as       set forth      in the table             above


                                                                                                     loaned            transactions                are     prepaid         and           the     related
        Certain         securities            borrowed             and        securities

                                                                                                                                     securities             borrowed               and     securities
        securities         are     delivered              or received             at        later      date        Prepaid
                                                                                       in   Receivables                from or payables                     to    brokers           dealers           and
        loaned are unsecured                        and     are    reported

                                                of financial                                                       condition              There           were     no    prepaid           securities
        clearing organizations on the statement

        loan and         borrow          with       affiliates         at    December 31 2011



 The                         entered                      various            forward         contracts             with        SG     to      hedge         its     exposure              on     certain
         Company                                  into
                                                                                                                                                                                                 totaled
 trading       positions           As of December 31 2011                                   the      fair    values of these                   open forward                contracts

                                                                                                                                                                           the       statement           of
                                                             in     Financial instruments                           owned                at   fair value on
 $0.5 million and                  are    reported

 financial        condition



 SHORT-TERM BORROWINGS

                                                                    include            bank       loans        from          affiliated        companies                and     bank accounts
 Short-term borrowings                            generally

                        balances         that      are    used         to   fund operating                  activities          As of December                      31 2011               there       were
 with credit




                                                                                              14-


                                                                                                                                                    Credit balances                in       bank      accounts
           outstanding                short-term              borrowings             from          affiliated            companies
     no

     totaled     $0.6 million                at    December 31 2011


10   SUBORDINATED                            BORROWINGS

                                                                                                                                   and    future         claims        of    all    non-subordinated
     Subordinated                borrowings                  are    subordinated                  to    all      existing

                                                                                                                                                                       under        the       Uniform Net
     creditors        of the           Company                and     constitute             part       of the         Companys                 net      capital

                                                                                                                                                                                             effect       to    such
                                       defined           Subordinated                borrowings                     may       be    repaid          only if after giving
     Capital     Rule            as
                                                                                                                                     of the         SEC
     repayment             the    Company meets                       the        net capital            requirements


                                                                                                                                                                                                              market
     Subordinated                borrowings                   are    generally
                                                                                             obtained               from       affiliated            companies              at     prevailing

                                                                           subordinated                                             totaled         $640 million and                     are       pursuant to
     rates     As of December 31 2011                                                                       borrowings

     multiple         subordination                 agreements                with       SG         Subordinated                    borrowings             bear interest               at    floating          rates

                                                                                                       LIBOR                   70     basis         points        Subordinated                     borrowings
     ranging       from LIBOR                                50     basis     points          to
                                                                                                                                                                            contain           an     automatic
     mature      on        various           dates           through         2013            Subordinated                   borrowing               agreements
                                                                                                                              extended                    additional                                             the
                                                                    the     maturity          date           will      be                           an                       year providing
     rollover         provision              whereby
                                                             notice         of                                on       or     before          the    thirteenth             month preceding                      the
     borrower          does            not    give                                repayment

     scheduled         maturity date



11   EMPLOYEEBENEFIT PLANS

     Employees              are       eligible          to    participate           in        401k                Savings           Plan the             401k Plan                      through           Societe

                                                                                 Retirement                 Plan from the date of hire                           if              are    at    least      21    years
                                             and        Investment                                                                                                    they
     Generale              Savings
                                                             able    to     make                  maximum                   allowable           contribution                of     $16500                 with     an
     of    age        Employees                   are

                                                                    contribution              for       anyone who became                            age     50       or older         in     2011        of their
     additional         $5500 catch-up
                                                                                                              certain         Internal          Revenue               Service          limitations               The
                                                        as     defined            subject              to
     pre-tax      compensation
                            100%                             of employee                contributions                  to     the    401k            Plan up          to         maximum                 of   3%   of
                    matches
     Company
                                                                                                    Internal             Revenue               Service           limitations                 All      employee
                                                                           subject           to
     the      employees                    compensation
                                                                                                   and                                   contributions                are subject             to         five-year
     contributions               are       100%         vested immediately                                    all   employer

     vesting      schedule


                                                                                    in    two                                            the    Societe           Generale             U.S          Operations
     The       Company                is    also             participant                               pension              plans

     Pension           Plan            and         the        SG          Pension             Plan               collectively                 the        Pension             Plans                  These          are


                                           defined           benefit        pension               plans          covering           eligible             employees            of       the     Company              as
     noncontributory

     defined      by       the    Pension            Plans that are administered                                    by   SG

