COMMITMENTS AND CONTINGENCIES Leases The Company leases office space in various states expiring at various dates through December 2029, and as of June 30, 2019 , is committed under operating leases for future minimum lease payments as shown in the table below. In October 2018, the Company entered into an agreement to lease equipment under a capital lease for 24 months . The equipment under the lease is collateral for the lease obligation and is included within fixed assets in the condensed consolidated statements of financial condition. The leased equipment is amortized on a straight line basis over 7 years . The interest rate related to the lease obligation is 5.6 percent and the maturity date is September 2020. The capital lease obligation is included within other liabilities in the condensed consolidated statements of financial condition. Fiscal Year Ending September 30, Operating Leases Capital Lease Three months ending September 30, 2019 $ 781,000 $ 61,000 2020 3,065,000 297,000 2021 2,685,000  2022 1,871,000  2023 1,700,000  Thereafter 4,257,000  Total minimum lease payments $ 14,359,000 $ 358,000 Less: Amounts representing interest not yet incurred 15,000 Present value of capital lease obligations $ 343,000 The total amount of rent payable under the leases is recognized on a straight line basis over the term of the leases. Rental expense under all operating leases, excluding sublease income, for the three months ended June 30, 2019 and 2018 was $953,000 and $1,029,000 , respectively. Rental expense under all operating leases, excluding sublease income, for the nine months ended June 30, 2019 and 2018 was $2,857,000 and $3,121,000 , respectively. Sublease income under all operating subleases for the three months ended June 30, 2019 and 2018 was approximately $0 and $314,000 , respectively. Sublease income under all operating subleases for the nine months ended June 30, 2019 and 2018 was approximately $51,000 and $404,000 , respectively. As of June 30, 2019 , the Company and its subsidiaries had one outstanding letter of credit, which has been issued in the maximum amount of $1,159,000 as security for a property lease, and which is collateralized by the restricted cash as reflected in the condensed consolidated statements of financial condition. Litigation and Regulatory Matters The Company and its subsidiaries are defendants or respondents in various pending and threatened arbitrations, administrative proceedings and lawsuits seeking compensatory damages. Several cases have no stated alleged damages. Claim amounts are infrequently indicative of the actual amounts the Company will be liable for, if any. Further, the Company has a history of collecting amounts awarded in these types of matters from its registered representatives that are still affiliated, as well as from those that are no longer affiliated. Many of these claimants also seek, in addition to compensatory damages, punitive or treble damages, and all seek interest, costs and fees. These matters arise in the normal course of business. The Company intends to vigorously defend itself in these actions, and the ultimate outcome of these matters cannot be determined at this time. On July 3, 2019, a lawsuit was filed against National Securities Corporation, National Asset Management, Inc., the Company, the Companys current board members and certain former board members, certain officers of the Company, John Does 110, and the Company as a nominal defendant, in the United States District Court for the Southern District of New York, captioned Kay Johnson v. National Securities Corporation, et al. , Case No. 1:19-cv-06197-LTS. The complaint presents three purported derivative causes of action on behalf of the Company, and five causes of action by the plaintiff directly. As part of the derivative claims, the complaint generally alleges that certain of the individual defendants failed to establish and maintain adequate internal controls to ensure that the Board acted in accordance with its fiduciary duties to prevent and uncover alleged legal and regulatory misconduct and wrongdoing on the part of a National officer. As part of its claims brought directly by the plaintiff, the complaint generally alleges that certain individual and corporate defendants wrongfully terminated the employment of the plaintiff in violation of the Dodd-Frank Act and applicable common law, or conspired to do so. The complaint further alleges that certain corporate defendants violated the Equal Pay Act with regards to the plaintiffs compensation. The complaint seeks monetary damages in favor of the Company, an order directing the Companys board members to take actions to enhance the Companys governance, compensatory and punitive damages in favor of the plaintiff, and attorneys fees and costs. The Company has notified its insurer of the lawsuit and believes it has valid defenses to the asserted claims of the complaint. Liabilities for potential losses from complaints, legal actions, government investigations and proceedings are established where management believes that it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. In making these decisions, management bases its judgments on its knowledge of the situations, consultations with legal counsel and its historical experience in resolving similar matters. In many lawsuits, arbitrations and regulatory proceedings, it is not possible to determine whether a liability has been incurred or to estimate the amount of that liability until the matter is close to resolution. However, accruals are reviewed regularly and are adjusted to reflect the Companys estimates of the impact of developments, rulings, advice of counsel and any other information pertinent to a particular matter. Because of the inherent difficulty in predicting the ultimate outcome of legal and regulatory actions, management cannot predict with certainty the eventual loss or range of loss related to such matters. At June 30, 2019 and September 30, 2018 , the Company accrued approximately $1,777,000 and $825,000 , respectively. These amounts are included in accounts payable and accrued expenses in the condensed consolidated statements of financial condition. Amounts charged to operations for settlements and potential losses during the three months ended June 30, 2019 and 2018 were $715,000 and $(85,000) , respectively, and during the nine months ended June 30, 2019 and 2018 , were $3,198,000 and $576,000 , respectively. These amounts are included in other administrative expenses in the condensed consolidated statements of operations. The Company has included in professional fees litigation and arbitration related expenses of $401,000 and $364,000 for the three months ended June 30, 2019 and 2018 , respectively, and $1,329,000 and $706,000 for the nine months ended June 30, 2019 and 2018 , respectively.