The Public Company Accounting Oversight Board has fined accounting firm Marcum, a subsidiary and one of its partners a total of $525,000 for touting audit clients at investor conferences it hosted.

According to the PCAOB, 62 issuer audit clients made presentations to investors at Marcum’s annual MicroCap Conference from 2012 to 2015, which the firm promoted as “a unique opportunity for investors to uncover ‘hidden gem’ investment opportunities.”

Partner Alfonse Giugliano, who was responsible for Marcum’s compliance with auditor independence requirements, knew Marcum and senior management “made these types of public statements about the presenting companies, but he failed to consider the potential independence implications of their touting,” the board said.

Marcum, Marcum Bernstein & Pinchuk, and Giugliano agreed to pay civil penalties of $450,000, $50,000 and $25,000, respectively, to settle the PCAOB’s first disciplinary case ever against an accounting firm for publicly advocating audit clients as investment opportunities.

Marcum’s hosting and promotion of the MicroCap Conference “created a mutual interest between Marcum and [audit] clients with respect to whether those clients’ subsequent performance lived up to Marcum’s billing,” the PCAOB said in an administrative order.

In a statement, Marcum said it “recognizes the importance of auditor independence” and “will continue to challenge ourselves to drive continuous improvements in our audit quality, built on a foundation of independence.”

The firm hosted its first MicroCap Conference in New York in June 2012. The conference was “an important marketing event for Marcum” that it used “to increase its visibility in the microcap marketplace and to develop relationships with potential clients,” the PCAOB noted.

In promotional materials, Marcum advertised it as an “invitation-only” event with “the very best” and “promising high growth companies” that were “the top picks by some of the most astute analysts.” Eighteen of the 64 presenting companies at the 2012 conference were audit clients.

Even after the board in April 2015 advised Marcum of potential audit independence violations, the conference website continued to showcase press releases from 2014 and 2015 that touted presenting companies.

Marcum Bernstein, which provides audit services to U.S.-listed Chinese companies, allegedly promoted audit clients at its China Conference.

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