12   DEFERRED                     COMPENSATION AND SG STOCK INCENTIVE PLANS

                                                                                                  deferred                                                plan        for        eligible           employees
     The                                                              voluntary                                          compensation
               Company                     sponsors
                                                                                                        deferred                                                   are joint            and        several      with
                                        The                               related       to    this                            compensation                plan
      Participants                                 liabilities

                                                                                             deferred              basis                                 bonus        deferrals              are    charged         to
      SG       Contributions                 are        made          on          tax                                          Employee
                                                                                                                       allowed           to   invest       their deferred                   bonus        in    select
                      in    the        year of the                award          Participants                 are
     expense
                                                                                                                                                         will fluctuate             based           on    changes
      investment            funds The                   value of the deferred                          compensation                   liability

                                                                                                                                                deferred                                                            of
      in   value       of the              investment               funds         As of December                            31 2011                                compensation                     liability


                                                                                                                 and        other                          on     the       statement              of financial
      $46.5     million           is       included            in    Accrued             expenses                                     liabilities



      condition


                                                                                                                                                                                               nominal              of
                                                                                                                         to   defer                         fidelity bonus
      Each year            the    Company                requires           selected          employees                                       portion
                                                                                                                                                                                       nominal            amounts
      their    bonus                                              Involuntary                 Plan                Plan participants                      fidelity bonus
                             compensation
                                                    of       SO     shares        or select            investment              funds during                the vesting             period the fidelity
      track    the     performance
                                                                                                                                                                                                               of the
      bonus      is   said        to    be invested                   in    SO      shares             or    select      investment             funds The                  deferred           portion




                                                                                                            15


                                                                                   over the requisite                 service         period of approximately                            three     to
     bonus        compensation                is   expensed             ratably

                                                                                                                      will                     based        on    the                             of
     four     years       The value of              the deferred              compensation             liability                 change                                 performance

                                                                                                               The                                                                                 of
     SG      stock        or
                   employee                           selected            investment            funds                   Company                has     recorded                    liability


                                                                                                                  and       other                            on       the        statement         of
     $50.8 million which is included                                          Accrued
                                                                         in                                                              liabilities
                                                                                                expenses

     financial          condition           The     amount of nonvested                       share based            fidelity      bonus        is   $22.1        million which                  will


     be recorded over the weighted                            average           life    of 20     months


     The       Companys                 employees             are        granted        awards         under         SGs         various        stock        incentive                 plans     SG

     sponsors           an     SG     Global         Employee             Share        Ownership Program                      GESOP                     allowing             employees             to


     purchase           SG     stock at            20%      discount           The Company provides                         matching           contributions                to    the    GESOP
     which        are    equal to            specified        percentage           of the employees contribution                                 as   defined           by the          GESOP


     SG     has    also        granted        options       to     purchase        shares         of   SG      stock to certain                employees              of the           Company
                                                   become          exercisable                      the    completion             of                              vesting           period and
     Generally            the    options                                                 upon                                              three-year


                               years from the date
                  seven                                             of grant
     expire


     SG                        free     SG         shares     to    certain        eligible         employees               under        its    Deferred              Shares           Plan      All
             granted
     beneficiaries             are                   to the      condition of presence                    at   the    end     of the applicable                  vesting          period         For
                                      subject

     the    Deferred            Shares        Plan      the      fair     value of the            free     shares       granted           measured               at   the    grant        date      is



     recognized               over     the    vesting        period           during         which an          employee            is    required           to    provide              service      in


     exchange           of shares




13   OFF-BALANCE-SHEET RISKS

     In     the                        course         of    business              the     Company              enters       into        contractual              commitments                    with
                   ordinary
     off-balance-sheet                 risk in       order to           meet     its    financing and             hedging          needs        and on                riskless          principal

                                of    its    customers             These       commitments                entail      varying         degrees         of risk including market
     basis for that

     risk which                       be           excess     of amounts                                   in the       statement           of financial              condition            Based
                              may            in                                        recognized

               the      credit                      of counterparties                   collateral        values        and       past     loss       experience                 management
     upon                             quality

     believes           the    consummation                 of      these       commitments                will      have        no     material            adverse          effect       on      the

                                                                                        results
     Companys                 financial       position        or operating



     Securities          sold         not                                                     obligations            of the       Company              to    deliver             the    specified
                                             yet     purchased             represent

                                 contracted                                                                                 to                       the                     in the       market
     security        at the                           price      and thereby                 create        liability              purchase                  security

