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Trump Media’s accounting firm accused of massive fraud affecting more than 1,500 SEC filings




Trump Media's accounting firm accused of massive fraud affecting more than 1,500 SEC filings

(Bloomberg) — The Securities and Exchange Commission accused the auditor of Donald Trump’s social media company of massive fraud affecting more than 1,500 regulatory filings.

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BF Borgers CPA PC and its founder, Benjamin Borgers, will be permanently suspended from practicing and acting as accountants for the SEC, and will pay a total of $14 million in fines to settle the investigation, the SEC said in a press release from Friday.

“Ben Borgers and his accounting firm, BF Borgers, were responsible for one of the biggest failures of gatekeepers in our financial markets,” Gurbir Grewal, the SEC’s chief enforcement officer, said in a statement. “Because investors rely on the audited financial statements of publicly traded companies to make their investment decisions, the accountants and accounting firms that audit these statements play a critical role in our financial markets. Borgers and his firm have completely abandoned that role, but thanks to the meticulous work of the SEC staff, Borgers and his sham audit factory have been permanently closed.”

BF Borgers did not immediately respond to a request for comment on Friday morning. The company is one of the most productive accountants in the US. The most recent review of audits by US regulators showed a 100% deficit. In its order, the SEC described false audit work papers, “non-existent work” and fabricated meetings.

The SEC did not immediately respond to a request for comment on BF Borgers’ work for Trump Media & Technology Group Corp. Trump Media “looks forward to working with new audit partners in accordance with today’s SEC order,” a company representative said. .

Read more: Trump Media’s accounting firm has a history of audit deficiencies

The regulator’s settlement with BF Borgers did not state whether Trump Media was one of the companies whose reports related to alleged fraud by the accounting firm.

Trump Media has used the Colorado-based accounting firm since 2022 and retained its services after it went public by merging with Digital World Acquisitions Corp., a special purpose acquisition company. Inspections by the Public Company Accounting Oversight Board have not yet covered the audits of Trump Media’s BF Borgers.

The former president’s social media company was the largest customer in BF Borgers’ customer base in terms of market capitalization. Although the company is one of the busiest in the US, more than 80% of its clients trade over-the-counter, meaning they are too small to meet the listing requirements of major exchanges, according to research firm Ideagen Audit Analytics.

According to the firm, BF Borgers was among the top 10 accounting firms with the most listed clients in 2023.

The accountant has faced regulatory scrutiny in both Canada and the US. It scored poor marks in the U.S. audit regulator’s last two annual inspections, with the PCAOB citing a 100% deficiency rate in the sample of audits it inspected for 2021 and 2022.

The audit watchdog said BF Borgers, which has hundreds of clients, more than doubled its customer base between 2019 and 2021 but did not add more staff to cope with the extra workload. Only one person was responsible for 147 audits, the regulator says in an extensive inspection report.

(Updates with additional background information starting in the third paragraph.)

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