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

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

Published: 2013-03-04 19:17:46
Submitted: 2013-02-26
Period Ending In: 2012-12-31
scanned.pdf Scanned paper document


                                                                                                                                                                        0MB   APPROVAL
         13010362                                                         UNITED                 STATES
                                                                                                                                                              0MB Numbet                    3235-0123

                                           SECURITIES                 AND EXCHANGE COMMIS                                                                     Expires                 April    30 2013

                                                                  Washington D.C 20549                                                                        Estimated    average    burden


                                                                                                                              Mall ProcessIn                  hours___________12.00
                                                         ANNUAL AUDITED REPORTSeoflon
                                                              FORM X17A5     rrn                                                        ri
                                                                                                                                                                          SEC FILE NUMBER

                                                                                     2013
                                                                 PART                                III
                                                                                                                                                                                 8-52490

                                                                             FACING PAGE
                     Information         Required         of Brokers               and Dealers                          PuW                                   17 of the

                                Securities         Exchange               Act   of 1934              and Rule 17a-5ftreunder


REPORT       FOR THE PERIOD BEGiNNiNG                                              01/01/12                                           AND      ENDING                         12/31/12
                                                                                   MMDD/YY                                                                                    MM/DD/YY



                                                           REGISTRANT IDENTIFICATION

NAME      OF BROKER-DEALER                                                                                                                                          OFFICIAL         USE ONLY


 Wells Nelson           Associates         LLC

                                                                                                                                                                          FIRM ID       NO
ADDRESS         OF PRINCIPAL PLACE OF BUSINESS                                  Do     not        use P.O Box                 No

Two    Leadership       Square       211       Robinson              Suite 1600

                                                                                 No     and       Street




 Oklahoma       City                                                                        OK                                                                                73102

                     City                                                                        State                                                                        Zip    Code


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

                                                                                                                                                                  Area    Code       Telephone     No

                                                          ACCOUNTANT                             IDENTIFICATION


iNDEPENDENT            PUBLIC ACCOUNTANT                   whose opinion                    is   contained              in   this   Report


CF       Co     L.L.P

                                                        Name         if   individual    state      last    first   middle      name


8750 North Central Expressway Suite 300                                                 Dallas                                                   TX                                         75231
      Address                                                                           City                                                     State                                      Zip   Code


CHECK ONE
                  Certified   Public     Accountant

                  Public    Accountant

                  Accountant       not resident    in   United States or any of                     its
                                                                                                            possessions


                                                                           FOR OFFICIAL USE ONLY




Claims for exemption        from   the requirement      that the      annual report                be covered                by the opinion      of an independent          public      accountant

must be supported      by   statement    offacts    and circumstances              relied          on as the basis for the exemption                      See section 240.1              7a-5e2


                                           Potential    persons           who   are    to    respond          to    the collection           of information

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

                                             currently valid         0MB        control           number                                                                                    c.-


                                                                               OATH OR AFFIRMATION


       Edward         Wells                                                                                                                                      swear       or        affirm that                to the     best       of

                      and    belief          the                                         financial         statements and                                           schedules pertaining                         to    the   firm of
my knowledge                                           accompanying                                                                       supporting

Wells Nelson                Associates                   LLC                                                                                                                                                                     as     of

December        31                                           2012         are true             and     correct             further       swear           or     affirm          that      neither       the company                nor

                                                                officer        or    director           has any           proprietary              interest        in             account             classified         solely         as
any partner proprietor                  principal                                                                                                                         any
that   of   customer         except             as   follows




                     SEAL                                       Public
                                                  Notary

                                            State       of   Oklahoma
                                                                                                                                                                           resiuen
                                                                          0311
                Commission         01004352                  ExpIres
                                                                                                                                                                                 Title




                                          Notaiy       Public




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

                       Statement           of Income            Loss
                       Statement           of Cash           Flows

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

                       Statement           of Changes            in Liabilities           Subordinated          to   Claims of Creditors

                       Computation               of Net       Capital

                       Computation               for   Determination              of Reserve           Requirements           Pursuant        to    Rule     15c3-3

                       Information              Relating        to the    Possession            or   Control Requirements                Under Rule              5c3-3

                            Reconciliation                   including         appropriate           explanation            of   the    Computation               of Net        Capital        Under       Rule         5c3-1    and         the


                       Computation               for   Determination of                  the   Reserve     Requirements               Under    Exhibit             of Rule      15c3-3

                            Reconciliation               between         the     audited         and    unaudited          Statements         of    Financial           Condition        with    respect         to   methods     of    con
                       solidation

                       An Oath        or Affirmation

                            copy     of    the    SIPC Supplemental                  Report

                            report    describing             any   material         inadequacies           found      to exist    or   found        to   have    existed     since       the   date   of   the    previous      audit


                       Independent               auditors        report    on    internal        control




            For conditions         of     confidential           treatment          of   certain     portions        of   this filing    see       section      240.1    7a-5e3


WELLS   NELSON   ASSOCIATES     LLC



REPORT PURSUANT TO RULE   17a-5d


 YEAR ENDED DECEMBER 31       2012


                                                      WELLS         NELSON             ASSOCIATES   LLC




                                                                            CONTENTS


                                                                                                          PAGE


                                                                                                                -2
INDEPENDENT        AUDITORS      REPORT


STATEMENT     OF FINANCIAL        CONDITION


STATEMENT     OF INCOME


STATEMENT     OF CHANGES          IN   MEMBERS          EQUITY


STATEMENT     OF CHANGES          IN   LIABILITIES

   SUBORDINATED         TO CLAIMS OF GENERAL                      CREDITORS


STATEMENT      OF CASH    FLOWS


                          STATEMENTS                                                                       8-   11
NOTES   TO FINANCIAL


SUPPORTING         SCHEDULES


   Schedule                    Computaon         of    Net    Capital     Under

                               Rule    15c3-1   of    the    Securities


                               and Exchange           Commission                                          13- 14



   Schedule                                      for   Determination         of   Reserve
              II               Computation

                               Requirements          Under Rule           5c3-3   of   the

                                              and Exchange              Commission                              15
                               Securities




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



INDEPENDENT         ACCOUNTANTS             REPORT          ON THE        SIPC ANNUAL

   ASSESSMENT         REQUIRED         BY SEC RULE             17a-5                                      20-22


                                ACCOUNTANTS
                                CONSULTANTS



                                                                                                              Independent                Auditors            Report




 To the Board                     of      Directors       and      Members
 Wells           Nelson                 Associates               LLC




