Trump Media Auditing Firm Charged for Fraud By SEC

Donald Trump (Credits: David Walter Banks for The Washington Post)

Trump Media’s auditing firm, BF Borgers CPA, and its owner, Benjamin Borgers, faced severe charges of “massive fraud” from the Securities and Exchange Commission (SEC) on Friday, as revealed by the federal regulator.

Both BF Borgers CPA and Benjamin Borgers have consented to a permanent suspension from practicing as accountants before the SEC. They also agreed to a combined payment of $14 million in civil penalties, without accepting or denying the accusations, according to the SEC.

Describing BF Borgers as a “sham audit mill,” the SEC accused the company and its owner of deliberately failing to conduct audits and quarterly reviews according to Public Company Accounting Oversight Board (PCAOB) standards. This failure affected more than 1,500 SEC filings between January 2021 and June 2023.

The SEC alleged that BF Borgers deceived clients by falsely claiming their work complied with PCAOB standards, fabricated audit documents to support this claim, and inaccurately stated in audit reports included in over 500 public company SEC filings that their audits met these standards.

SEC Building

During the period covered by the SEC complaint, BF Borgers served as the auditor for Trump Media, which was privately held at the time and was moving towards a merger with Digital World Acquisition Corp., a publicly traded shell company.

The merger between Trump Media and DWAC was finalized in late March 2024, resulting in Trump Media becoming publicly traded under the DJT ticker symbol. Despite the SEC charges, three days after the company went public, Trump Media’s board approved retaining BF Borgers as their auditors for 2024.

Gurbir Grewal, director of the SEC’s enforcement division, criticized Borgers and his firm, stating that they were responsible for one of the most significant failures by gatekeepers in financial markets.

Grewal emphasized that their fraudulent conduct not only jeopardized investors and markets but also undermined trust in the markets.

Truth Social (Credits: rafapress/Shutterstock)

The SEC’s actions have raised concerns about the accuracy of financial information in thousands of reports issued by companies audited by Borgers, including Trump Media. These reports, regularly filed with the SEC, play a crucial role in helping investors and analysts evaluate publicly traded companies.

The SEC clarified that reports filed by companies audited by BF Borgers might not necessarily need to be amended solely because of the SEC’s order.

However, issuers should evaluate whether their filings need amending to address any reporting deficiencies arising from BF Borgers’ engagement. Additionally, companies previously audited by Borgers now need to find a new qualified public accountant.

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.