                                                                              these      transactions              result        in     off-balance               sheet          risk      as     the
     at     prevailing           prices            Accordingly
                                                                                       the   sale     of securities           sold       not yet purchased                        may     exceed
     Companys                 ultimate        obligation           to    satisfy

     the    amount           reflected        in the    statement of financial                      condition




                                                                                             -16-


                                                                                          derivative           financial             instruments                  that    were         executed          for
     The       table    below         sets    forth       the     Companys
     trading       purposes              through       regulated            exchanges            and       OTC            at    contract           or   notional            amounts              together


     with their fair value at December                                31     2011        in thousands


                                                                                                                                 Contractual/

                                                                                                                                     Notional                                        Fair

                                                                                                                                     Amount                                      Value



                       Futures contracts

                          Commitments                to    buy                                                                          1478275                                      7461
                          Commitments                to    sell                                                                        6847705                                       40871


                       Listed options

                                                                                                                                             705759                              139219
                          Long

                          Short                                                                                                         1287988                                 111209


                                                                                                                                              36261                                     473
                       Forward            contracts




                                                                        which        are      future       commitments                  to   buy        or    sell    equity          stock indexes
     The Companys                     futures     contracts
                                                       financial                                     are   executed             on     an exchange                   and        cash    settlement          is
     interest      rate and           currency                              instruments

                                                          market            movements                Futures          contracts              mature           at     various          dates       through
     made        on           daily      basis    for

     2014

                                                                                         consist        of various               call    and                                     on     equity       stock
     The                                                           contracts                                                                        put       options
               Companys                  listed options

                                                                            various        dates       through          2015
     indexes           Options contracts                expire         at




     Forward            contracts           include        certain          agreements               with          SG      to    deliver           securities              at    maturity           These


     agreements               mature in less than one                       year


                                                                        used       for                         other            than     trading             include            certain          contracts
     Derivative               financial       instruments                                     purposes
                                                                                                                    its                        to       the        fluctuation              in   value      of
     entered           into    by     the    Company              to    economically                   hedge               exposure
                                                                                         At December 31 2011                                 the                           had        contracts       with
     certain       employee              deferred         compensation                                                                              Company
                                                                  million          and     net                        fair       value totaling                    $48.8        million The              fair
     notional          amounts            totaling        $95                                        negative
                                                                                                in     Financial               instruments              owned                   at   fair value          and
     values        of these           contracts         are      reported          gross

                                                                                                     at fair       value on          the      statement of financial                          condition
     Financial instruments                       sold not yet purchased

     These       contracts            were    entered          into    with an          affiliate       and        carry       expirations              ranging from March                        2012      to


     March 2013


14   CONCENTRATION OF CREDIT                                                 RISK

                                                                                                                                       in     various              securities          underwriting
     As          full-service             broker      and        dealer        the       Company              is    engaged

                                                   activities           in    which                                                                include           other           broker       dealers
     trading           and      brokerage                                                     counterparties                   primarily

                                                                                        the    event                                     do    not       fulfill         their       obligations         the
     banks        and        other       financial      institutions            In                         counterparties

                                                                 credit      risk The           risk    of     the    default                                on     the creditworthiness                    of
                                    be                                                                                                 depends
     Company may                          exposed         to

     the                              or issuer       of the instruments
           counterparty


                                                                                                               the      credit         standing          of each                counterparty           The
     It   is    the     Companys              policy        to    review           as    necessary
                                                                       risk    associated              with        collateralized                                           and        financings         by
                          also       minimizes            credit                                                                               agreements
     Company



                                                                                                17


                                                                                        basis       and                           additional            collateral          to    be     deposited           or
     monitoring               credit           exposure          on         daily                           requiring

     returned         when          deemed            appropriate


                                                                                                                 on unsecured                assets       to              one     counterparty              did
     As of December                       31 2011             the     Companys               exposure                                                          any

     not exceed               3%     of total assets



15   COMMITMENTS                                    CONTINGENT                       LIABILITIES                          AND GUARANTEES

     Commitments                           The Company has                        certain        contractual              obligations             under        long-term non-cancelable

                                                      with       an     affiliate                                    for     office                      and        facilities          and      includes
     sublease          agreements                                                          principally                                     space

     escalation          provisions


     At December                                                                      had     commitments                          enter      into      future        securities             borrow and
                                    31 2011             the      Company                                                    to

     securities             loan                                  starting          January                 2012            At December 31                       2011            commitments                  in
                                      agreements
                              with securities                 borrowed            totaled          $20 million Commitments                                related          to    securities            loaned
     connection

     also      totaled        $20 million               all      of which         are      with     SG

