The KPMG logo is seen at their offices at Canary Wharf financial district in London, Britain, March 3, 2016. REUTERS/Reinhard Krause/File Photo – RC2QXS9RNORR

Register now for FREE unlimited access to Reuters.com

WASHINGTON, April 5 (Reuters) – The Public Company Accounting Oversight Board (PCAOB) on Tuesday said it has sanctioned KPMG LLP’s former vice chair of audit for his role in a high-profile scandal involving leaked information from the accounting industry oversight body.

The PCAOB fined Scott Marcello $100,000, its largest ever penalty against an individual, for failing to reasonably supervise KPMG personnel who engaged in a scheme to illegally obtain and use confidential PCAOB information. The settlement marked the first time the PCAOB has imposed sanctions for “failure reasonably to supervise,” the board said in a statement.

PCAOB Chair Erica Williams said the “first of its kind” disciplinary action was a sign of the board’s commitment to sanctioning top-level personnel at the largest firms.

Register now for FREE unlimited access to Reuters.com

During Marcello’s tenure as KPMG’s vice chair of audit from July 2015 until April 2017, several of his subordinates obtained confidential lists of upcoming audits, which they used to help pass the firm PCAOB inspections. Marcello failed to take appropriate action after learning about the leak in early 2016, the board said.

Marcello could not be reached immediately for comment. KPMG fired Marcello and five employees involved in the scheme in 2017. The Justice Department later charged the five employees.

A spokesperson said the KPMG is a “stronger firm as a result of the actions taken since 2017 to strengthen our culture, our governance and our compliance program”.

KPMG, one of the Big Four accounting firms, paid a $50-million civil penalty in 2019 to the Securities and Exchange Commission to resolve the leak and other misconduct that agency’s enforcement director at the time described as “astonishing” in its breadth and seriousness.

Register now for FREE unlimited access to Reuters.com

Reporting by Chris Prentice and Susan Heavey; Editing by Chris Gallagher, Andrea Ricci and Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.