Related Party Transactions

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

Related Party Transactions

3. Related Party Transactions

At June 30, 2020 and December 31, 2019, the Company had an investment of $4,938,005 and $6,579,577, respectively, in The Gabelli U.S. Treasury Money Market Fund advised by Gabelli Funds, LLC, which is an affiliate of the Company. The amount is recorded in cash and cash equivalents in the Condensed Consolidated Statements of Financial Condition. Income earned from this investment totaled $5,909 and $53,464 for the three months ended June 30, 2020 and 2019, respectively, and $35,459 and $112,499 for the six months ended June 30, 2020 and 2019, respectively, and is included in dividends and interest in the Condensed Consolidated Statements of Operations.

For the three months ended June 30, 2020 and 2019, the Company earned $789,875 and $1,154,633 or approximately 72% and 77%, respectively, of its commission revenue from transactions executed on behalf of funds advised by Gabelli Funds, LLC. (“Gabelli Funds”) and private wealth management clients advised by GAMCO Asset Management Inc., (“GAMCO Asset”), each affiliates of the Company. For the six months ended June 30, 2020 and 2019, the Company earned $1,481,659 and $2,287,478 or approximately 69% and 75%, respectively, of its commission revenue from transactions executed on behalf of funds advised by Gabelli Funds and private wealth management clients advised by GAMCO Asset. For the three months and six months ended June 30, 2019, GAMCO Asset and Gabelli Funds paid a total of $375,000 and $752,500, respectively, to the Company pursuant to research services agreements (see Note 2). No amounts for such services were paid during the three months and six months ended June 30, 2020. These agreements were terminated effective January 1, 2020.

The Company participated as agent in the secondary offerings of the GAMCO Global Gold, Natural Resources & Income Trust (“GGN”). Pursuant to sales agreements between the parties, the Company earned sales manager fees related to this offering of $0 and $122,571 during the three months ended June 30, 2020 and 2019, respectively, and $334,825 and $122,571 during the six months ended June 30, 2020 and 2019, respectively. Sales manager fees are separately disclosed in the Condensed Consolidated Statements of Operations.

The Company participated in the secondary offerings of the preferred stock of affiliated closed end funds in December 2019. The final settlements were received during March 2020 resulting in underwriting fees of $0 and $30,488 for the three months and six months ended June 30, 2020, respectively.

The Company pays AC a management fee equal to 20% of the Company’s year-to-date pretax profits before consideration of this fee. In the three months and six months ended June 30, 2020 and 2019, the Company did not pay a management fee to AC as there were no pretax profits.

AC has a sublease agreement with GBL that expired on April 1, 2020 and continues on a month to month basis. AC allocates this expense to the Company based on the percentage of square footage occupied by the Company’s employees (including pro rata allocation of common space). For the three months ended June 30, 2020 and 2019, the Company paid $26,211 and $82,843, respectively, under the sublease agreement. For the six months ended June 30, 2020 and 2019, the Company paid $53,324 and $165,756, respectively, under the sublease agreement. These amounts are included within occupancy and equipment expenses on the Condensed Consolidated Statements of Operations.