 Report on the Financial                                  Statements


 We        have             audited        the    accompanying                       statement                of    financial         condition          of Wells          Nelson                  Associates                       LLC                 as    of       December                  31

 2012 and                    the       related         statements              of        income              changes           in     members               equity        changes                in      liabilities               subordinated                            to        claims          of

                                             and        cash       flows         for       the                     then        ended          that     are     filed      pursuant                 to         Rule            17a-5              under                 the       Secunties
 general                   creditors                                                                   year

 Exchange                   Act    of      1934        and     the related                notes         to    the     financial          statements



 Managements                              Responsibility                 for the            Financial               Statements


                                                                                                                                                                   of    these                                      statements                                accordance                       with
 Management                        is      responsible            for      the           preparation                and        fair      presentation                                  financial                                                        in



                                                                                                        the        United           States      of    America             this        includes                 the         design                  implementation                              and
 accounting                    principles              generally          accepted                in



 maintenance                      of      internal       control          relevant           to        the     preparation               and     fair       presentation              of     financial                   statements                          that       are          free   from


 material                  misstatement whether                          due        to    fraud        or error




 Auditors                    Responsibility


 Our         responsibility                  is   to    express           an     opinion               on these           financial           statements                based         on         our       audit               We            conducted                         our     audit          in




 accordance                     with                         standards               generally               accepted           in    the      United        States           of    America                    Those             standards                         require             that       we
                                           auditing

              and                            the       audit     to      obtain            reasonable                 assurance               about         whether            the     financial                   statements                       are         free           of     material
 plan                       perform

 misstatement



 An        audit            involves                                                               to        obtain        audit         evidence            about        the        amounts                       and       disclosures                          in     the          financial
                                                performing               procedures

                                  The procedures                   selected                                   on the auditors                                           including           the        assessment                            of the             risks           of    material
 statements                                                                                depend                                               judgment

 misstatement                      of      the    financial           statements                  whether                due     to      fraud       or error            In        making          those               risk        assessments                                 the auditor

                             internal        control         relevant           to        the                                                 and      fair                                  of the                financial                 statements                         in    order          to
 considers                                                                                        entitys            preparation                               presentation

                     audit                                that    are                                    in    the       circumstances                  but not          for       the purpose                      of expressing                            an      opinion               on the
 design                           procedures                               appropriate

 effectiveness                     of     the entitys          internal         control                Accordingly                  we    express           no such opinion                        An          audit also includes                                     evaluating                the


                                           of                                                   used               and     the        reasonableness                     of        significant                     accounting                      estimates                         made          by
 appropriateness                                  accounting               policies

                                                                                the                                                      of   the    financial          statements
 management                        as      well    as evaluating                           overall           presentation



                                                                               we have                                                               and appropriate                                                                                         basis         for       our    audit
 We         believe            that       the audit evidence                                           obtained           is   sufficient                                             to    provide                      reasonable


 opinion




 Opinion

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

                                                                                                                                                                                                      and                   cash flows                                  the year then
 Nelson                     Associates                 LLC     as of       December                    31 2012 and                    the      results        of   its    operations                                 its                                      for


                                                   with accounting                                                                  accepted                the United              States            of     America
 ended             in      accordance                                                    principles           generally                                in




WWW       Cf lip   coiir




 8750          Central       Expressway                   972.387.4300                                                                                                                     CPAmerica               International        in   alliance         with     Crowe     Rorwath       International



 Suite     300                                            800.834.8586                                                                                                  Member             The     International           Accounting           Group

 Dallas      TX 75231-6464                               972.960.2810          fax                                                                                                         World      Services         Group


Other Matter


Our audit was               conducted             for    the                          of forming          an    opinion        on the    financial       statements           as     whole            The      information
                                                                        purpose
contained                  Schedules              and              is                       for                     of   additional      analysis        and     is   not     required         part     of    the    financial
                in                                           II
                                                                         presented                purposes

                      but                                               information                                 Rule     17a-5      under      the   Securities          Exchange          Act     of     1934       Such
statements                      is    supplementary                                          required          by

                                                                                                                                      and                                    the underlying                                  and
information           is   the       responsibility               of    management and               was        derived        from           relates     directly      to                             accounting

other      records          used       to                     the        financial         statements           The       information        in   Schedules            and    Il   has been           subjected         to    the
                                             prepare

              procedures                applied         in    the audit             of the   financial         statements        and     certain     additional         procedures             including        comparing
auditing

and                             such        information                               to    the                                             and    other        records      used    to                       the    financial
        reconciling                                                     directly                  underlying             accounting                                                       prepare

statements                 to   the     financial       statements                  themselves and other                   additional                            in   accordance      with       auditing       standards
                  or                                                                                                                        procedures

                                       in   the United             States       of   America         In    our opinion           the information           in    Schedules          and   II    is             stated    in    all
generally      accepted                                                                                                                                                                              fairly


material                         in    relation     to       the        financial     statements          as        whole
              respects




                                                                                                                          CF     Co      L.L.P


Dallas      Texas

February       22 2013




                                                                                                                                                                                      ACCOUNTANTS
                                                                                                                                                                                      CONSULTANTS


                                                            WELLS NELSON                  ASSOCIATES             LLC

                                                                Statement        of   Financial    Condition

                                                                        December31               2012



                                                                                  ASSETS



Cash     and     cash equivalents                                                                                                            48716

Deposits        with clearing         broker-dealer                                                                                        2060305

Receivable         from clearing           broker-dealer                                                                                    264043

Interest       receivable                                                                                                                     1076

Securities       owned        at   fair   value                                                                                             285860

Furniture        equipment          and     leasehold   improvements       net                                                              202917

Other      assets                                                                                                                            15705


                                                                                                                                           2878622



                                                             LIABILITIES     AND MEMBERS                 EQUITY


Liabilities


  Accounts          payable                                                                                                                  24222

  Accrued expenses                                                                                                                          465019

  Deferred         rent                                                                                                                      33000

  Payable         to   clearing      broker-dealer                                                                                          283319



       Total    liabilities
                                                                                                                                            805560



Members          equity
                                                                                                                                           2073062


                                                                                                                                           2878622




                                          The accompanying      notes   are an        integral   part of these    financial   statements




                                                                                       Page


                                                         WELLS NELSON              ASSOCIATES LLC
                                                                    Statement of Income

                                                         For the   Year Ended       December       31 2012




Revenues

  Commissions                                                                                                                        1945562

