Related Party Transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

Related Party Transactions

D. Related Party Transactions

At December 31, 2020 and 2019, the Company had an investment of $4,724,290 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 Consolidated Statements of Financial Condition.  Income earned from this investment totaled $64,504 and $175,846 in 2020 and 2019, respectively, and is included in dividends and interest revenues in the Consolidated Statements of Operations.

In 2020 and 2019, the Company earned $2,582,914 and $4,875,768 or approximately, 64% and 76%, 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.  GAMCO Asset and Gabelli Funds each paid $752,550 and $750,000, respectively, to the Company pursuant to research services agreements (see Note C) for the year ended December 31, 2019. Effective February 1, 2019, the Company amended its existing research services agreements, whereby GAMCO Asset and Gabelli Funds shall each pay $62,500 per month for research services provided. These agreements were terminated on 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 $334,825 and $729,893 during 2020 and 2019, respectively.  In connection with the clearance of the GGN transactions the Company collects and pays GGN and has a payable to GGN for $511,108 as of December 31, 2019 included in payables to affiliates in the Consolidated Statement of Financial Condition. Sales manager fees are separately disclosed in the Consolidated Statements of Operations.

The Company participated in the secondary offerings of the preferred stock of affiliated closed end funds during 2020 and 2019 as participants in the underwriting syndicate and selling groups earning $16,000 and $431,114, respectively.

The Company made a cash return of capital to AC on June 19, 2019, in the amount of $3,300,000.  AC made two capital contributions pursuant to the merger between G.research and Morgan Group on October 28, 2019 and November 21, 2019, of $300,000 and $110,889, respectively.  See Note I.

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 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 currently expires on April 1, 2020, which is subject to annual renewal. 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).  Pursuant to the sublease, AC and the Company shall pay a monthly fixed lease amount for the twelve-month contractual period.  For the years ended December 31, 2020 and 2019, the Company paid $269,448 and $321,975, respectively, under the sublease agreement.  These amounts are included within occupancy and equipment expenses on the Consolidated Statements of Operations.