                               Liabilities                  In   the    normal          course of business                       the     Company may                   be       named from                time
     Contingent
                                     defendant              in    various                     actions            including              arbitrations             class          actions        and      other
     to    time        as                                                         legal

                                           in       connection           with        its   activities           as         broker-dealer                 The        Company may                      also    be
     litigation          arising

                        from time                to   time        in other        reviews           investigations                  and      proceedings formal and                             informal
     involved
                                                                                                                                                            business              Certain of these
     by     governmental                   and        self-regulatory               agencies         regarding              the     Companys
                                                    adverse       judgments settlements                              fines penalties injunctions                            or other          relief        The
     matters         may       result          in

                                                                 and/or        the     amount of damages                          as                            in    each        pending             matter
     Company             contests               liability                                                                               appropriate

                                          information indicates                                                                                   had    been        incurred           at    the date        of
     Where           available                                                        that    it    is    probable               liability


     the       statement            of financial              condition           and       the     Company                can    reasonably             estimate           the       amount of             that

                                                 will    accrue          the      estimated              loss    by          charge          to    income            In     many         proceedings
     loss       the    Company
     however             it    is   inherently              difficult       to determine                 whether           any     loss      is   probable           or     even        possible or to

     estimate the amount of any loss In addition                                                   even     where          loss    is   possible         or an exposure                  to   loss     exists


                       of the                                           accrued            with respect              to                                                          loss    contingency
     in    excess                     liability         already                                                           any previously recognized
                                                                                                                                                                                 of loss
     it   is   not    always possible                   to    reasonably estimate the size of the possible                                           loss      or   range



                                                                                  does not believe                   based        on current            knowledge               and     after
     For legal proceedings                            the    Company
                               with counsel                  that      the resolution              of such proceedings                     will      have           material          adverse          effect
     consultation

     on                                        statement of financial                      condition
           the   Companys


     Guarantees                      In    the      normal          course of business                      the      Company              indemnifies and                    guarantees certain

                              such                               and                                                                              losses       in    connection                with       their
     providers                            as    clearing                    custody          agents         against          potential

     acting      as    an agent                of or providing              services         to     the    Company


     The        Company                   applies        the        provisions              of      the     FASB ASC                    460             Guarantees                which          provides

     accounting                and        disclosure             requirements                for         certain          guarantees              FASB           ASC        460              Guarantees

                                                                                                                            must recognize                                       for the                value
                                upon issuance of                                              the                                                                                               fair
     requires         that                                              guarantee                    guarantor                                                 liability


     of the obligation                    it    assumes          under       that     guarantee             However               the     Company              expects the risk of loss                       to


     be remote



     Certain derivative                        contracts         meet       the     accounting             definition            of       guarantee             including             certain        written

                      and                              forward          contracts            Although            the       Companys                derivative             arrangements                 do not
     options                   contingent

                               identify             whether           the    derivative            counterparty                  retains      the       underlying               asset        liability       or
     specifically

                                                                      has disclosed              information regarding                        all    derivative            contracts           that     could
     equity security                  the       Company
     meet       the    accounting                definition            of    guarantee



                                                                                                    18


16   REGULATORY                      REQUIREMENTS

     As                                                                                                             Uniform Net                              Rule         5c3-     of the
            registered          broker        dealer      the   Company             is   subject       to the                               Capital

     Securities     Exchange               Act       of       1934      Under            the    alternative             method           permitted           by     this       Rule      the


     Companys            required net capital                   as   defined        is    the    greater      of     2%      of aggregate debit                   balances        arising

     from     customer          transactions             or   $1.5 million The                   Company                is   also    subject      to     minimum                financial


     requirements             pursuant        to    CFTC        regulations              In    addition           the    Company            is    expected           to    maintain

     minimum net              capital    level       of $150 million            as        primary dealer                 The Company               is   not permitted to pay

     dividends      or                  subordinated            debt     if   the    ratio      of net capital               to                    debit          items        after   such
                          repay                                                                                                   aggregate

     payments or repayments                      would be        less    than       5%

     At December              31 2011          the   Company            had    net       capital    of   $2256           million which             was $2253                   million    in


     excess    of the net capital requirement                          of $2.6 million



     Pursuant to Rule                5c3-3         of the     SEC      the    Company may                    be    required to deposit                  in        Special        Reserve

     Bank     Account           cash     or    acceptable            equivalents          for    the    exclusive            benefit      of customers               At December