 Trading      and    investment      gains
                                                                                                                                     2511720

  Underwriting        and    advisory      fees                                                                                       835854

  Interest                                                                                                                             68829

  Other                                                                                                                               130123



                                                                                                                                     5492088



Expenses

  Employee         compensation           and benefits                                                                               3919375

  Brokerage         and clearance         fees                                                                                        218466

  Communications                                                                                                                       90782

  Occupancy         and     equipment       costs                                                                                     257158

  Promotional        costs                                                                                                            128563

  Interest                                                                                                                             28035

  Data     processing       costs                                                                                                      43519

  Regulatory        fees    and expenses                                                                                               81857
  Errors     and    bad    debt                                                                                                           997

  Other                                                                                                                               128008



                                                                                                                                     4696760


     Net     income                                                                                                                   595328




                                    The                     notes   are   an                     of these   financial   statements
                                           accompanying                        integral   part




                                                                                Page


                                       WELLS       NELSON           ASSOCIATES                   LLC

                                      Statement      of   Changes         in   Members       Equity

                                       For the     Year   Ended     December            31   2012




                                                                                                              Number of        Members
                                                                                                                Units           Equity




Balance   December31    2011                                                                                            1367     1477734


Net   income                                                                                                                       595328


Balance   December   31 2012                                                                                            1367     2073062




                        The accompanying   notes    are   an   integral        part   of these    financial     statements



                                                                Page


                                         WELLS NELSON                     ASSOCIATES          LLC

                                                                  Subordinated       to   Claims    of   General   Creditors
                     Statement of Changes     in   Liabilities


                                         For the      Year Ended          December        31 2012




Balance   December   31 2011


 Additions




  Retirements




Balance   December   31 2012




                         The                   notes     are     an              part of these   financial    statements
                               accompanying                           integral




                                                                       Page


                                                                                   WELLS NELSON                 ASSOCIATES         LLC

                                                                                              Statement of Cash          Flows

                                                                                   For the    Year Ended        December      31 2012




Cash     flows     from operating                          activities


 Net     income                                                                                                                                                 595328

                         to        reconcile             net     income       to    net
 Adjustments

      cash provided                     used            by operating          activities


                                         and amortization                                                                                                        54085
         Depreciation
                                                                                                                                                                    139
         Loss      on disposal                   of assets


         Changes              in
                                   operating               assets       and    liabilities


            Increase               in        deposits      with clearing            broker-dealer                                                               551583

            Decrease                in        receivable         from    clearing          broker-dealer                                                        243856

            Decrease                in        receivable         from    other       broker-dealer                                                              122423

            Increase               in        interest     receivable                                                                                                18
            Decrease                    in    securities         owned                                                                                          960541

            Increase               in        other assets                                                                                                        2663
            Increase               in        accounts       payable
                                                                                                                                                                  2544

            Decrease                    in    accrued       expenses                                                                                            487678
            Decrease                    in    deferred      rent                                                                                                 9000
            Decrease                    in    payable       to   clearing          broker-dealer                                                                953679


         Net      cash provided                     used          by operating            activities                                                            25705


Cash     flows from investing                              activities



  Purchase          of   furniture                 equipment            and    leasehold          improvements                                                  36488


         Net      cash provided                     used          by investing            activities                                                            36488


Net    decrease          in    cash and                 cash equivalents                                                                                        62193

                  cash and                    cash equivalents                                                                                                  110909
Beginning



Ending     cash and                cash equivalents                                                                                                              48716



Supplemental                  Disclosures

  Cash      paid for

       Interest                                                                                                                                                  28035


       Income taxes                                                                                                                                               1391




                                                  The                                 notes      are   an              part of these   financial   statements
                                                           accompanying                                     integral




                                                                                                             Page


                                                                     WELLS NELSON                                 ASSOCIATES                       LLC

                                                                              Notes            to    Financial            Statements

                                                                                             December               31 2012




                                                      Accounting              Policies
Note   Summary         of     Significant




       Basis of Financial                      Statement Presentation

                                                                                                                                                                                  of Wells          Nelson           Associates
       The     financial           statements                                the    financial             position         and        results         of   operations
                                                           present
                                                                                                                                             which         was        formed on           February               2000            Three
       LLC     the     Company                        an    Oklahoma                limited          liability          company
                                                                                                                                                                                              own     the                        of    the
       individuals           who          are      members             of     management                       and/or          employees               of       the    Company                                 majority

                                                                                                                                                                                                    terminated            Profit       and
                               interests               The      Company                 shall       terminate            on      February          28 2050              unless         eariier
       membership
                                                                                                                                                                                                                    ownership              of
                                               and     distributions               are         made         to     members              in     accordance                 with    their       percentage
       loss    are     allocated
                                                                                                                                                                                         the                        the board              of
                                               The    number           of    membership                   units         authorized            must be            approved          by            majority      of
       outstanding            units
                                                                                                                                                                                 The                                             makes
       members                Each             members           liability
                                                                                   is    limfted          to      its
                                                                                                                         capital       account             balance                       Company              generally


       distributions          to    its   members           around           March            of   each        year



       Business            Operations

       The Company                  is         broker-dealer            in   securities             registered            wfth    the    Securities              and Exchange              Commission               SEC              under

                                                                                                                                                                                                       customers              would        be
                                                which                         that       all   the funds            and       securities           belonging           to   the   Companys
       Rule      15c3-3k2ii                                 provides
                                                                                                                                                                        rule the        Company          executes              all    of   its
       handled                                     broker-dealer                   In    accordance                with the provisions                     of   this
                     by            clearing

                                                                                                                                             an      unaffiliated                             broker-dealer              located            in

       customers              transactions                 on          fully-disclosed                    basis           through                                           clearing

                                                                                                      and                                     the                                 customers                                   business
        Dallas       Texas               which        carries          the    accounts                            securities           of              Companys                                         Principal


                                                                                                                                                                                              and     advisory       services              for
                                                                              and                         transactions                and         providing           underwriting
        activities      are conducting                     principal                     agency

        customers            primarily           located        in   Oklahoma


                                     and       Advisory              Fees
        Underwriting

                                                                                                                          and                                                                                   from      securities
                                   and                       fees include                gains         losses                     fees net of syndicate                          expenses           arising
        Underwriting                          advisory
                                                                                                      underwriter                or                    Underwriting               and     advisory          fees     also       include
                        in    which            the    Company                acts        as    an                                     agent
        offerings

