Violation Of State Accountancy Act RIVERSIDE CPA PAYS $25,000 PENALTY FOR VIOLATING STATE ACCOUNTANCY ACT Hartford – Secretary of the State Susan Bysiewicz’s office announced today that the Connecticut State Board of Accountancy has accepted a settlement agreement with Michael Smeriglio, a certified public accountant (CPA) from Riverside, Connecticut, practicing in Greenwich, which requires Smeriglio to pay a $25,000 civil penalty for allegedly violating the State Accountancy Act. Smeriglio is reported to have received commissions from the sale of financial products. The penalty represents the net income he received from the illegal profits of that activity. Connecticut law bars CPAs from accepting commissions or referral fees, even when done through a business separate from their CPA firm, according to Michael Kozik, attorney for the Connecticut State Board of Accountancy. The Boards case against Smeriglio was initiated when another Connecticut CPA sent the Board a copy of newsletter apparently published by Trusted Securities Advisors, Corp.
Smeriglio was quoted in the newsletter as saying, In addition to generating commission revenues that used to go to brokers, I also make my clients feel much more comfortable with me as their personal financial advisor. Its a win win scenario for all of us. According to Kozik, Smeriglio fully cooperated with the Boards investigation. None of Mr. Smeriglios clients complained to the Board, and he may have even thought that he was acting lawfully by setting up a separate business through which to receive the commissions. He was wrong. He made illegal profits for about two and a half years. This settlement deprives him of all of those profits, Kozik added.
The settlement also provides that Smeriglio will immediately stop accepting commissions for referring the products or services of others and will waive his right to receive future commissions on products already sold. The settlement specifically provides that by agreeing to settle the case, Smeriglio is not admitting he did anything wrong. He retains his Connecticut CPA license. Kozik also noted that, although there is a great deal of discussion in the profession and the business community about changing the law prohibiting CPAs from receiving commissions, in late October the Board voted down a proposal to seek such a change from the legislature. The traditional view in the accounting profession is that accepting commissions would imperil a CPAs objectivity and independence.
The State Board of Accountancy, which was established in 1907 to regulate the practice of public accountancy in Connecticut, has been part of the Office of the Secretary of the State since 1986. Technology.