Securities and Exchange Commission charged Trump Media & Technology Group’s independent accounting firm, BF Borgers with widespread fraud on Friday (May 3). While the SEC accused the Lakewood, Colorado-based auditor of operating a “sham audit mill,” it did not make allegations of wrongdoing against Truth Social owner Trump Media.
What are the accusations against BF Borgers?
“The Securities and Exchange Commission today charged audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers (together, “Respondents”), with deliberate and systemic failures to comply with Public Company Accounting Oversight Board (PCAOB) standards in its audits and reviews incorporated in more than 1,500 SEC filings from January 2021 through June 2023,” SEC said in a press release.
“The SEC also charged the Respondents with falsely representing to their clients that the firm’s work would comply with PCAOB standards; fabricating audit documentation to make it appear that the firm’s work did comply with PCAOB standards; and falsely stating in audit reports included in more than 500 public company SEC filings that the firm’s audits complied with PCAOB standards” the SEC statement added.
The SEC levied a harsh penalty on BF Borgers, permanently barring the firm from operating as accountants. The company and its owner, Benjamin Borgers, also agreed to pay a combined $14 million in fines.
“Borgers and his sham audit mill have been permanently shut down,” Gurbir Grewal, director of the SEC’s enforcement division, said in a press release.
Companies that have employed BF Borgers will need to look for new accounting firms. SEC alerted those companies in a separate statement issued on Friday. Trump Media has announced that it is also looking for a new accounting firm.
Trump Media’s stock price falls
Shortly after trading began on Friday, Trump Media, the company that controls the Truth Social app, saw its stock price fall 9 percent.
Borgers worked as Trump Media’s independent registered accounting firm before the social media company went public in March. Later in March, Trump Media’s audit committee authorised Borgers’ appointment as the public company’s accounting firm.