                                                                                                                                                           and                         fees    are recorded              at   the time
                 eamed         from                             financial           advisory           services                 Underwriting                          advisory
        fees                                   providing

                                                                     and the income                    is      reasonably             determinable
        the underwriting                  is   completed



        Securities            Transactions


                             loss                     from                                     transactions                entered            into    for       the    account         and     risk    of the       Company                are
        Profit    and                    arising                 all    securities

                                                                                                        method                and     are         recorded             on         trade       date     basis             Customers
                                                the                      identification
        determined             using                   specific

                                                                                                                                      basis        with         related      commission               income        and       expense
        securities         transactions                are      reported                on          settlement             date

                                                                                                                        recorded                  commission                income       and     expense         for     customers
                        on           settlement            date        basis            The        amounts                              for
        reported
                                                                                                                          would be recorded                      on         trade date         basis
        securities         transactions               approximate                 the        amounts             that




        Cash and Cash                         Equivalents


                                                                                    cash                                                           has      defined          cash                              as    highly           liquid
        For      purposes                of    the    statement              of                     flows         the      Company                                                      equivalents

                                                                                                                                        not held           for    sale      in   the ordinary         course        of   business
        investments                 with       original     maturities of less than                            ninety         days




                                                                                                               Page


                                                                                           WELLS NELSON                                    ASSOCIATES                     LLC

                                                                                                      Notes         to    Financial            Statements

                                                                                                               December                    31 2012




                                                                                                  Policies               continued
Note         Summary                 of     Significant                  Accounting



                                                                        and        Leasehold                Improvements
             Furniture                Equipment

                                                                                                                                                    are          stated          at     cost          less        accumulated                depreciation
             Furniture                    equipment                      and          leasehold                improvements
                                                                                                                                                                               methods                        estimated            useful        lives     of       five
                                                                                                            accelerated                    and      straight-line                                   using
             Depreciation                      is        provided             principally             by
                                                                                                                                                                                                of     the      economic             useful        life    of       the
                                                                                                                           are        amortized             over          the     lesser
                    seven                                      Leasehold                  improvements
             to                      years
                                               or the term                    of   the     lease
             improvement


             Income             Taxes

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

             the     responsibility                       of    the     individual          members


                                                                                                                                                                                     should         one     arise         would       be    included            as
                                                interest               and                        associated                 with             tax     contingency
             Any           potential                                               penalty

                                                                                                                                     which         the   assessment                    anses         The Companys income tax                               returns
                                          of    income tax expense                               in   the period               in
             component
                                                                                           the   statutes            of    limitations             generally             three years from the date                         of filing
             are subject                  to    examination                    over




              Use          of   Estimates

                                                                                                                                                                                                                                             in     the United
                                                                                      statements                     conformity                with accounting                       principles        generally            accepted
              The          preparation
                                                           of    financial                                     in


                                                                                                                                                                                                       and        assumptions              that        affect            the
                                                                                                                                                                   make          estimates
              States            of    America                        U.S GAAP                         requires             the        Company               to

                                                                                                                                                                                                        and                          at    the    date         of        the
                                                                                       and                               and        disclosure            of      contingent             assets                    liabilities

              reported               amounts                     of    assets                    liabilities



                                                                                                      could         differ      from         those       estimates
              financial           statements                           Actual         results




        2-                           with       and            Receivable              from      Clearing            Broker-Dealer
 Note         Deposits


                                                                                                                                                                                                                                      broker-dealer                      for
                                                                                                           include             cash                              to      be    maintained              at    the clearing
                                      with           clearing                broker-dealer                                                   required
              Deposits
                                                                                            Receivable                   from                        broker-dealer                is    comprised            of    commissions              trading            profits
              clearing            and           trading               activities                                                    clearing

                                                                                                                          collected           between             five    and     thirty-five         days        after    month end
              and other items                              Such amounts are normally



 Note   3-    Receivable                   from            Other         Broker-Dealer



                                                                                                           include                                    fees from                securities           offerings       in    which      the    Company                  acts
              Receivable                    from           other broker-dealers                                            underwriting

                                                                                                                                                   within                     days     after    month end
              as     an underwriter                              Such         amounts            are normally                collected                           thirty




 Note         Securities                  Owned


                                                                                                                                                                                                                           and     consist        of    state            and
              Securities                  owned                 at    fair    value        as    of    December                 31 2012              are considered                     trading       securities


                                                                                                                                                                                                            financial        instruments            recorded               at
                  municipal           obligations                        In    accordance              with         U.S        GAAP            the    Company                  categorizes            its



                                                                                                                                                                                                                                     to                                    in

                       value          into                three-level              fair    value       hierarchy                    The     fair    value         hierarchy            gives the highest                  priority         quoted         prices
              fair

                                                                                                                                                                                                     unobservable                           Level                   If   the
                                                         for identical             assets or           liabilities         Level                 and the lowest                 priority       to                                inputs
                  active        markets
                                                                                                                                                                                                                         the categorization               is    based
                                                                                                      instruments                          within     different           levels       of the hierarchy
                                used           to    measure the                     financial                                      fall
                  inputs

                                                                              that                              to       the   fair        value     measurement                  of    the instrument
                  on the lowest                     level        input                is   significant




                                                                                                                                     Page


                                                                     WELLS NELSON                                ASSOCIATES                      LLC

                                                                                  Notes      to    Financial           Statements

                                                                                           December31                       2012




Note    Securities        Owned            continued



                                                                                                                            of    Financial        Condition             are categorized                 based         on the       inputs
        Financial        assets       and       liabilities         recorded           on the Statement

        to   the   valuation        techniques                as follows



                                                                                                                                              identical        assets or             liabilities      that    the    Company              has
                         Valuations             based on                                          in    active      markets           for
        Level                                                       quoted         prices


        the    ability   to   access


                                                                                         whose           value        are     based on quoted                       prices      in     markets         that    are not           active        or
        Level            Financial          assets            and    liabilities


                                                                                                                              for substantially                the    full   term       of    the asset or           liability
        model                  that       are observable               either          direcfly        or   indirectiy
                    inputs




                                                                                                                                                                    valuation                                 that                   inputs
                                                                                       whose           values         are     based on                         or                       techniques                     require
        Level            Financial          assets and              liabilities                                                                  prices


                                                                                            to    the       overall    fair      value        measurement                    These           inputs    reflect       managements
        that    are both        unobservable                  and     significant