     31 2011        the        Company             had         customer         reserve          requirement                 of $80.6       million At December                          31
     2011     the   Company                had       approximately              $207.3          million           reflected         on    the     statement               of    financial

     condition as Cash segregated for regulatory purposes



17   SUBSEQUENT EVENTS

     The    Company            evaluates           subsequent           events       through           the    date on which                 the    statement              of financial

     condition      is    issued         The        Company            did     not       note     any        subsequent             events       requiring           disclosure           or


     adjustments         to    the   statement of financial                   condition




                                                                                         19


                10 tte                                                                                                                                                      Deloitte         Touche       LIP

                                                                                                                                                                            Two World Financial Center
                                                                                                                                                                            New York NY 10281-1414
                                                                                                                                                                            USA

                                                                                                                                                                            Tel        2124362000
                                                                                                                                                                            Fax          2124365000
                                                                                                                                                                            www.deloitte.com
February        28 2012



SG     Americas         Securities             LLC
1221    Avenue          of the Americas

New York New                  York




In    planning         and       performing              our audit           of the    financial              statements              of    SG      Americas              Securities             LLC         the

Company                 as    of and          for       the
                                                               year ended            December                 31      2011       on          which           we    issued        our       report       dated

                                     and      such                                          an                                                on    those financial                  statements                 in
February         28 2012                                  report          expressed                unqualified             opinion

accordance            with auditing            standards              generally        accepted              in the      United        States        of America                 we    considered             the


                                                          over       financial                               internal            control                as         basis     for      designing              our
Companys               internal         control                                       reporting

                                        for the                           of expressing            an    opinion          on     the        financial         statements             but not for the
auditing        procedures                              purpose
               of expressing               an opinion            on       the effectiveness               of the         Companys                 internal         control        Accordingly                we
purpose
do not express an opinion                          on    the effectiveness              of the          Companys                internal           control



Also      as    required by Rule                        17a-5g1               of the        Securities             and    Exchange                 Commission                SEC we                      have

                                                                                                                                                                                 consideration                  of
made           study        of the        practices            and        procedures          followed              by     the    Company                    including

control        activities          for                                     securities            This        study        included                tests       of    compliance               with         such
                                           safeguarding

practices        and        procedures             that       we     considered          relevant             to    the    objectives               stated         in    Rule        7a-5g              in   the


                                              the                                                   of aggregate                 debits           and     net      capital       under           Rule        7a-
following                    making                     periodic computations

3a11            and     the       reserve required by Rule                           15c3-3e                        making            the    quarterly
                                                                                                                                                                   securities         examinations

counts         verifications             and        comparisons and                   the     recordation                of differences                 required by Rule                    17a-13
                                                                    for                                      for    securities              under       Section             of Federal             Reserve
complying with                the       requirements                        prompt payment
                             of            Board of                 Governors          of        the     Federal           Reserve                                  and               obtaining              and
Regulation                         the                                                                                                            System
                                                                    or control        of     all   fully       paid and           excess           margin           securities         of customers
maintaining            physical possession

as    required by Rule                  15c3-3


In    addition         as    required by Regulation                           1.16    of the Commodity                         Futures            Trading          Commission                CVFC
we     have     made             study of the practices                      and     procedures              followed           by the        Company               including consideration

of control        activities         for                                   customer         and    firm assets This study included                                       tests    of such         practices
                                              safeguarding
and     procedures            that      we     considered                 relevant     to     the       objectives             stated        in    Regulation              1.16       in    making           the


periodic        computations                  of    minimum                financial        requirements                  pursuant            to    Regulation              1.17           Because           the


Company           is    registered            as    an     introducing             broker          with       the    CFTC             and     does        not      execute         any      commodity
                                                                                                                                                        the daily                                       of the
customer         transactions our study did                                not include           tests related            to           making                              computations

segregation            requirements                 of     Section           4da2             of    the       Commodity                    Exchange                Act     and       the     regulations

                       and        the                                 of    funds      based            on     such        computations                      and             making              the     daily
thereunder                                 segregation

computations                of    the      foreign            futures        and     foreign            options           secured            amount            requirements                 pursuant            to


Regulation            30.7 of the          CFFC

                                                                                                                                 and                                internal         control        and      the
The     management of                   the   Company                is    responsible           for establishing                           maintaining

