RELATED PARTY TRANSACTIONS |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | RELATED PARTY TRANSACTIONS During the three months ended June 30, 2022 and 2021, the Company earned commission income from related parties in the amounts of $101,609 and $65,775, respectively. Fee and commission income generated from FFIN Brokerage accounted for approximately 100% of the Company's total related party commission income for the three months ended June 30, 2022, as compared to approximately 99% of the Company's total related party commission income for the three months ended June 30, 2021. Commission income earned from related parties is comprised primarily of brokerage commissions and commissions for money transfers by brokerage clients.
During the three months ended June 30, 2022 and 2021, the Company paid commission expense to related parties in the amount of $173 and $5,282, respectively. Commission expense paid to FFIN Brokerage accounted for approximately 0% of the Company's total related party commission expense for the three months ended June 30, 2022, as compared to approximately 73% of the Company's total related party commission expense for three months ended June 30, 2021.
During the three months ended June 30, 2022 and 2021, the Company recorded stock-based compensation expense for restricted stock grants to related parties in the amount of $381 and $180, respectively.
As of June 30, 2022, and March 31, 2022, the Company had cash and cash equivalents held in brokerage accounts of related parties totaling $22,437 and $22,787, respectively. 100% of these balances were due to Wisdompoint Capital LTD, as of June 30, 2022, and March 31, 2022, respectively.
As of June 30, 2022, and March 31, 2022, the Company had bank commission receivables and receivables from brokerage clients from related parties totaling $244 and $190, respectively. Brokerage and other receivables from related parties result principally from commissions receivable on the brokerage operations of related parties.
As of June 30, 2022, and March 31, 2022, the Company had margin lending receivables with related parties totaling $173,972 and $107,649, respectively. 98% and 95% of these balances were due from FFIN Brokerage.
As of June 30, 2022, and March 31, 2022, the Company had margin lending payables to related parties, totaling $34,813 and $38,889, respectively. 100% of these balances were due to Wisdompoint Capital LTD, as of June 30, 2022, and March 31, 2022, respectively.
As of June 30, 2022, and March 31, 2022, the Company had accounts payable due to a related party totaling $257 and $313, respectively.
As of June 30, 2022, and March 31, 2022, the Company had amounts due to Timur Turlov related to the acquisition of the two insurance companies, Freedom Life and Freedom Insurance, totaling $24,966 and $0, respectively.
As of June 30, 2022, and March 31, 2022, the Company had loans received from related party totaling $1,856 and $0, respectively.
As of June 30, 2022, and March 31, 2022, the Company had financial liability with related parties totaling $0 and $1,637, respectively.
As of June 30, 2022, and March 31, 2022, the Company had customer liabilities to related parties totaling $213,227 and $400,273, respectively. As of June 30, 2022, and March 31, 2022, 67% and 61%, respectively, of these balances were deposits from FFIN Brokerage.
As of June 30, 2022, and March 31, 2022, the Company had restricted customer cash deposited in current and brokerage accounts with related parties in the amounts of $227,435 and $222,651. As of June 30, 2022, and March 31, 2022, 85% and 78%, respectively, of these balances were from FFIN Brokerage.
During the three months ended June 30, 2022, the Company purchased loans in the aggregate amount of $56,681 and sold back loans totaling $9,832 to FFIN Credit.
In July 2021 the Company sold 23.88% of the outstanding equity interest of Freedom UA to Askar Tashtitov, the Company’s president, for $415 to comply with certain foreign ownership restrictions relating to registered Ukrainian broker-dealers. For additional information regarding this transaction, see Note 1 Description of Business to the condensed consolidated financial statements.
FFIN Brokerage is owned personally by Timur Turlov and is not part of the FRHC group of companies. FFIN Brokerage has its own brokerage customers, which include individuals and market-maker institutions and conducts business with the Company through a client omnibus account at Freedom EU.
Wisdompoint Capital LTD is a party related to Freedom EU through common management. Wisdompoint Capital LTD provides brokerage services to the Company.
Brokerage and related banking services, including margin lending, were provided to related parties pursuant to standard client account agreements and at standard market rates.
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