                                                                            market                               would           use     in    pricing    the asset or                liability
                         about       the assumptions                                        participant
        judgment


                                                                                                                                                              based on quotations                      received            from dealers
         State and                                                    consist           of debt         securities          that      are valued
                          municipal             obligations

                                                                                                                                               services             These          pricing         services        generally         utilize

        who make              markets           in   such       securities             or by       independent                pricing

                                                                                                                                                                                          maturity       and        type as        well        as
                                    which       considers                         or    price      of    bonds         of     comparable              quality         coupon
         matrix      pricing                                         yield


         dealer supplied             prices



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




         recurring       basis       as    of   December31 2012


                                                                                                                                                                              Securities              Owned

                                                                                                                                                   Level                                  Level                              Level



                                                                                                                                                                                             285860
                State and           municipal         obligations




                                                                                                                                                                                     $285860                                               --




         The Company did                    not      hold any        financial           liabilities         measured            at   fair    value      at    December              31 2012



 Note    Furniture            Equipment              and      Leasehold             Improvements



                                                                             and        leasehold                                         at    December31 2012                          is   as follows
                               of   furniture         equipment                                              improvements
              summary


                 Furniture          and    fixtures                                                                                                                                           265718
                                                                                                                                                                                              169212
                 Equipment
                 Leasehold
                                                                                                                                                                                              103040
                                     improvements

                                                                                                                                                                                              537970

                              accumulated                                          and       amortization                                                                                 335053
                 Less                                   depreciation



                                                                                                                                                                                              202.917




                                                                                                             Page      10


                                                                                  WELLS NELSON                                  ASSOCIATES                         LLC

                                                                                          Notes           to    Financial               Statements

                                                                                                       December                  31 2012




Note   Leases



                                                                                                                     are leased               under          various           operating             leases          with     initial    noncancelable
       The     Companys                        facilities         and        certain      equipment
                                                                              Rental                                                                       and     equipment             amounted                    to   $169371          during        2012
       terms        in   excess               of     one      year                        expense               related          to     facilities




       One                     lease contains                       an                   to    renew           for   an     additional               sixty       months
                facility                                                     option




                                                                                                                                           have       to     be     made        in     each          of      the years         indicated          based        on
       The                               are the            minimum               lease       payments                that       will
               following


       operating           leases               in    effect      as     of    December               31 2012


                                Year               Ending

                                December                      31
                                               2013                                                                                                                                                           152849

                                               2014                                                                                                                                                           149576

                                               2015                                                                                                                                                           109428

                                               2016                                                                                                                                                                57750


                                               Total         minimum               lease                                                                                                                      469.603
                                                                                               payments



Note   Net Capital               Requirements                           and       Exemptive               Provisions



                                                                                                                                                                                                                                 the maintenance                of
       The         Company                is
                                                   subject        to    the       SEC     Uniform              Net     Capital             Rule      SEC Rule              15c3-1               which          requires

                                                                                                the                                                  indebtedness                 to    net capita                   both      as defined          shall       not
       minimum                net        capital           and     requires            that               raflo       of    aggregate

       exceed            15    to              At     December31 2012                               the    Company had                       netcapital             of    $1838288                      which        was $1738288                  in   excess

                                                                                                The Companys                                    of aggregate                   indebtedness                   to    net                 ratio    was     .28    to
       of    its   required              net         capital       of    $100000                                                        ratio                                                                               capital




       The Company                        is
                                                   exempt from the                    Securities            and Exchange                      Commission                  Customer                Protection              Rules       SEC        Rule      5c3-


              which           relate          to     reserves            and custody                of securities under                       section            k2ii           of     this     rule




Note    Defined            Contribution                     Plan



                                                                                                                                                                                                                   effective                             2003
       The         Company                     adopted                   401k            profit       sharing              plan         covering           all
                                                                                                                                                                   eligible       employees                                       January

                                                                                                                                the        annual          maximum amount                           allowed            by the         Internal     Revenue
        Participants                may make                      deferral         contributions                 up        to


                                                                                                                                                                    and                 harbor                                   contributions                The
        Code             The             Company                 may          also       make         discretionary                   contributions                            safe                          matching

                               incurred                                               fees     and made matching                             contributions                of   $13505             and $80000                   respectively
        Company                                       administrative




Note    Commitments                       and             Contingent              Liabilities




                                                                              various                          and brokerage                    activities                which        counterparties                                    include        broker-
        The Company                        is      engaged              in
                                                                                              trading
                                                                                                                                                                    in                                                    primarily


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

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




        The                                                                                         its                         broker/dealer               if      customer            fails           to   settle          securities         transaction
                   Company                    is     required           to    indemnify                   clearing

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

        material           indemnification                        loss       at   December                31 2012




                                                                                                                                      11
                                                                                                                      Page


    Supplemental         Information




  Pursuant   to   Rule     7a-5   of   the




Securities   Exchange       Act of     1934



                  as of




         December31 2012


                                                                                   Schedule



                                                                   WELLS NELSON            ASSOCIATES       LLC

                                                    Net    Capital    Under Rule   5c3-1    of the   Secuties   and   Exchange     Commission
                        Computation            of


                                                                           As of December31          2012




Computation             of     Net   Capital




Total     members                                    for   net   capital
                                                                                                                                                2073062
                             equity    qualified




Deductions         and/or        charges

  Non-allowable                assets

        Furniture       equipment            and    leasehold      improvements                                             202917

        Other     assets                                                                                                         15705          218622


Net     capital    before        haircuts     on    secuties       positions                                                                    1854440



                on secuties                                where applicable
Haircuts                               computed
   pursuant        to   Rule         5c3-1

           Debt secuties                                                                                                         16152            16152


Net     capital
                                                                                                                                                1838288




Aggregate          Indebtedness



Items      included       in    statement      of   financial     condition


   Accounts                                                                                                                                       24222
                    payable

   Accrued                                                                                                                                       465019
                  expenses
   Deferred        rent                                                                                                                           33000


                               indebtedness                                                                                                      522241
Total     aggregate




                                                                                     Page     13


                                                                                         Schedule           continued


                                                                            WELLS NELSON                    ASSOCIATES        LLC

                         Computation                of   Net    Capital         Under Rule          5c3-1     of the Securities    and   Exchange    Commission

                                                                                         As   of   December      31 2012




Computation              of    Basic Net Capital                  Requirement



Minimum         net    capital           required         2/3%        of    total


  aggregate            indebtedness                                                                                                                                    34816




