The Securities and Exchange Commission (SEC) announced on Friday that the auditing firm for Trump Media, BF Borgers CPA, and its owner Benjamin Borgers have been charged with “massive fraud.” This fraudulent activity impacted over 1,500 SEC filings, leading to serious consequences for both the auditing firm and its owner.
As a result of the charges, BF Borgers and Benjamin Borgers have agreed to be permanently suspended from practicing as accountants before the SEC. Additionally, they have agreed to pay a combined $14 million in civil penalties. Despite these actions, they have not admitted to or denied the allegations brought against them by the SEC.
The SEC referred to BF Borgers as a “sham audit mill,” accusing the company and its owner of engaging in deliberate and systemic failures to comply with Public Company Accounting Oversight Board (PCAOB) standards. These failures were evident in audits and reviews incorporated in more than 1,500 SEC filings from January 2021 through June 2023.
During the same period, BF Borgers worked as the auditor for Trump Media as it was privately held and in the process of merging with the publicly traded shell company Digital World Acquisition Corp. The SEC alleged that BF Borgers falsely assured clients that their work would comply with PCAOB standards, fabricated audit documents to create the appearance of compliance, and falsely stated in audit reports included in over 500 public company SEC filings that the audits met PCAOB standards.
The SEC emphasized the magnitude of the fraudulent conduct, describing it as one of the largest wholesale failures by gatekeepers in financial markets. This misconduct not only risked harming investors and markets by incorporating noncompliant audits into SEC filings but also eroded trust and confidence in the financial markets.
The SEC’s actions have raised concerns about the accuracy of financial information in reports issued by the companies audited by BF Borgers, including Trump Media. Trump Media, which owns the Truth Social app and has former President Donald Trump as its majority shareholder, saw its share price drop by 9% following the news of the SEC charges.
The SEC’s charges against the auditing firm for Trump Media and its owner highlight the importance of upholding integrity and compliance in financial reporting. The repercussions of such fraudulent activities have far-reaching implications for investors, markets, and the credibility of financial information disclosed to the public. It serves as a reminder of the critical role that auditors play in maintaining transparency and trust in the financial system.
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