Massachusetts seeks to deny registration to adviser

Massachusetts has filed a complaint against a midsize adviser for allegedly misstating assets under management.
The state is seeking to deny registration to CCR Wealth Management LLC of Westborough, Mass.
When CCR applied for Massachusetts registration in June, the state began a “detailed review” of its prior regulatory filings with the Securities and Exchange Commission, Massachusetts regulators said in a complaint released Tuesday.
State examiners found “an illogical and inconsistent pattern in reporting assets under management,” the state said in a release.
For several years, CCR showed assets under management of “precisely $25 million” despite changes in the number of clients, said Brian McNiff , a spokesman for the Massachusetts Securities Division.
When the division sought details on the firm’s assets for 2007 through 2012, CCR replied that it had included brokerage accounts in its total assets under management for its advisory business, the state claims.
Broker-dealer assets don’t count as advisory assets, Massachusetts said.
The firm’s most recent ADV form, filed in July, reports just $7 million under management.
“They were just trying to stay away from us, and at the SEC,” Mr. McNiff said.
Phone calls to CCR were not returned Tuesday.
Industry observers expect that there could be more actions against midsize advisers, especially as states begin to regularly audit the estimated 2,800 firms that have switched to state oversight.
“We’re looking at the information that comes in on these new registrants. So far, this is only one we’ve taken action on,” Mr. McNiff said.
Massachusetts has 196 midsize advisory firms that were either identified by the SEC as needing to switch or are firms that have registered with the state on their own, Mr. McNiff added.