Minimum         dollar        net   capital      requirement               of


                  broker        or dealer                                                                                                                            100000
  reporting




Minimum         net                      requirement           greater          of two
                       capital

  minimum          requirement                amounts                                                                                                                100000




Net   capital     in   excess            of   minimum          required                                                                                            1738288




Excess net        capital           at   1000%                                                                                                                      1786064




Ratio                           indebtedness              to    net                                                                                               .28to1
          Aggregate                                                   capital




Reconciliation                with       Companys              Computation



There were no material                        differences        in   the computation              of net   capital   under Rule    15c3-1   from   the


 Companys computation




                                                                                                      Page     14


                                                                         Schedule           II




                                                       WELLS       NELSON            ASSOCIATES          LLC

                                    Computation         for   Determination       of   Reserve      Requirements    Under

                                           Rule   5c3-3       of the Securities        and Exchange      Commission

                                                                  As of December31               2012




Exemptive    Provisions




The Company       has   claimed    an   exemption      from     Rule   5c3-3    under Section           k2ii   in   which   all   customer   transactions   are

cleared through    another      broker-dealer     on      fully   disclosed    basis




Companys    clearing     firm      First   Southwest      Company




                                                                              Page     15


 Independent     Auditors      Report



      On    Internal   Control




 Required    By SEC     Rule     17a-5




Year Ended     December        31 2012


                               ACCOUNTANTS
                               CONSULTANTS


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




  To the Board                     of    Directors           and Members

  Wells          Nelson                 Associates              LLC



  In   planning               and         performing                our audit             of the           financial        statements                 of Wells         Nelson              Associates                          LLC           the             Company                       as        of

  and       for       the year            ended          December                  31 2012                   in   accordance                with auditing               standards            generally                    accepted                   in        the United              States

  of   America                 we        considered                the      Companys                      internal      control            over     financial           reporting          internal                 control              as               basis          for     designing

  our      auditing            procedures                    for     the         purpose             of    expressing                our opinion            on     the     financial          statements                           but not                    for     the purpose                     of


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

  the effectiveness                        of the       Companys                    internal               control




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

                         and                                   followed                               Company                                     consideration               of   control           activities                   for                                           securities
  practices                         procedures                                      by the                                  including                                                                                                    safeguarding

  This study included                          tests         of     such          practices               and     procedures               that    we      considered              relevant            to       the objectives                            stated           in    Rule           17a-

                                                                                                                                                                                                                                                                                     and
  5g         in
                      making             the      periodic            computations                         of     aggregate                indebtedness                 and     net        capital              under             Rule            17a-3a1                                            for



  determining                  compliance                    with     the         exemptive provisions                                of   Rule          5c3-3           Because             the       Company                      does                 not carry               securities


  accounts               for       customers or perform                              custodial                  functions            relating      to     customer            securities              we            did     not review                         the practices                    and

  procedures                  followed            by the           Company                    in
                                                                                                    any of the following


                                                                             secunties                 examinations                     counts            verifications             and           comparisons                            and              the         recordation                    of
                                   Making              quarterly

                                   differences               required             by     Rule         17a-13


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

                                   Regulation                   of   the         Board of Governors                         of the Federal                  Reserve           System



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

                                                             the preceding                                                                        this                                 estimates                     and judgments by management
  procedures                  referred            to    in
                                                                                                    paragraph              In
                                                                                                                                 fulfilling                responsibility


  are required                 to       assess the expected                              benefits           and      related          costs of controls                   and of the practices                              and         procedures                       referred               to    in



  the preceding                         paragraph               and         to    assess whether                        those          practices           and     procedures                can          be         expected                  to         achieve               the    SECs
  above-mentioned                           objectives                   Two             of the           objectives            of     internal          control        and     the    practices                     and          procedures                          are       to    provide

                                    with       reasonable                    but         not         absolute           assurance               that       assets         for      which           the          Company                       has                                                are
  management                                                                                                                                                                                                                                                   responsibility


                                                       loss     from             unauthorized                     use   or disposition                    and      that       transactions                   are          executed                       in        accordance                   with
  safeguarded                      against

                                         authorization                and          recorded                                                         the                               of     financial                    statements                          in
                                                                                                                                                                                                                                                                    conformity                  with
  managements                                                                                               properly            to    permit                preparation

                                                                                                          Rule                                                                              of the practices                            and                                          listed           in
  generally              accepted              accounting                   principles                              17a-5g             lists    additional          objectives                                                                       procedures

  the preceding                     paragraph



  Because                of    inherent            limitations               in    internal               control       and          the practices           and        procedures                 referred                to      above                  error          or fraud               may
                 and       not          be detected                                                         of             evaluation             of     them      to   future      periods                         subject             to    the             risk     that      they           may
  occur                                                              Also          projection                     any                                                                                      is



  become                                           because                  of                                    conditions               or     that      the     effectiveness                   of        their            design                and              operation                 may
                         inadequate                                                changes                  in



  deteriorate




wwwcfll           coni




  8750           Central   Expressway                        972.387.4300                                                                                                                   CRAmerica                                    in   alliance         with    Crowe
                                                                                                                                                                                                                    International                                                Norwath        International


  Suite    300                                               800.834.8586                                                                                                 Member            The     International           Accounting          Group

  Dallas    TX 75231-6464                                    972.960.2810          fax                                                                                                      World      Services           Group


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



the normal             course            of performing                 their      assigned             funcons             to   prevent       or detect              misstatements                     on         timely basis




     significant            deficiency               is
                                                             deficiency               or         combination              of deficiencies                in    internal          control         that       is   less    severe          than       material

weakness            yet important                         enough       to    merit         attention         by those                             with
                                                                                                                                charged                      governance


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

                   that                 material            misstatement                    of    the     Companys               financial              statements                         not     be                                or    detected            and
possibility                                                                                                                                                                       will
                                                                                                                                                                                                             prevented
corrected          on             timely basis



Our consideration                        of   internal          control          was       for    the    limited                          described                   the                 and     second                                    and     was        not
                                                                                                                          purpose                               in               first
                                                                                                                                                                                                                    paragraphs

designed          to        identify          all     deficiencies               in   internal         control        that      might      be       material              weaknesses                and          therefore           there       can      be    no
assurance           that          all       material         weaknesses                    have        been     identified             We         did    not     identify           any deficiencies                     in    internal         control        and
control     activities                for    safeguarding               securities            that      we     consider         to    be material weaknesses                                as defined              above