                                               referred          to       in the                                                 In    fulfilling            this responsibility                  estimates
practices       and     procedures                                                 preceding            paragraphs

and                                                                                                          the                       benefits           and      related        costs      of controls
       judgments             by management                     are    required         to    assess                 expected

and     of the practices                and                               referred     to     in    the      preceding           paragraphs                  and    to    assess       whether           those
                                               procedures

practices         and        procedures             can        be     expected         to        achieve           the    SECs              and      the       CFTCs             above-mentioned

objectives             Two         of the      objectives                 of internal        control          and        the    practices           and        procedures             are    to     provide




                                                                                                                                                                             Member         of

                                                                                                                                                                                Deloitte    Touche      Tohmatsu


                                                                                 absolute                                       that    assets           for     which            the     Company              has
                              with        reasonable            but      not                         assurance
management
                                                                              loss    from    unauthorized                      use or disposition                  and      that       transactions             are
responsibility                are    safeguarded               against

                                                                                       authorization                  and        recorded                             to   permit preparation                     of
executed           in   accordance               with managements                                                                                  properly

                                                                         with                                                                                                     Rule     17a-5g              and
financial          statements               in    conformity                         generally            accepted               accounting              principles

Regulation              1.1    6d2             list     additional        objectives             of the          practices             and     procedures              listed       in    the     preceding

paragraphs


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

                                                                                            Also                                 of any evaluation                 of them to future                      periods
error    or   fraud           may        occur     and     not be detected                              projection

                                                                                                                          because        of changes               in       conditions or that                    the
is   subject        to    the        risk      that     they      may become                 inadequate

                          of their design and                                                 deteriorate
effectiveness                                                     operation          may

                                                                                                                                                          of          control           does      not        allow
      deficiency              in     internal          control         exists        when        the       design           or     operation

                                                                        normal                                                         their       assigned functions                     to                      or
management                or       employees              in    the                   course of performing                                                                                      prevent

                                                                                                     basis                      significant          deficiency              is           deficiency              or
detect        and        correct            misstatements                on           timely

combination               of deficiencies                 in internal          control        that      is     less severe than                     material          weakness             yet       important

                    merit attention                   by those charged                with governance
enough        to



                                                                                combination                of deficiencies                    in internal         control           such        that      there      is
     material weakness                      is        deficiency          or

                                                                                                                                                                           statements           will       not    be
     reasonable           possibility             that          material        misstatement                   of the           Companys             financial


prevented               or detected and                 corrected        on          timely basis


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


                                                                                                                                                                and                        activities             for
weaknesses                    We         did     not      identify         any        deficiencies                   in     internal          control                      control


                          securities             that    we     consider to be material                        weaknesses                as    defined          above
safeguarding


                                                                                                                                                            referred          to    in the       second          and
We      understand              that      practices         and       procedures            that    accomplish                   the objectives


third    paragraphs                  of this report             are    considered           by     the       SEC          and     CFTC        to    be    adequate           for their
                                                                                                                                                                                                purposes           in


accordance                with        the      Securities             Exchange          Act        of      1934            the     Commodity                   Exchange             Act         and        related

                                                                                                   that        do not accomplish                         such                             in    all       material
                          and        that      practices         and     procedures                                                                               objectives
regulations
                                                                                for    such                               Based on           this    understanding                  and    on     our study
                indicate                 material        inadequacy                                purposes
respects
                                                                                 and                                  as    described           in the         second        and        third    paragraphs
we      believe         that       the    Companys              practices                   procedures

of this report                were        adequate         at   December 31 2011                          to    meet        the    SECs        and        CFTCs            objectives



This                      is    intended                          for    the     information                   and        use     of    the    Board of Directors                          the        Member
          report                                      solely
                                                                                                                                                                             and
management                     the    SEC         the     CFTC           Financial           Industry            Regulatory              Authority               Inc                    other     regulatory

                                                                                                                                                                                                  1.16       of the
agencies           that       rely    on Rule           17a-5g           under        the    Securities              Exchange Act of 1934                          or      Regulation

CFTC          or    both        in their regulation                    of registered          broker-dealers                      and    futures          commission merchants and                                   is



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




 Yours truly



Document Created: 2012-04-05 14:19:13
Document Modified: 2012-04-05 14:19:13
9999999997-12-003401.paper AUTO-GENERATED PAPER DOCUMENT


ENT> X-17A-5 1 9999999997-12-003401.paper AUTO-GENERATED PAPER DOCUMENT This document was generated as part of a paper submission. Please reference the Document Control Number 12012157 for access to the original document.
Additional Files
FileSequenceDescriptionTypeSize
9999999997-12-003401.txt   Complete submission text file   1257

© 2019 SEC.report
SEC CFR Title 17 of the Code of Federal Regulations.