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


report     are considered                       by        the   SEC         to    be adequate                for    its
                                                                                                                           purposes          in    accordance                    with the Securities
                                                                                                                                                                                                                         Exchange           Act     of     1934
and     related         regulations                   and       that     practices               and    procedures              that    do    not accomplish                        such objectives                     in    all   material       respects
indicate           material                  inadequacy                for       such      purposes                 Based        on    this       understanding                     and     on         our                    we     believe        that       the
                                                                                                                                                                                                                 study
Companys                                       and         procedures as described                                  the      second                                  of                           were adequate                           December
                       practices                                                                               in
                                                                                                                                           paragraph                      this      report                                          at                         31
2012       to   meet the                SECs          objectives



This                                                                                                      and                             Board of Directors                             Members management
        report         is    intended               solely       for    the       information                       use      of the                                                                                                        the    SEC          the

Financial         Industry                                                                 and       other                                                                         on     Rule                               under        the
                                            Regulatory             Authority                                    regulatory             agencies               that        rely                          17a-5g                                   Securities


Exchange           Act           of   1934      in    their                             of registered               brokers      and      dealers              and        is   not intended             to       be and        should       not be         used
                                                                 regulation

      anyone other than
by                                            these         specified            parties




                                                                                                                                     CF       Co             L.L.P

Dallas      Texas

February        22 2013




                                                                                                                                                                                                                   ACCOUNTANTS
                                                                                                                                                                                                                   CONSULTANTS


Independent     Accountants        Report   on



   The   SIPC   Annual   Assessment



    Required    By   SEC   Rule    17a-5




  Year Ended     December         31 2012


                             ACCOUNTANTS
                             CONSULTANTS

                                                           INDEPENDENT                        ACCOUNTANTS                     REPORT ON THE                             SIPC          ANNUAL
                                                                                   ASSESSMENT                 REQUIRED               BY SEC RULE                       17a-5




  To the Board                   of    Directors        and          Members
  Wells          Nelson               Associates              LLC



        accordance                                                                    under                                                        Act          of    1934           we              have                                     the
  In                                  with     Rule       17a-5e4                                the    Securities           Exchange                                                                            performed                                 procedures

  enumerated                    below         with     respect             to      the   accompanying                Schedule             of    Assessment                   and            Payments                      Form SIPC-7                                  to     the

                                                                                                                               ended            December                31 2012                                      were agreed                                          Wells
  Securities              Investor            Protection             Corporation           SIPC         for    the year                                                                               which                                                to    by

  Nelson                 Associates              LLC       and        the Secunties              and    Exchange             Commission                    Financial           Industry                  Regulatory                        Authority                 Inc    and

  SIPC           solely         to    assist     you and              the other          specified       parties       in
                                                                                                                            evaluating             Wells             Nelson                Associates                          LLCs          compliance                     with


  the      applicable                 instructions              of    the        Form      SIPC-7             Management                   is   responsible               for          Wells              Nelson                           Associates                     LLCs

                             with        those                                           This    agreed-upon                procedures               engagement                      was              conducted                       in     accordance                     with
  compliance                                           requirements

  attestation              standards             established                    by   the   American            Institute       of        Certified         Public        Accountants                                 The             sufficiency                 of       these


  procedures                is       solely    the     responsibility                 of those     parties          specified        in    this    report              Consequently                             we make no                         representation

                         the                           of the procedures                   described           below        either        for   the                      for       which               this      report               has been                  requested
  regarding                      sufficiency                                                                                                              purpose

  or   for   any         other        purpose


  The       procedures                 we     performed              and        our findings      are as follows




                                               the                   assessment                                      Form SIPC-7                  with      respective                 cash             disbursements                          records                entries
                        Compared                      listed                               payments            in




                        cash          disbursements                  journal         noting     no differences


                                               the    amounts                              on    the audited               Form      X-17A-5              for    the year             ended                December                        31 2012                   with    the
                        Compared                                            reported

                        amounts           reported         in    Form SIPC-7               for   the year        ended        December                31 2012            noting              no differences


                                                                                                        Form         SIPC-7         with        supporting              schedules                      and       working                    papers              noting         no
                        Compared               any adjustments                       reported     in



                        differences             and


                        Proved          the    arithmetical                                of the       calculations           reflected             in    Form SIPC-7                         and         in    the           related             schedules                and
                                                                           accuracy

                        working         papers         supporting               the adjustments              noting no differences




  We       were not engaged                      to and              did    not conduct          an examination the objective                                   of   which         would              be the expression                              of     an opinion

  on compliance                         Accordingly                  we do         not express         such an         opinion             Had     we       performed                  additional                 procedures other matters

                 have come               to    our    attention            that      would have         been     reported           to    you
  might



  This                     is    intended                        for       the information             and    use     of    the specified             parties          listed         above               and        is        not intended                     to    be    and
             report                                  solely


  should          not be          used by anyone other than                              these    specified          parties




                                                                                                                               CF           Co        L.L.P


  Dallas          Texas

  February               22 2013




www.cfl     Ip   corn




  8750       Central      Expressway                   972.387.4300                                                                                                          CPAmerica               International        in   alliance     with   Crown        Horwath     International



  Suite    300                                         800.834.8586                                                                                        Member            The     International          Accounting            Group

  Dallas    TX 75231-6464                              972.960.2810          fax                                                                                             World      Services         Group


                                                                   bUUIJ lS INVb                                         OR PROtECTION                                 CORPORATION
                                                                                        P.O Box                92185                                 D.C 20090-2185
        sIPc-7                                                                                                               Washington                                                                                                                   SIPC7
                                                                                                                             202-371-8300

       33-REV         7/10                                                                   General Assessment                                  Reconciliation
                                                                                                                                                                                                                                                     33-REV           7/10

                                                                                                          For    the   fiscal      year   ended     12/31/2012

                                                                   Read      carefully       the    Instructions         in
                                                                                                                              your     Working      Copy    before        completing              this    Form

                                                              TO       BE FILED             BY ALL              SIPC         MEMBERS              WITH          FISCAL YEAR                        ENDINGS
         Name     of       Member address                           Designated             Examining             Authority            1934    Act   registration              no     and         month          In    which        fiscal                 ends        for
                                                                                                                                                                                                                                               year
      purposes        of    the        audit       requirement              of    SEC      Rule      17a-5

                                                                                                                                                                                 Note       If
                                                                                                                                                                                                   any     of the           information             shown on      the

                             052490                FINRA            DEC                                                                                                                           label                          correction                       e-mail
                                                                                                                                                                                 mailing                       requires                               please
                            WELLS                 NELSON            ASSOCIATES               LLC               1717                                                                       corrections                to                               and    so
                                                                                                                                                                                 any                                        form@sipc.org
                            iWO              LEADERSHIP SQ                                                                                                                       indicate          on     the        form     filed

                            211              ROBINSON  AVE STE S1600
                            OKLAHOMA                     CITY      OK   71O2-7175                                                                                                Name       and          telephone              number         of
                                                                                                                                                                                                                                                    person       to

                                                                                                                                                                                 contact                                    this   form
                                                                                                                                                                                                  respecting




               General            Assessment                  item 2e from page                                                                                                                                        12885

               Less payment                    made       with      SIPC-6         filed    exclude interest                                                                                                                6846
                       July                  26          2012
                                  Date            Paid

              Less         prior        overpayment                 applied


              Assessment                     balance          due      or   overpayment                                                                                                                                   6039

              Interest        computed                   on     late    payment            see      instruction                 for              days      at    20% per annum


              Total        assessment                    balance        and       Interest       due      or overpayment                  carried       forward
                                                                                                                                                                                                                          6039

              PAID         WITH          THIS        FORM
              Check         enclosed                payable            to   SIPC
              Total        must          be       same        as        above


              Overpayment                     carried         forward



       Subsidiaries                      and        predecessors                      Included            in    this   form        give      name    and        1934      Act     registration                 number




The     SIPC member                     submitting              this    form and           the

person     by whom                it    is    executed             represent         thereby                                          Wells         Nelson                      Associates                                LLC
that    all   information                contained              herein       is   true       correct
                                                                                                                                                                Name     ol Corporation          Parinerihip         or other   organization
and     complete


                                                                                                                                                                                      Authorized         Signature



Dated the_21                                 of          FebrUSty                          2O-                                        President                   Partner
                              day
                                                                                                                                                                                                   Title

This form         and       the         assessment                  payment           is    due      60        days    after       the end       of the         fiscal                    Retain          the         Working          Copy          of   this    form
                                                                                                                                                                         year
for      period        of not            less       than            years the              latest          years        In    an      easily accessible                place




        Dates          ____________
                        Postmarked                                      Received                                 Reviewed


       Calculations           _________                                                                          Documentation               _________                                                                          Forward         Copy
LLI


       Exceptions


ci     Disposition           of        exceptions


                                                                                                                             AND             GENERAL                             ASSESSMENT
                                                                                                                                                                                                                                                   Amounts       for   the    fiscal   period

                                                                                                                                                                                                                                                   beginning       1/112012

                                                                                                                                                                                                                                                   and    ending    12/3112012


                                                                                                                                                                                                                                                               Eliminate         cents

     Item   No
                                                                                             hA                        Code
                                                                                                                                                                                                                                                         5492089
     2a   Total    revenue                FOCUS              Line       l2iPart                     Line                           4030


     2b   Additions

                       Total         revenues                from       the    securities                    business           of    subsidiaries                  except         foreign          subsidiaries             and

                        predecessors                     not       included             above


                       Net        loss from             principal             transactions                     in   securities              in   trading           accounts



                       Net        loss from              principal            transactions                     in   commodities                  in    trading          accounts



                       interest                and    dividend                                    deducted              in    determining                   item     2a
                                                                            expense


                       Net        loss from                                             of    or participation                       In    the    underwriting                  or distribution             of    securities                         _________________________
                                                         management


                                                 other        than                                                                                         fees     and     legal       fees    deducted            in    determining        net
                       Expenses                                          advertising                     printing            registration

                                                                                  of                                          in                                   or distribution             of   securities                                       _______________________
                        profitfrom                   management                         or        participation                     underwriting



                       Net        loss from             securities             in      investment                   accounts


                                     Total           additions




 2c       Deductions
                                                                       distribution                      shares                                                           end     investment                               or unit
                       Revenues                  from        the                                   of                    of          registered              open                                     company
                                                                  from       the       sale        of        variable         annuities               from        the     business        of    insurance                from   investment
                        investment                   trust

                                                services           rendered             to                               Investment               companies                 or    insurance           company             separate
                        advisory                                                                  registered

                                                 and     from          transactions                                            futures
                                                                                                                                                                                                                                                           11.4082
                       accounts                                                                         In    security                           products


                       Revenues                  from        commodity                 transactions




                       Commissions                       floor         brokerage              and            clearance             paid     to    other           SIPC         members         in   connection             with
                                                                                                                                                                                                                                                           196065
                       securities                transactions



                       Reimbursements                          for                           in    connection                 with                    solicitation
                                                                        postage                                                           proxy



                       Net     gain            from    securities              In      investment                   accounts



                       100%                commissions                      and                               earned         from         transactions               in          certificates         of     deposit        and
                                     of                                                markups
                       ii     Treasury                bills        bankers             acceptances                     or commercial                       paper        that     mature        nine    months            or less

                       from        issuance              date


                       Direct                                of                                                     and                    fees       incurred            in    connection           with        other     revenue
                                     expenses                      printing            advertising                            legal

                       related            to    the    securities              business                  revenue              defined            by    Section            169L            of   the    Act


                       Other       revenue               not       related          either          directly           or     indirectly              to    the     securities          business

                   See            instruction




                                                              excess           of      $100000                                  documentation
                            Deductions                  In                                                      require




                             Total        interest           and        dividend              expense               FOCUS                 Line    22/PART               hA       line    13
                              Code
                             of    total
                                           4075         plus

                                                 interest
                                                                   line


                                                                   and
                                                                             2b4
                                                                             dividend
                                                                                             above
                                                                                                    Income
                                                                                                                but     not     in    excess
                                                                                                                                                                                   03
                       ii    40%          of
                                                margin            interest          earned              on      customers                 securities

                             accounts                 40%         of    FOCUS            tine                 Code       3960                                               $_____________________________



                             Enter         the                         of    line             or        ii
                                                                                                                                                                                                                                                            28035
                                                      greater



                             Total        deductions                                                                                                                                                                                                      338181

                                                  Revenues
                                                                                                                                                                                                                                                         5153908
2d    SiPC       Net    Operating



2e    General          Assessment                        .0025                                                                                                                                                                                                 12885
                                                                                                                                                                                                                                                     to   page         line   2.A


NELSON    ASSOCIATES   LLC


  December 31 2012



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